It really depends on the maturity of the workforce and leadership, as I mention. For a lot of startups, that’s in short supply and just saying today is the last day of work is easiest. It shouldn’t have the feeling tossing them out. It can be end of day, folks (not boss) can arrange a meet up at a bar nearby, etc. I’ve seen it go sideways on both sides before when it’s too ambiguous for people or drawn way out, especially for junior folks in IC roles. The right thing really is just let them go, pay them as much as you can, and let them start figuring out what’s next.
If it were me, chances are I would not make the day of notification their last day unless they wanted it to be (most would I bet) but I also know what I’m doing. :-)