Severance agreements help employers and employees close an employment relationship clearly and professionally. When a separation involves severance pay, benefits continuation, or settlement terms, a written severance agreement prevents confusion and reduces disputes by documenting exactly what each side receives and what obligations continue after the employee leaves.
Without a written severance agreement, disputes often arise around final pay timing, unused PTO, severance payment schedule, healthcare continuation, confidentiality, non-disparagement, return of property, and what claims are being released. That’s why free severance agreement templates in Word are valuable: they provide structured, editable documents to define separation terms consistently and reduce exit-related risk.
This guide includes 38+ free severance agreement templates suitable for layoffs, restructures, mutual separations, termination without cause, executive exits, and settlement-based departures.
What Is a Severance Agreement?
A severance agreement is a contract between an employer and employee that outlines the terms of employment separation. In many cases, the employer provides severance compensation or benefits in exchange for certain promises—often including a release of claims (depending on local law).
A standard severance agreement typically includes:
✅ Parties and separation date
✅ Severance pay amount and payment method (lump sum or installments)
✅ Tax withholding language (basic)
✅ Benefits continuation terms (if offered)
✅ Unused PTO and final pay handling
✅ Release of claims / waiver language (basic)
✅ Confidentiality and non-disparagement (if applicable)
✅ Return of company property and access revocation
✅ Reference letter / employment verification terms (optional)
✅ Rehire eligibility (optional)
✅ Dispute resolution and governing law
✅ Signature blocks and consideration period (where required)
Severance agreements should align with local labor law and company policy.
Why Use Free Severance Agreement Templates?
Templates help HR teams produce consistent separation agreements quickly and reduce errors.
✅ Clear severance pay and benefits terms
✅ Reduced misunderstandings during exit and final pay
✅ Standardized confidentiality and property return language
✅ Better documentation for audits and compliance
✅ Faster review and approvals for large layoffs or restructures
✅ Professional, consistent employer process
Templates are especially useful for repeat separations during organizational changes.
38+ Free Severance Agreement Templates (Word)
Below is a curated collection of severance agreement templates, grouped by separation type and clause focus.
Core Severance Agreement Templates (1–14)
✅ Standard Severance Agreement Template
✅ Simple Severance Agreement (Basic)
✅ One-Page Severance Agreement Template
✅ Severance Agreement (Editable Word)
✅ Severance Agreement Cover Page Template
✅ Severance Agreement Review Checklist (HR)
✅ Separation Agreement + Severance Package Template
✅ Mutual Separation Agreement Template (Basic)
✅ Termination Without Cause Severance Agreement Template
✅ Layoff Severance Agreement Template
✅ Severance Agreement with Lump-Sum Payment Clause
✅ Severance Agreement with Installment Payment Schedule Attachment
✅ Severance Agreement Amendment Template
✅ Severance Agreement Acceptance Confirmation Letter Template
Pay, Benefits, and Exit Logistics Templates (15–26)
✅ Severance Pay Calculation Worksheet (Internal)
✅ Final Pay and Unused PTO Settlement Addendum
✅ Benefits Continuation Addendum (Basic)
✅ COBRA-Style Benefits Notice Addendum (Basic)
✅ Outplacement Support Addendum (Optional)
✅ Company Property Return Agreement Template
✅ Access Revocation and Confidential Data Checklist (Internal)
✅ Non-Disparagement Clause Addendum (Basic)
✅ Confidentiality Reminder Agreement Template
✅ Reference Letter Terms Addendum (Optional)
✅ Rehire Eligibility Statement Addendum (Optional)
✅ Exit Checklist Template (HR + IT + Manager)
Special Role and Risk-Focused Templates (27–38+)
✅ Executive Severance Agreement Template (Basic)
✅ Manager Separation Agreement Template (Basic)
✅ Fixed-Term Contract Early Termination Severance Addendum
✅ Settlement Agreement Template (Employment Dispute – Basic)
✅ Release of Claims Addendum (Basic)
✅ Non-Solicitation Addendum (Where Appropriate)
✅ Non-Compete Addendum (Where Appropriate)
✅ IP and Invention Assignment Reminder Addendum
✅ Confidential Information Return/Destruction Certification
✅ Dispute Resolution / Arbitration Addendum
✅ Severance Agreement for Company Restructure (Basic)
✅ Group Layoff Severance Agreement Template (Basic)
✅ Complete Severance Agreement Templates Pack (All-in-One)
Why Use Word Format for Severance Agreements?
Severance agreements often require customization—payment schedules, benefits, and clauses vary by role and situation.
Word format advantages include:
✅ Easy editing for severance amounts, dates, and schedules
✅ Track Changes for legal/HR review
✅ Flexible attachments (payment schedules, exit checklists, property return)
✅ Print-ready signing and professional formatting
✅ Easy PDF export for execution and secure archiving
Word supports standardized agreements with controlled customization.
Best Practices for Severance Agreements
To create stronger severance agreements:
✅ Define the separation date and final working day clearly
✅ Document severance pay amount and how/when it’s paid
✅ Clarify tax withholding and reporting (basic)
✅ State how unused PTO and final pay are handled
✅ Include benefits continuation terms only if offered and permitted
✅ Use clear return-of-property requirements and deadlines
✅ Address confidentiality and non-disparagement carefully
✅ Provide a clear timeline for signing and payment processing
✅ Align terms with local laws and company policies
Severance agreements should be clear, calm, and specific.
Common Mistakes to Avoid
Avoid these severance agreement issues:
✅ Unclear severance amount or payment schedule
✅ Not addressing PTO, commissions, or bonuses (when relevant)
✅ Overly broad clauses that conflict with local law
✅ Missing return-of-property deadlines and access revocation steps
✅ Not documenting what happens if the employee breaches terms
✅ Forgetting signature dates or required notices/periods
✅ Inconsistent language across employees in group layoffs
Most disputes come from unclear pay timing and missing benefit details.
Frequently Asked Questions
Are severance agreements required by law?
Not always. Many are voluntary unless required by contract, policy, or local regulation. When severance is offered, agreements are commonly used to document terms.
Do severance agreements include a release of claims?
Often, yes—depending on local law and the situation. Release language should be reviewed for compliance.
Can severance be paid in installments?
Yes. Many agreements include installment schedules and conditions for continued payment.
Why use Word templates for severance agreements?
Word templates are easy to customize, review, and store consistently, then export to PDF for signing.
Should severance agreements include confidentiality and non-disparagement?
Sometimes, yes. These clauses should be used carefully and aligned with local law and company policy.
Conclusion
Severance agreements help both employers and employees close a separation professionally with clear terms for severance pay, benefits, final pay, and post-employment obligations. The 38+ free severance agreement templates in Word in this guide provide editable formats to document separation terms, reduce disputes, and standardize HR exits.
With the right template, organizations can manage separations consistently, protect sensitive information, and reduce risk—while providing employees with clear, respectful documentation.
