What Is a P45? Everything You Need to Know

Most people in the UK have received a P45 form at some point – but not everyone knows what it actually means or why it matters. 

A P45 is a tax document your employer gives you when you stop working for them. It shows how much you’ve earned and how much tax you’ve paid during the current tax year. Your next employer – or HMRC – uses it to make sure you’re taxed correctly going forward.

Read on to find out what a P45 form is, what it’s used for, when you should receive one, and how it compares to a P60.

What is a P45 Form?

A P45 form is an official document that employers issue when employees leave a job. It’s part of the UK PAYE system and helps HMRC keep track of your earnings and tax payments during the tax year.

A P45 form includes:

• Your tax code
• Your total earnings so far that tax year
• The amount of tax you’ve already paid
• Your leaving date
• Your National Insurance number

It’s what employers use to put new employees on the correct tax code. Without a P45, there’s a higher chance you’ll temporarily end up on an emergency tax code and pay the wrong amount of tax. It’s nothing out of the ordinary. It’s an administrative record that shows employment has terminated.

P45 Key Facts

Different Parts of a P45

P45 forms are split into four different sections, each going to different people/ organisations.

If you move into another job straight away, your new employer will normally ask for Parts 2 and 3 during onboarding. As an employee, Part 1A is the important bit for you to keep. 

Employers cannot usually issue a replacement P45 if you lose it, so be sure to store it safely alongside your payslips and P60s.

What Information Does a P45 Contain?

Now you know what a P45 form is, it’s time to learn what a P45 form contains. 

A P45 includes several pieces of information used for payroll and tax purposes, such as:

• Your full name and address
• Your National Insurance number
• Your tax code at the time you left
• Your leaving date
• Total pay for the current tax year
• Total tax paid so far that year
• Your employer’s PAYE reference number
• Employer details

A P45 only covers earnings within a tax year – from 6 April to 5 April the following year.

You may also notice your employer’s PAYE or payroll reference number on the form. If you’re unsure what payroll numbers mean or where to find them, read our guide on payroll numbers and how to find them. 

When Should You Receive a P45?

Legally, employers should provide a P45 to an employee when they leave employment. 

Typically, if you’re an employee who has left, you will receive your P45 on your last working day, with your final payslip, or whenever payroll has been processed. 

This applies whatever the circumstances of your leaving, whether it be resignation, redundancy, retirement, or any other reason.

Employers cannot legally refuse to give employees their P45 – it’s a legal obligation under HMRC rules.

Staying on top of this paperwork is an absolute must for employers. Any mistakes or late payroll reporting can result in issues further down the line. Our payroll services here at DH Business Support can help you stay on track. 

What Do You Do With a P45?

Wondering what to do with your P45? Here’s the information you need, whether you’re an employee or employer: 

If You’re an Employee

If you’re starting a new job, you should give Parts 2 and 3 of your P45 to your new employer as soon as possible. This will ensure you get on the right tax code from your first payslip.

You should keep PArt 1A for your own records – it might be useful later if:

• You need proof of income
• You complete a self-assessment tax return
• You apply for benefits
• HMRC queries your tax history

Don’t panic if you lose your P45 – your new employer can still add you to payroll using a Starter Checklist instead.

If You’re an Employer

When an employee leaves, your role as an employer is to:

• Record them as a leaver in your payroll software
• Submit the relevant information to HMRC
• Provide the employee with Parts 1A, 2, and 3

Send Part 1 electronically through your payroll software. If you do not issue a P45 properly, this can lead to payroll errors and potential HMRC penalties. 

The good news is our team at DH Business Support is equipped to help. We provide expert bookkeeping and compliance support to help you with the admin side of running payroll.

Tip – see the HMRC official guide on getting P45, P60 and other forms. 

P45 vs P60: What’s the Difference?

P45s and P60s are both related to tax and employment, but they serve different purposes:

1. A P45 is issued when you leave a job.
2. A P60 is issued at the end of the tax year to employees who are still employed on 5 April.

Here are some of the key similarities and differences: 

Final Note

A P45 is a standard HMRC document that records your pay and tax when you leave a job. Most people will receive one at some point, and while it looks official, it’s really just part of keeping your tax records accurate.

Be sure to keep Part 1A safe if you receive one. If you’re an employer, making sure P45s are handled correctly is an important part of staying compliant with payroll rules.

For support with payroll processes and compliance, contact us today. 

Frequently Asked Questions