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What is a P45? When to issue one, what it contains, and what to do with it
A P45 is a statutory payroll document issued by an employer to an employee when their employment ends. It records the total taxable pay and the amount of Income Tax deducted in the current tax year up to the leaving date.
By law, UK employers registered for Pay As You Earn (PAYE) must generate a P45 for every leaver and report their departure to HM Revenue and Customs (HMRC) via Real Time Information (RTI).
When should an employer issue a P45?
You should give an employee a P45 when they leave your employment and you have processed their final pay.
There is no separate annual P45 deadline. Instead, the P45 should be produced as part of the employee's leaving process. HMRC guidance requires employers to give the employee their P45 when they stop working for them.
This applies whether an employee:
Resigns from their position
Is dismissed
Retires
Reaches the end of a fixed-term contract
Is made redundant
Leaves for another job
Stops working for the employer for another reason
Multiple Employments Note: If an employee holds multiple distinct jobs with the same employer under separate payroll IDs, only close the specific payroll record for the role they are leaving and generate a P45 for that record alone.
What Information Does a P45 Contain?
A P45 gives HMRC and the employee's next employer an accurate summary of their current-year tax position. It contains:
Employee’s full legal name and National Insurance (NI) number
Official leaving date
Total taxable pay received in the current tax year up to the departure date
Total Income Tax deducted during the current tax year
Final tax code and calculation basis (cumulative vs. non-cumulative/Week 1/Month 1)
Student loan deduction status (Plan 1, Plan 2, Plan 4, or Postgraduate)
Employer’s PAYE reference and payroll ID
The Four Parts of a P45
A P45 is divided into four standardized parts:
Part | Recipient | Action Required |
Part 1 | HMRC | Transmitted automatically to HMRC by the employer via the Full Payment Submission (FPS). |
Part 1A | Employee | Kept by the employee for their personal tax and financial records. |
Part 2 | New Employer | Given to the new employer to set up the correct starter tax code and year-to-date pay figures. |
Part 3 | New Employer / DWP | Used by the new employer to notify HMRC of the new starter, or submitted to the Department for Work and Pensions (DWP) if the worker claims Jobseeker's Allowance or other benefits. |
Note: Employers are legally permitted by HMRC to provide Parts 1A, 2, and 3 electronically (such as a secure PDF or via an employee self-service portal), provided the employee can view and print them.)
P45 vs. P60: Key Differences
Employers often confuse P45 and P60 forms. Both summarize pay and tax deductions, but they are triggered by different events:
Feature | P45 | P60 (End of Year Certificate) |
When is it issued? | When an employee leaves the company. | After the end of the tax year (must be provided by 31 May). |
Who receives it? | Any employee who leaves during the tax year. | Only employees still on your payroll on 5 April. |
Timeframe covered | Current tax year up to the leaving date. | The entire tax year (6 April – 5 April). |
Primary purpose | Transfers cumulative tax details to a new employer. | Provides proof of annual income, deductions, and NI paid. |
Special Circumstances and HMRC Rules
1. What if an employee loses or does not have a P45?
Employers are legally prohibited from reissuing a replacement P45.
If a new hire has lost their P45, never received one, or is working their first job, they must complete an HMRC Starter Checklist. The checklist provides the data required to apply the correct starter tax code. If an employee provides neither a P45 nor a Starter Checklist, the employer must put them on an emergency 0T tax code on a non-cumulative basis.
2. What if an employee leaves with zero final pay?
A P45 must still be produced even if the employee’s final pay is £0 (for example, if they leave after an extended period of unpaid leave). Record the leaving date in payroll and file the FPS as normal.
3. What happens if you pay an employee after issuing their P45?
If an employer owes a leaver additional funds (such as late overtime, trailing commission, or unused statutory holiday pay) after the P45 has already been issued:
Do NOT reissue a P45 or alter the recorded leaving date.
Process the payment using an emergency 0T tax code on a non-cumulative (Week 1/Month 1) basis.
Submit the payment details on your next FPS submission.
Provide the worker with a standard payslip or written confirmation of the payment and tax deducted.
Step-by-Step Employer Offboarding Checklist
Calculate Final Pay: Tally up worked hours, accrued untaken statutory holiday, bonuses, commissions, or statutory redundancy payments.
Record the Departure: Input the official leaving date into your payroll software.
Submit via RTI: Send the leaver details to HMRC on or before the pay date using a Full Payment Submission (FPS).
Issue the P45: Provide Parts 1A, 2, and 3 to the employee securely (paper or electronic PDF).
Retain Records: Archive all associated payroll records for at least 3 years from the end of the tax year they relate to, in compliance with HMRC rules.
P45 and HMRC's Real Time Information
The P45 is connected to the employer's PAYE reporting responsibilities.
Employers report payroll information to HMRC through Real Time Information (RTI). When an employee leaves, the employer includes the relevant leaving date in their Full Payment Submission (FPS).
This means the employee's departure is communicated to HMRC as part of the normal payroll reporting process rather than through a separate standalone P45 submission.
The P45 provided to the employee should match the information held in the employer's payroll records and reported through RTI.
Common P45 mistakes employers should avoid
P45 errors can cause confusion for both employers and employees. Most problems can be avoided by making the leaving process part of a consistent payroll workflow.
Common mistakes include:
Entering the wrong leaving date
Using an incorrect tax code
Reporting incorrect pay or tax figures
Forgetting to process the employee as a leaver
Issuing the P45 before processing the employee's final pay when the payroll process requires otherwise
Failing to report the employee's leaving date through RTI
Creating duplicate employee records when an employee returns
Not keeping accurate payroll records
Failing to account for payments made after the employee has left
The P45 is generated from payroll information, so the best way to avoid errors is to make sure the underlying employee and payroll records are accurate before completing the leaving process.
P45 deadlines
The P45 should be given to the employee when they leave the business. The leaving date should also be reported to HMRC through the employer's payroll reporting.
This makes the P45 part of the normal employee offboarding process rather than a separate year-end payroll task.
A simple process can help payroll teams stay consistent:
Confirm the employee's final working date.
Process any final salary, holiday pay, bonus, or other applicable payments.
Check the employee's tax code, pay, and tax deductions.
Record the leaving date in payroll.
Submit the relevant payroll information to HMRC.
Generate and provide the P45 to the employee.
Retain the necessary payroll records.
Simplify P45 Processing with Zoho Payroll
Generating P45s manually increases the risk of calculation discrepancies, wrong tax codes, or missed RTI deadlines.
Zoho Payroll automates the entire leaver workflow for UK businesses:
Calculates accurate final pay, including pro-rated salary and accrued holiday.
Generates digital, HMRC-compliant P45s instantly when an employee is marked as a leaver.
Automatically includes leaving dates and year-to-date totals in your scheduled Full Payment Submissions (FPS).
Delivers P45s directly to employees through a secure employee self-service portal.
Frequently Asked Questions
Can an employer send a P45 by email?
Yes. HMRC permits employers to issue P45s as electronic documents (such as secure PDFs via email or downloadable portal files), provided the employee has the means to print or save the document.
Do I need to issue a P45 at the end of every tax year?
No. A P45 is only created when an employment ends. Workers who remain employed with you on 5 April receive a P60, not a P45.
What should an employee do with their P45?
The employee should retain Part 1A for their personal records and hand Parts 2 and 3 to their new employer (or Jobcentre Plus if claiming benefits) so their tax code is set correctly.
Can an employee generate their own P45?
No. A P45 can only be generated through an employer’s registered PAYE payroll system.
What happens if I lose my P45?
If you lose your P45, tell your new employer. You generally do not need to obtain a replacement P45. Your new employer can use the appropriate starter process and HMRC information to establish your tax position.
Can I start a new job without a P45?
Yes. If you do not have a P45, your new employer can ask you to complete a Starter Checklist or provide other information needed to determine your tax code and PAYE treatment.
Does an employer send the P45 to HMRC?
The employer reports the employee's leaving information to HMRC through their payroll reporting. The employee receives the relevant P45 information for their own records and, where applicable, their next employer.
What if I receive a payment after my P45 has been issued?
Payments made after an employee has left can have specific PAYE treatment depending on the nature and timing of the payment. Employers should process these payments according to HMRC rules rather than automatically issuing a new P45.