Employer's guide to issuing P45 forms
Learn when and how to issue P45s to employees who leave your business.
Written by Ebony-Storm Halladay — Freelance accounting copywriter, 10 years. Read Ebony's full bio
Published Thursday 2 July 2026
Table of contents
Key takeaways
- P45s are PAYE forms containing information about an employee's pay and deductions for the tax year so far. You issue a P45 when an employee leaves your company, so that they have the tax and pay information they need for a future employer, or to access benefits.
- There isn't a specific deadline for issuing a P45, but you should aim to send it as soon as the leaver's final pay is processed. Failing to provide a P45 before an ex-employee starts a new job can mean they're placed on emergency tax.
- How you create P45s depends on the tools you're using. Businesses with fewer than 10 employees can use HMRC's Basic PAYE Tools. Modern payroll software automatically generates P45s, ready to download and send to your leavers.
What is a P45?
A P45 is a type of PAYE form that employers provide to employees who are leaving their company. It contains information about an employee's pay and deductions for the tax year so far, up until the date they leave. You must provide a P45 when an employee leaves, whatever the reason. This includes if the person is choosing to stop working, retiring, or their contract is terminated.
The form is split into four different parts. You need to complete all four parts, which have various purposes:
- Part 1 is for you, the employer, to send to HMRC once you've filled in the information.
- Part 1A is for your ex-employee, and it contains much of the same information as in part 1.
- Parts 2 and 3 are for your ex-employee's new employer, or the Jobcentre Plus if they need to access benefits.
On the P45 form, you need to include your employer PAYE reference, information about how much your employee has been paid, student loans and deductions, their tax code, National Insurance number, and leaving date. HMRC provides an example P45 form online so you can see what it looks like.
Modern payroll software generates P45s for you, and lets you send them to HMRC via Real Time Information (RTI) submissions. Businesses with few employees also have the option of creating a P45 with Basic PAYE Tools. If you're exempt from online filing, you can contact HMRC to request P45 forms.
The purpose of a P45 form is to provide leavers with income, tax, and payroll information that they can pass on to their next employer. This enables the new employer to set the person up on their payroll system and work out how much tax they should be paying. Your ex-employee may also need to use their part (part 1A) to complete a Self Assessment tax return.
When to issue a P45
According to HMRC's guidance on employees leaving, you should issue a P45 when an employee leaves your business. While there's no specific deadline for when to give an employee a P45, your ex-employee will need the information contained within the form so that their new employer can set them up on payroll, or so they can access benefits if they're not working.
You should aim to issue a P45 as soon as you have the information available to complete it, which will usually be once their final pay has been processed. You can usually produce the final payslip and P45 at the same time in your payroll software. If there's a delay in issuing the P45, your ex-employee's new employer won't have the correct tax code, which could result in them being placed on emergency tax.
A P45 is only valid for the tax year it's issued in. So, if you hire somebody new, and their last P45 was issued in the previous tax year, you need to use the Starter Checklist for PAYE to fill in payroll information and get their tax right.
How to issue a P45 in payroll software
Creating a P45 in payroll software is straightforward. Here are the steps to follow when an employee leaves your business.
1. Set the employee's leaving date
Record the employee's leaving date in your payroll system. This flags the employee as a leaver and ensures the correct dates appear on their P45.
2. Calculate outstanding leave entitlement
Work out any outstanding holiday entitlement and add it to the employee's final pay. You'll need to pay any accrued holiday pay they're owed.
3. Process the final pay run
Add all remaining items to the employee's final payslip, including wages, deductions, bonuses, redundancy pay, and any other amounts owed.
4. Post the final pay run
Once you've confirmed the payslip details are correct, post the final pay run through your payroll software as normal.
5. Submit the Full Payment Submission (FPS) to HMRC
After posting the final pay run, submit the FPS to HMRC. This submission contains the leaver's information, including their pay and tax details for the current tax year.
6. Download and send the P45
Your payroll software should now generate the P45 automatically. Download it and send it to your ex-employee, keeping a copy for your records.
How employees get their P45
P45s used to be issued as paper forms, and while this might occasionally be the case now, they're usually created and shared digitally. Employees receive their P45 via email, once an employer has processed their final pay and created the P45 in payroll software.
Employers with fewer than 10 employees can use HMRC's Basic PAYE Tools to manage payroll, including creating P45s and sharing them with employees.
What is the difference between P45 and P60?
You issue a P45 when an employee leaves your business, for any reason. A P60 is issued to each of your existing employees, once per year, following the end of the tax year. A P60 contains similar information about pay and deductions as a P45, but P60s are for current employees only.
Employers must provide a P60 to each employee who's on the payroll on 5 April each year. Employees can use the information on a P60 to help them secure a loan or a mortgage.
Check the HMRC P45 guidance if you're not sure what form is relevant for your staff.
Run payroll and download P45s with Xero
Xero payroll software makes handling your employer obligations simple. Xero automates Real Time Information (RTI) submissions, so reporting to HMRC happens automatically and compliantly. With Xero payroll, P45s are generated for you, ready to download and share with your leavers.
Your employees can handle their own leave and pay information with ease through the self-serve app, Xero Me, which makes tracking holiday entitlement and viewing payslips straightforward. Xero automatically calculates pay, pension, and leave so you can get every pay run right.
FAQs on issuing P45 forms
Here's some extra guidance on common P45 questions for employers.
Can I email a P45?
Yes. You can email a P45 to your leaver for them to save or print. P45 information should also be submitted to HMRC via your payroll software or Basic PAYE Tools.
How quickly should I give a leaver their P45?
As soon as you can after processing their final pay run. The sooner you issue the P45, the sooner your ex-employee can provide it to their new employer and avoid being placed on emergency tax.
Can HMRC issue a P45 for my ex-employee?
No. It's your legal obligation as an employer to issue a P45 form for employees who are leaving.
Do casual, zero-hours, or short-tenure workers get a P45?
Yes. Any worker paid through PAYE should receive a P45 when they stop working for you, including casual and zero-hours workers and employees who leave before their first payday.
Can I correct a P45 after an RTI has been sent?
Once you've sent a P45 to your employee, you can't send another, even if it contains errors. Instead, you need to submit an amended FPS with the correct details to HMRC.
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