What is a P60 Form and How to Use It?

In the UK, the P60 Form is a document that is issued by employers to their employees each year. It contains important information relating to the pay and deductions (e.g. tax and national insurance) for that individual. The P60 form is an important aspect of the Pay As You Earn (PAYE) scheme, which is how employers pay taxes and national insurance contributions to HMRC on behalf of their employees. In this article, we will explain everything that you need to know about the P60 form, including the information it contains, how to use it, and the duties of employers in the UK.

What is a P60 Form?

A P60 form summarises an employee’s total pay and deductions within a single tax year. In other words, it shows how much tax you have paid in the year and is issued at the end of the tax year. P60s must be prepared and issued each year by the employer for all staff within their employment on the last day of the tax year (5^th April). This is a mandatory requirement of His Majesty’s Revenue and Customs (HMRC).

A P60 is different from a P45. Employees who leave their jobs during the tax year must receive a P45 form from their employer when their employment comes to an end. 

What information is contained on a P60 Form?

The P60 form contains a summary of an employee’s total pay and deductions within a single tax year. The information that may be contained on a P60 form is as follows:

• Employer information: Including the employer’s name and address and PAYE reference number 
• Tax year: The financial year covered by the P60
• Total pay and income tax: Total earnings and income tax deducted. 
• National Insurance contributions
• Statutory payments: e.g. Statutory Sick Pay (SSP) 
• Student loan deductions: Any repayments made towards a student loan 
• Pension contributions
• Tax code, and
• Employer’s final pay and tax figures: A summary of final pay and tax for the year.

Responsibilities of employers to issue a P60 

Employers issuing P60s to their employees are generally expected to:

• Issue a P60 to all of the employees who are on their payroll as of 5^th April (the last day of the tax year)
• Issue P60s to employees by 31^st May
• Keep records of all P60s they issue to their employees for at least 3 years. This means that they can be shown to HMRC in the event of a tax inquiry. 
• Ensure that the information on the P60 is as accurate as possible to avoid the potential for tax discrepancies
• Make P60s readily accessible to employees
• Provide assistance to employees if corrections to the P60 are required, and
• Help employees understand how to interpret their P60.

Failure to issue a P60 by the deadline of 31^st May to all employers can lead to substantial fines, as we will discuss later in this article. 

How do employers produce a P60?

How you produce your P60s will depend on how you run your payroll as a business. Many employers use external payroll providers who will provide a P60 on their behalf to each employee. Likewise, employers often rely on their accountants to handle their payroll and P60 requirements. Where payroll is undertaken in-house, many modern accounting systems will automatically produce a P60 form for each employee with minimum effort. This includes payroll software such as Xero, Sage, and Quickbooks. Businesses with less than 10 employees can use HMRC’s Basic PAYE tools to produce their P60s at no cost. 

If you are exempt from filing payroll online (i.e. you send your payroll information by paper), you can order paper P60s from HMRC. These will normally arrive within 7 days of ordering. Once received, you will need to prepare the P60s manually. 

What if an employer is exempt from filing payroll online?

A small number of employers in the UK are exempt from filing their payroll online, and can order copies of P60s from HMRC. This includes businesses that provide care or support services at or from the home, those that are unable to file online, and those with exceptional circumstances. To order copies of P60s as an employer, you will need to contact HMRC. It is important to remember that when using the HRMC P60 ordering service, it can take several days for the forms to arrive. For this reason, we recommend ordering the forms you require in good time prior to the deadline for issuance to your employees (31^st May).  

Can an employer make changes to a P60?

Yes, you can change a P60 if you have made a mistake. If you have discovered or been made aware of a mistake on a P60, you can simply correct the issue and produce a replacement. It is important to make sure that the new P60 is clearly marked with the word ‘replacement’. Alternatively, you can issue the employee a letter confirming the change you have made. 

To reduce the number of errors on P60s, it is important to regularly check the information you hold on your employees, including their tax codes. 

Do I need a P60 if I am self-employed?

No, there is no need for a self-employed person to have a P60. This is because P60s are only issued to employed people who are paid under the Pay As You Earn (PAYE) scheme. Instead of using PAYE, self-employed people report their income by preparing and submitting a Self-Assessment tax return each year to HMRC. They can then use an SA302 as proof of their income. This shows their total income on which tax is due, any allowances and relief, the total amount owed for the tax year, and how HMRC has worked out the amount owed.

Important points:

• If you own a limited company, you are still classed as an employer of that company. This means that you will still require a P60.
• If you are a sole trader, you will need a P60 if you pay yourself a salary through PAYE. This also applies to anyone you employ.

 Why should employees retain their P60?

Employees should retain their P60 form each year to prove their level of income. Employees can use their P60 to check how much tax they paid within the previous tax year. In some cases, they can then reclaim any amount overpaid if they have paid too much.

It may be necessary to provide a P60 when:

• When applying for a mortgage or bank loan
• Claiming overpaid tax from HMRC, 
• Applying for tax credits
• Completing a self-assessment form
• Applying for means-tested benefits

What is the penalty for failing to issue a P60 by the deadline?

It is essential to ensure that you provide your employees with a P60 by the deadline of 31^st May each year. Failure to provide a P60 to an employee by the deadline date may result in a fine of £300 for each P60 not issued. There may then be a fine of £60 for each day the P60 is not provided.

The financial cost of not issuing P60s on time can be enormous, especially for employers with lots of staff and where there is a large delay in providing the document.

P60 form summary

Here is a summary of the key features of an HMRC P60 form:

Feature	Description
Purpose	Summarises an employee’s total pay and deductions for the tax year
Issued by	Employers who pay their staff through PAYE
Issued to	Employees who are employed on the last day of the tax year (5th April)
Deadline for Issuing	By 31st May, following the end of the tax year
Covers Tax Year	The tax year i.e. 6th April to 5th April
Contains	Applicable tax year (e.g. tax year to 5th April 2025) Employee’s name, NI number and payroll number Pay and tax deducted from previous employment Pay and tax deducted from current employment Total pay and tax for the year National insurance contributions  Statutory payments made (including statutory maternity pay, statutory adoption pay, statutory paternity pay, statutory parental bereavement pay, and statutory shared parental pay) Student loan deductions Postgraduate loan deductions Employer’s full name and address Employer’s PAYE reference number
Format	Paper or electronic
Used for	Proof of income for mortgage or loan applications, to check the amount of tax paid, and to claim tax refunds or benefits
Legal Requirement?	Yes – must be provided to employees by law

Final words

We hope you have found this guide to P60s useful and insightful. As we have discussed, employers paying their staff through HMRC’s PAYE system must give all employees employed on the last day of the tax year (5th April) a P60, digitally or in paper form. This process is often handled by payroll providers and software, meaning that it is normally quick and easy to complete. Not providing a P60 to all staff who should receive one is a serious matter that can lead to substantial fines. It is important for employees to keep hold of their P60 as it may be needed as proof of income (e.g. when applying for a mortgage). If they lose their P60, their employer should issue a replacement. 

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