What is a P45?

Published Wednesday 17 June 2026

Table of contents

• What is a P45?
• What is a P45 used for?
• When should a P45 be issued?
• What information is on a P45?
• What does a P45 look like?
• How to get a P45 as an employer
• What to do with your P45 as an employee
• What happens if you don't have a P45?
• P45 vs P60: what's the difference?
• How long should you keep a P45?
• Help simplify P45s and payroll with Xero
• FAQs on P45 forms

Key takeaways

• A P45 is a tax document you must give to every employee when they leave your business, showing their pay and the tax they've paid in that tax year.
• As an employer, you're legally required to issue a P45 through your payroll software or HM Revenue and Customs (HMRC) Basic PAYE Tools whenever someone resigns, retires, is made redundant or is dismissed.
• If a new starter doesn't have a P45, they'll need to complete HMRC's starter checklist so you can set up their tax code correctly.
• You must keep P45 records for at least 3 years from the end of the tax year they relate to, though holding them longer is good practice.

What is a P45?

A P45 is an official tax form that records how much an employee has earned and how much tax they've paid during their time with an employer. It's 1 of the most important payroll documents in the UK tax system.

When someone leaves your business, you're legally required to provide them with a P45. HM Revenue and Customs (HMRC) uses the information on this form to make sure the employee is taxed correctly in their next role or when claiming benefits.

Today, P45s are generated electronically through payroll software as part of HMRC's Real Time Information (RTI) reporting system, part of the wider PAYE system. Rather than submitting paper forms, you report payroll data to HMRC each time you run your payroll, and the P45 is produced when you record an employee's leaving date.

What is a P45 used for?

A P45 serves different purposes depending on whether you're the employer issuing it or the employee receiving it. Here's how each side uses the form.

For employers

As an employer, the P45 is your formal record that an employee has left and that you've reported their departure to HMRC. Issuing a P45 ensures you stop paying tax on that person's behalf and that HMRC's records are up to date.

When a new employee joins your business with a P45 from their previous employer, you use it to set up their tax code in your payroll. This helps you deduct the right amount when paying employees.

For employees

For employees, a P45 is proof of the income they've earned and the tax they've paid. They'll give parts of the form to their new employer so they're placed on the correct tax code straight away.

If they're not moving into another job, they can use their P45 to claim Jobseeker's Allowance or other benefits, or to complete a Self Assessment tax return. It's also useful for checking whether they've overpaid tax during the year.

When should a P45 be issued?

You must issue a P45 whenever an employee's contract with your business comes to an end, regardless of the reason. Here are the most common scenarios.

• Resignation: the employee chooses to leave for a new role or personal reasons.
• Redundancy: the employee's position is no longer needed.
• Dismissal: the employment is terminated by you as the employer.
• Retirement: the employee leaves the workforce.
• End of a fixed-term contract: the contract reaches its agreed end date and isn't renewed.

In every case, you should provide the P45 on or as soon as possible after the employee's last working day. Delays can cause problems for the employee when starting a new job or claiming benefits.

What information is on a P45?

A P45 contains the key details HMRC needs to track an employee's tax position for the year. Here's what you'll find on the form.

• The employee's full name, date of birth, and National Insurance number
• The employer's PAYE reference number
• The employee's tax code at the date of leaving
• Their leaving date
• Total pay in the current tax year up to the leaving date
• Total tax deducted in the current tax year up to the leaving date

It's worth noting what a P45 doesn't include. There's no breakdown of National Insurance contributions, pension deductions, or student loan repayments. Those details are reported separately through your payroll's RTI submissions to HMRC.

What does a P45 look like?

A P45 is split into 4 parts, each with a specific purpose. Understanding the structure helps you make sure the right sections go to the right people.

• Part 1: sent to HMRC automatically when you process the leaver through your payroll software. You don't need to post anything separately.
• Part 1a: for the employee to keep for their own records.
• Part 2: for the employee to give to their new employer.
• Part 3: also for the employee to give to their new employer, or to Jobcentre Plus if they're claiming benefits.

As the employer, your main responsibility is making sure Parts 1a, 2, and 3 reach the departing employee. You can provide these electronically or as printed copies.

How to get a P45 as an employer

Producing a P45 is straightforward when you have the right tools set up. Here's how to do it step by step.

Step 1: record the leaving date in your payroll

Enter the employee's final working date and process their last pay run. This triggers the RTI submission to HMRC that confirms the employee has left.

Step 2: generate the P45 through your payroll software

Most payroll software will produce the P45 automatically once you've processed the leaver. The form is populated with the employee's pay and tax details for the current tax year. If you use Xero's payroll, you can generate and send the P45 directly from the platform.

Step 3: give the P45 to the employee

Provide Parts 1a, 2, and 3 to the departing employee. You can email the form or hand them a printed copy. Part 1 goes to HMRC automatically through your software.

If you don't have payroll software

If you're not using payroll software, you can download HMRC's free Basic PAYE Tools to produce P45s. Alternatively, contact HMRC directly for help with forms and stationery.

What to do with your P45 as an employee

If you've just left a job, your P45 is an important document to hold onto. What you do with it depends on your next step.

• Starting a new job: give Parts 2 and 3 to your new employer so they can set up your tax code correctly from day 1.
• Claiming benefits: give Part 3 to your local Jobcentre Plus when signing on for Jobseeker's Allowance or other benefits.
• Becoming self-employed: keep your P45 for your records. You'll need the pay and tax figures when you fill in your Self Assessment tax return.
• Taking a break from work: store it safely. You may need the details later if you want to check whether you've overpaid tax or when you file a tax return.

Whatever your situation, keep Part 1a for yourself. It's your personal record of what you earned and the tax you paid with that employer.

What happens if you don't have a P45?

Sometimes a new employee won't have a P45 when they start. This can happen if it's their first job, if their previous employer hasn't provided 1 yet, or if the form has been lost.

In this situation, the new employee needs to complete a starter checklist (previously known as a P46). This form asks for basic personal details and helps you work out which tax code to apply. You can download the starter checklist from the GOV.UK website.

Without a P45 or a completed starter checklist, you'll need to put the employee on an emergency tax code. This often results in the employee paying more tax than they owe. They can reclaim any overpaid tax from HMRC once their correct tax code is applied, but it's better to avoid delays by collecting the right paperwork early.

P45 vs P60: what's the difference?

P45s and P60s are both tax documents, but they serve different purposes and are issued at different times. Here's how they compare.

A P45 is issued when an employee leaves a job. It covers the period from the start of the tax year (6 April) up to their leaving date and shows the pay and tax for that portion of the year only.

A P60 is issued at the end of each tax year (5 April) to every employee still on your payroll. It summarises their total pay and tax deductions for the full year.

The key difference is timing: a P45 is a mid-year document triggered by a departure, while a P60 is an annual summary. An employee who leaves partway through the year will receive a P45 from you but won't get a P60 for that employment, because they weren't on your payroll at the year end.

How long should you keep a P45?

As an employer, you're required to keep P45 records for at least 3 years from the end of the tax year they relate to. This is the minimum PAYE record-keeping period set by HMRC.

That said, holding onto records for longer is good practice. HMRC can inspect payroll records going back up to 20 years in cases of suspected fraud or non-compliance. While this won't apply to most businesses, keeping well-organised records protects you if questions arise later.

Cloud-based payroll software like Xero stores your payroll data securely online, so you don't need to worry about filing paper copies or digging through old folders. Your P45 records are there whenever you need them.

Help simplify P45s and payroll with Xero

Managing P45s, tax codes, and HMRC reporting doesn't have to eat into your week. With Xero's payroll software, you can generate P45s automatically when an employee leaves, submit RTI reports to HMRC in real time, and keep all your payroll records stored securely in the cloud.

Xero is built for small businesses that want to spend less time on admin and more time growing. It handles the compliance details so you don't have to worry about missing a deadline or filing the wrong form. Get one month free.

FAQs on P45 forms

Here are some frequently asked questions about P45 forms.

When should I receive a P45?

Your employer should give you a P45 on or shortly after your last working day. If you haven't received 1 within a few weeks of leaving, contact your former employer or HMRC for help.

Do I need a P45 to start a new job?

No, you can start a new job without a P45. Your new employer will ask you to complete a starter checklist instead, which lets them set up your tax code.

Can I get a P45 if I'm self-employed?

No, P45s are only issued to employees leaving PAYE employment. If you're self-employed, you report your income and tax through Self Assessment instead.

How do I get a copy of a lost P45?

Your employer can't reissue a P45, but they can provide a letter confirming the same details. You can also contact HMRC to check your tax records are correct.

Is a P45 the same as a P60?

No. A P45 is issued when you leave a job and covers the tax year up to your leaving date. A P60 is issued at the end of each tax year to employees still on the payroll.