What Is a P45 and When Must Employers Issue One?
This guide provides general payroll information and is not tax, legal, or employment advice. Payroll requirements can vary according to individual circumstances, and HMRC guidance can change. Check current official guidance or seek appropriate professional advice where necessary.
A P45 is the document an employer gives an employee when they leave a job. It records important PAYE information, including their leaving date, tax code, and pay and Income Tax for the tax year up to that point.
Employers must give an employee a P45 when they leave. In a straightforward leaver payroll, the form is produced from the payroll record once the relevant leaving information and pay have been processed. Different treatment can apply in particular circumstances, such as where certain statutory payments continue after employment ends.
What does a P45 actually tell you?
A P45 provides a record of the employee’s PAYE position when their employment ends.
It includes information such as:
- the employee’s name
- National Insurance number
- leaving date
- tax code at the point of leaving
- total pay for the tax year to date
- total Income Tax deducted for the tax year to date
The official GOV.UK guidance on P45 forms also explains how employees use the document when moving to another job.
The figures on the P45 come directly from the employee’s payroll record, so errors in the underlying data can carry into the form. That is why the leaver record needs to be checked before it is closed.
When does an employer have to issue a P45?
Employers must give an employee a P45 when that employee leaves their employment.
That can follow:
- resignation
- dismissal
- redundancy
- retirement from employment
- the end of a fixed-term contract
- another situation where the employee leaves the PAYE employment
HMRC’s guidance for employers when someone leaves sets out the payroll steps, including recording the leaving date and giving the employee a P45.
Employment-law questions about why somebody has left, whether notice was handled correctly or what compensation may be due are separate from the payroll requirement to process the leaver correctly.
Check the employee’s final payroll position
Before closing the employee’s payroll record, establish what needs to be included in their final payroll.
That might involve:
- salary or wages up to the leaving date
- approved overtime
- commission or bonuses already due
- outstanding holiday pay
- statutory payments where applicable
- authorised deductions
- PAYE and National Insurance
Holiday pay is one area where accurate records matter at the point somebody leaves. Our guide to holiday pay record keeping looks more closely at maintaining the information behind those calculations.
A practical leaver check might look like this:
| Item | What needs confirming |
| Leaving date | The correct date held in payroll |
| Final earnings | Salary, hours and other amounts due |
| Holiday | Any outstanding entitlement affecting final pay |
| Deductions | PAYE, NI and other applicable deductions |
| HMRC reporting | Leaving details included correctly |
| P45 | Produced using the appropriate payroll record |
There are exceptions to the usual sequence. For example, certain statutory payments can continue after employment ends, and HMRC allows different treatment for when the P45 is issued in those circumstances. Where statutory payments continue after the leaving date, check the applicable HMRC rules before closing the record.
What if the employee is paid again after their P45?
A payment identified after the P45 has been issued follows different payroll rules from the original final payment.
If a taxable payment becomes due after the employee has already left and received their P45, HMRC does not normally require another P45.
Instead, the payment needs to be dealt with under HMRC’s payment-after-leaving rules. The employer reports it through the relevant Full Payment Submission using the appropriate leaving information and gives the former employee written confirmation of the additional payment and deductions.
An additional payment could arise from an unexpected bonus, outstanding holiday pay or another amount identified after the original payroll was closed.
The important point is that a second P45 should not simply be issued because another payment has been made.
What does the next employer do with the P45?
A P45 also has an important role when the employee starts somewhere new.
The new employer can use information from it to help establish the employee correctly in payroll, including their:
- previous pay and tax for the current tax year
- tax code
- National Insurance number
- whether student loan deductions should continue, where indicated
- previous leaving date
This helps the new payroll continue the employee’s PAYE position using the available information from their previous employment.
The P45 still needs to be handled according to the PAYE rules applying when the employee starts. It is not simply a matter of copying every figure without considering how HMRC requires the information to be used.
What if a new starter does not have a P45?
A missing P45 does not mean the employee cannot be added to payroll.
There are several reasons somebody may not have one. They could be starting their first job, have lost the document, still be waiting for it, or have another employment situation that means no suitable P45 is available.
HMRC’s starter checklist can be used where an employee does not have a suitable P45 so the employer can obtain the information needed to establish the appropriate starter declaration and tax treatment.
Employers should not guess the employee’s previous pay, tax or employment position simply to complete the setup.
If the P45 arrives later, the payroll record may need updating according to HMRC’s rules and whether HMRC has already issued a tax code.
Lost, late and incorrect P45s need different treatment
Not every P45 problem has the same solution.
If the employee loses their P45
GOV.UK states that a lost P45 cannot simply be replaced. A new employer can instead use the starter process where appropriate.
If the P45 arrives late
The new employer may need to update the payroll record using the information on the document, depending on the employee’s existing payroll position and whether HMRC has already issued a tax code.
If the P45 contains incorrect information
The action depends on what is wrong.
If the pay or tax figures are incorrect, GOV.UK advises the employee to ask the previous employer to correct the details and provide an amended P45. The appropriate correction depends on the type of error, so employers should follow HMRC guidance rather than simply creating a duplicate form.
If an amended P45 cannot be obtained, the employee may need to contact HMRC about the incorrect information.
Check whether the problem is a lost document, a late document or incorrect payroll information before changing the employee’s record. Each situation can require different treatment.
P45, P60 and P11D are not interchangeable
These forms all relate to payroll and tax, but they serve different purposes.
| Form | When it is relevant |
| P45 | When an employee leaves a job |
| P60 | At tax year-end for an employee still employed on 5 April |
| P11D | Where the relevant rules require certain taxable benefits and expenses to be reported |
An employee does not receive a P45 simply because the tax year ends.
If they remain employed, the relevant year-end document is normally the P60. A P11D deals with a different reporting requirement, and our guide to P11D forms explains that area separately.
Each form serves a different payroll purpose, so a P45 should not be used in place of year-end or benefits reporting.
Good leaver information matters
Leaver payroll can become difficult when payroll receives the leaving date before final hours, holiday information, commission, or other approved payments are available.
Before closing the record, check:
- Is the leaving date correct?
- Have all known payments been included?
- Have the appropriate deductions been processed?
- Has the employee’s leaving information been reported correctly?
- Does the P45 reflect the appropriate payroll record?
These are practical payroll controls rather than additional statutory forms. Their purpose is to reduce the risk of closing the employee’s payroll record using incomplete information.
How we support starter and leaver payroll administration
Starters and leavers form part of the normal payroll cycle.
Through our payroll services, we handle payroll processing, starters and leavers, P45s and electronic submissions to HMRC.
We still need accurate information from your business, including the employee’s leaving date and any final-pay details that affect their last payroll.
If leaver administration is becoming difficult to coordinate alongside the rest of payroll, we can discuss how your current process works and where our payroll support could fit.
Close the employment record with the right information
An accurate P45 depends on an accurate leaver payroll record.
For the employer, the priority is to establish the employee’s payroll position, report the leaving information correctly and issue the P45 in line with the circumstances of that employment.
For the next employer, the same document helps establish the employee in payroll. Where no suitable P45 is available, HMRC’s starter process provides the alternative rather than leaving employers to make assumptions about the employee’s tax position.
