A P45 form is an official document given to an employee by their employer at the end of their employment. It normally includes the employee’s tax code, gross pay, how much tax they have paid, and the employer’s details.

What is a P45 used for?

Employers normally request a P45 when they take on a new member of staff so they know which tax code to operate against their salary. This information helps an employer to deduct the right amount of tax each time they pay their new employee.

Not every new starter will have a P45 – for example if this is their first job – so you’ll need to ask them to complete a New Starter Checklist instead (but yes, you can still take them on without a P45!).

Who issues a P45?

A P45 is issued by an employer at the end of employment. For example, if a member of staff puts in their notice or is dismissed, you’ll need to issue them with a P45. You can also issue a P45 to an employee if they’re leaving for another reason, such as retirement.
 

How do I issue a P45?

As an employer you’ll normally be able to issue a P45 using your payroll software (or ask your accountant or payroll provider to do this for you). If you don’t use software, you can use HMRC’s free PAYE tools to create a P45 instead.

How long is a P45 valid for?

A P45 is valid during the tax year it was issued in. If your new employee has a P45 for the previous tax year, you’ll need to ask them to complete the New Starter Checklist instead.

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