Key facts
- A P45 has 4 parts: Part 1 goes to HMRC (sent electronically via the FPS), Parts 1A and 2 go to the employee, and Part 3 goes to the new employer.
- The P45 shows the employee’s tax code, total pay, and total tax deducted in the current tax year up to the leaving date.
- Employers must issue the P45 on or very soon after the employee’s last day — there is no statutory time limit, but HMRC expects it promptly.
- The new employer uses the P45 to set up the leaver on their payroll with the correct tax code and cumulative figures.
- If an employee does not have a P45 (lost or first job), the new employer uses a starter checklist instead.
What Is a P45?
A P45 is an official tax document that an employer must issue to an employee when they leave employment. It contains the details HMRC and the new employer need to continue operating PAYE correctly — primarily the employee’s tax code and the pay and tax figures for the year to date.[1]
The name “P45” comes from the HMRC form number. Although the process is now largely electronic (via RTI), the term P45 is still universally used and the physical document (or its electronic equivalent) remains essential for employees changing jobs.
The Four Parts of a P45
A P45 consists of four parts, each serving a different purpose:[1]
| Part | Recipient | Purpose |
|---|---|---|
| Part 1 | HMRC | Reported electronically via the FPS (no longer sent on paper) |
| Part 1A | The employee | The employee’s own record — to keep for their files |
| Part 2 | The employee (to give to new employer or Jobcentre Plus) | Used to claim Jobseeker’s Allowance or other benefits if not starting a new job immediately |
| Part 3 | The new employer | Provides the tax code and year-to-date figures for setting up the payroll |
What Information a P45 Contains
The P45 includes:
- The employee’s full name and National Insurance number
- The employer’s PAYE reference number
- The leaving date
- The employee’s tax code at the date of leaving
- Total pay in the tax year up to and including the final payment
- Total tax deducted in the tax year
- Whether the tax code was operated on a cumulative or Week 1/Month 1 basis
- The employee’s student loan plan type (if applicable)
Key point: The pay and tax figures on the P45 cover the entire tax year from 6 April to the leaving date — not just the period of employment with this employer. If the employee had a previous employer in the same tax year, their P45 figures should include pay and tax from that earlier employment (as carried forward when they joined).
Issuing a P45 (Employer’s Steps)
When an employee leaves, the employer must:[2]
- Process the final pay run — calculate and pay any remaining salary, holiday pay, bonuses, or notice pay
- Record the leaving date on the payroll system
- Submit the FPS with the leaving date and final year-to-date figures — this fulfils Part 1
- Generate the P45 from the payroll software
- Give Parts 1A, 2, and 3 to the employee (on paper or electronically)
Receiving a P45 (New Employer’s Steps)
When a new employee presents a P45 from their previous employer:
- Check the details — ensure the name and NI number match the new employee
- Enter the tax code from the P45 into the payroll system
- Enter the year-to-date pay and tax so the cumulative calculation continues correctly
- Note the student loan indicator if present
- Report the new starter on the first FPS, including the P45 information
Tip: If the P45 is from a previous tax year (for example, the employee left their old job in March and starts the new job in May), the year-to-date figures will not carry forward. Use the tax code from the P45 but start the year-to-date figures at zero for the new tax year.
What If There Is No P45?
If a new employee cannot provide a P45 (because they have lost it, it is their first job, or it has not arrived yet), the employer must use a starter checklist (formerly the P46) to determine the correct tax code. The employee completes the checklist, choosing from statements A, B, or C, and the employer applies the corresponding starter tax code.[3]
Special Situations
- Death of an employee: The employer issues the P45 and sends it to HMRC via FPS. Parts 1A and 2/3 are sent to the personal representative or next of kin.
- Employee going abroad: Issue the P45 as normal. The employee may need it for their overseas tax return or to reclaim UK tax.
- Redundancy: The P45 is issued in the normal way. Redundancy payments up to £30,000 are tax-free and are not included in the P45 pay figure.
Frequently Asked Questions
Does the employer still send Part 1 to HMRC on paper?
No. Since RTI was introduced, the employer reports the leaver’s details electronically through the Full Payment Submission (FPS). The FPS includes a “leaving date” field and the year-to-date figures. Part 1 no longer needs to be sent on paper — the FPS serves the same purpose. The employer still gives Parts 1A and 2 to the employee, and Part 3 is for the new employer.
What if the employee has multiple jobs?
Each employer issues a P45 when the employee leaves that particular job. If someone has two part-time jobs and leaves one, they get a P45 from the employer they are leaving. Their other job is unaffected. If they start a new job, they give the P45 from the old job to the new employer.
Can an employer refuse to issue a P45?
No. Employers are legally required to issue a P45 when an employee leaves. If an employer unreasonably delays or refuses, the employee can contact HMRC, who may intervene. HMRC can also issue penalties to employers who fail to comply with PAYE obligations, including P45 requirements.
What happens if a P45 shows the wrong tax code?
The new employer should use the tax code shown on the P45 to set up the employee’s payroll record. If the employee believes the code is wrong, they should contact HMRC to request a correction. The new employer should not change the tax code unless they receive a new P9 coding notice from HMRC.
Further Reading
- Starter Checklists (New Employee Without P45) — what to do when a new employee has no P45
- Calculating Final Pay (Leavers) — how to work out the final payment before issuing the P45
- P60 Explained — the year-end equivalent of the P45
- Full Payment Submission (FPS) — how leaver information is reported to HMRC
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Sources
- P45: employee leaving work — GOV.UK
- Running payroll: employees leaving — GOV.UK
- PAYE and payroll for employers — GOV.UK