P45/P60

What are P45 and P60 forms?

P45 and P60 forms are two of the most important documents used in UK payroll. A P45 form is issued when an employee leaves a job and shows how much they have earned and paid in tax during that tax year. A P60 form is an end-of-year tax summary given to employees who are still employed on 5 April.  

Both forms help keep PAYE records accurate and up to date.

What is a P45 form?

A P45 form is an employee leaving form that employers must provide when someone leaves their job. It records the employee's earnings and tax paid through PAYE from the start of the tax year up to their leaving date.  

When an employee starts a new role, their new employer uses the P45 to apply the correct tax code and update HMRC records. Without a P45, employees may be placed on an emergency tax code and pay the wrong amount of tax until their details are corrected.

What information does a P45 include?

A P45 form typically includes:

• Employee details  

• Employer details  

• Tax code  

• National Insurance number  

• Total pay to date  

• Tax paid to date  

• Leaving date  

• Employer PAYE reference number

What is a P60 form?

A P60 form is an annual tax summary that shows how much an employee earned and how much tax they paid during the tax year. Employers must provide a P60 to anyone who is still employed on 5 April, and it must be issued by 31 May.  

Employees often use it as proof of income and tax paid when applying for mortgages, loans, benefits, or completing personal tax affairs.

What information does a P60 include?

A P60 form typically includes:

• Employee details  

• Employer details  

• National Insurance number  

• Tax code  

• Total pay for the tax year  

• Income tax paid  

• National Insurance contributions  

• Statutory payments and deductions, where applicable  

• Employer PAYE reference number

When do employees receive a P45 or P60?

Although both are important PAYE forms, they are issued at different points during employment.

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Employees may receive a P45 and a P60 in the same tax year if they change jobs and remain employed at the end of the tax year.

P45 vs P60: What's the difference?

It's easy to mix up a P45 and a P60. After all, they're both employee tax documents and both come from payroll. The difference is simple: a P45 is about leaving a job, while a P60 is about wrapping up the tax year.

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Think of it this way: the P45 closes one chapter, while the P60 sums up the whole story.

Why are P45 and P60 important?

For employees

• A P45 form helps a new employer apply the correct tax code, reducing the risk of emergency tax and payroll headaches.  

• A P60 form provides official proof of income and tax paid for mortgages, loans, tenancy applications, and benefit claims.  

For employers

• Issuing P45 forms ensures employee leaving details are recorded correctly and HMRC tax records remain accurate.  

• Providing P60 forms helps businesses meet payroll compliance requirements and gives employees a clear end-of-year tax summary.

What happens if an employee doesn't have a P45?

Employees can still start a new job without a P45 form, but a few extra steps may be needed.

• The new employer will ask the employee to complete a starter checklist.  

• Payroll will use this information to determine which tax code to apply.  

• The employee may temporarily be placed on an emergency tax code.  

• This can result in paying too much or too little tax for a short period.  

• Once HMRC updates the records, any tax adjustments are usually made automatically through PAYE.

How long should employers and employees keep P45 and P60 records?

Keeping payroll documents organised can save a lot of time later.

• Employers should keep payroll records, including details relating to P45 and P60 forms, for at least three years from the end of the relevant tax year.  

• Employees should keep their P45 and P60 forms for several years, especially if they may need proof of income, tax paid, or employment history.  

Frequently asked questions

1. Do self-employed workers get P45s or P60s?

No. P45 and P60 forms are PAYE documents issued to employees. Self-employed workers report their income and tax through self-assessment instead and do not receive these forms.

2. Can agency workers receive P45s and P60s?

Yes. If an agency worker is employed through PAYE, they can receive a P45 when leaving and a P60 if employed on 5 April.

3. Can an employee get a replacement P60?

Yes. Employers can usually provide a duplicate or replacement copy if requested. It is worth keeping P60 forms safe, as they are often needed as proof of income.