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P45 and P60 Explained

1. Full time work 2. Part time work 3. Understanding payslips
4. National Insurance 5. P45 and P60 explained 6. Income tax
7. Tax codes - what are they? 8. Pension 9. Getting a job

5. What is a P45?

If you leave a job or stop claiming certain taxable benefits you will receive a P45 from your employer/DWP.  A P45 is important as it tells you how much tax you have paid so far in the tax year (the tax year runs from April 6th to April 5th each year).  Your employer/DWP must give it to you by law, so make sure you ask for it if you have not received it when leaving the job or signing off.

A P45 is spilt into 4 parts:

  • Part 1- This is the part your employer sends to HM Revenue and Customs (HMRC) and not to you;
  • Part 1A - This part is for you;
  • Part 2 and Part 3 - This section you will need to give to your new employer or to Jobcentre Plus if you are not working

Your P45 will have yours and your employer's details.  For example, it will have:

  • Your National Insurance number;
  • Your name, date of birth;
  • Employer's PAYE reference, your tax code;
  • Your leaving date;
  • Amount you have been paid by your employer and the total tax you have been paid

Make sure you give your new employer/DWP your P45 as soon as possible so you can get the correct tax code.  If not, you may pay too much or not enough tax. 

Sometimes employers use a starter checklist to get information from you about previous work, benefits or student loans you may have, if you don't have a P45. This is then used to work out your tax code before your first payday.


What is a P60?

You will receive a P60 at the end of every tax year from your employer/DWP, which explains how much tax you have paid that tax working year.  On your P60 it will have:

  • Your National Insurance number;
  • Payroll/Work number;
  • Your national insurance contributions;
  • Your total earnings and tax deducted

You will need a P60 to prove how much tax you have paid if you need to:

  • Claim any money back if you have paid too much tax;
  • Apply for Tax Credits;
  • Use it to prove your income if applying for a loan or a mortgage

Your P60 should be with you by 1st June.  If you have not received it, make sure you ask your employer/DWP about it.  If you think you paid too much tax last year, you are able to check this on the HMRC tax calculator.

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