- \n
- A P45 is issued when an employee leaves your business.<\/li>\n
- You must report the employee’s leaving date to HMRC through your payroll.<\/li>\n
- The P45 shows their leaving date, tax code and pay and tax information.<\/li>\n
- You should normally issue it on the employee’s last day or as soon as possible afterwards.<\/li>\n
- If a new employee does not have a P45, you can use an HMRC starter checklist instead.<\/li>\n
- A P45 is different from a P60, which is issued after the end of the tax year to employees who are still working for you.<\/li>\n<\/ul>\n
For a closer look at everything that you need to do when somebody leaves your organisation, read Factorial’s employee offboarding guide<\/a>.<\/p>\n
\n\n\nDownload your free offboarding checklist now<\/h4>\n \n
- \n
- Key steps for smooth, compliant exits<\/li>\n
- Knowledge transfer & company asset return<\/li>\n
- Exit interview for a final fareware<\/li>\n <\/ul>\n \n \n Download for free <\/a>\n <\/div>\n\n \n
![](\"https:\/\/factorialhr.com\/wp-content\/uploads\/2025\/10\/14100624\/template-static-banner.png\")
\n <\/div>\n <\/div>\n<\/div>\nWhat is a P45?<\/h2>\n
A P45 is an HMRC tax document<\/strong> that you give to an employee when they leave your business. Its official title<\/strong> is “Details of employee leaving work”.<\/p>\n
The form gives a record of important PAYE information<\/strong>, including:<\/p>\n
- \n
- the employee’s leaving date<\/li>\n
- their tax code<\/li>\n
- their pay for the tax year<\/li>\n
- the Income Tax deducted<\/li>\n
- their National Insurance number<\/li>\n<\/ul>\n
The amount of pay and tax cover the period from 6 April to the date the employee leaves<\/strong>. This information helps HMRC keep the employee’s tax records up to date. It can also help their next employer work out the correct tax to deduct from their pay.<\/p>\n
A P45 is part of your wider PAYE responsibilities. For more information on running PAYE, see Factorial’s PAYE guide for employers<\/a>.<\/p>\n
Why is a P45 important?<\/h2>\n
A P45 is important for both you, as the employer, and the employee who is leaving.<\/p>\n
For employers, it helps you:<\/p>\n
- \n
- complete the employee’s payroll record correctly<\/li>\n
- report their departure to HMRC<\/li>\n
- keep accurate PAYE records<\/li>\n
- complete an important part of the offboarding process<\/li>\n<\/ul>\n
For employees, their P45 gives their next employer information they can use to work out the correct tax code<\/a> and PAYE deductions.<\/p>\n
When do you issue a P45?<\/h2>\n
You should issue a P45 when an employee stops working for you.<\/p>\n
This applies whether they leave because they:<\/p>\n
- \n
- resign<\/li>\n
- are dismissed<\/li>\n
- are made redundant<\/li>\n
- reach the end of their employment<\/li>\n
- retire<\/li>\n<\/ul>\n
According to HMRC<\/a>, employers give the employee their P45 on their last day of employment or as soon as possible afterwards.<\/p>\n
In practice, you will normally process the employee’s final pay first. You then report their final pay and leaving information to HMRC before producing the P45. There are special payroll rules in some situations, such as when you continue paying an employee a company pension. You can check the full HMRC guide<\/a> on what to do when an employee leaves for these cases.<\/p>\n
Do you issue a P45 at the end of the tax year?<\/h3>\n
No, a P45 is linked to an employee leaving their job, not to the end of the tax year. If an employee is still working for you on 5 April, they will normally receive a P60 instead.<\/p>\n
You can read more about the difference in Factorial’s guide to P60 forms for employers<\/a>.<\/p>\n
What information is on a P45 form?<\/h2>\n
A P45 contains information about the employee and their PAYE record when they leave.<\/p>\n
The main details include:<\/p>\n
Employee details, such as their name and National Insurance number<\/p>\n
- \n
- Leaving date<\/li>\n
- Employer PAYE reference<\/li>\n
- Tax code in use when they left<\/li>\n
- Total pay to date<\/li>\n
- Total Income Tax to date<\/li>\n
- Pay and tax from this employment<\/li>\n
- Student Loan information, where relevant<\/li>\n
- Payroll number, if used<\/li>\n<\/ul>\n
The form therefore gives the employee and their next employer a useful record of their tax position at the point they left.<\/p>\n
Regarding whether the form shows the employee’s salary, a P45 shows the employee’s pay for tax purposes up to the point they leave, but it does not show their annual contractual salary.<\/p>\n
For example, if someone earning \u00a336,000 per year leaves halfway through a tax year, their P45 will not simply say that their salary was \u00a336,000. It will show the relevant pay actually recorded for PAYE during the tax year up to their leaving date.<\/p>\n
What are the different parts of a P45?<\/h2>\n
A paper P45 has a few different parts. Part 1A<\/strong> is for the employee to keep. Parts 2 and 3<\/strong> can be given to their next employer. If the employee starts claiming certain taxable benefits instead of starting another job, they may give the relevant parts to Jobcentre Plus<\/a>.<\/p>\n
As an employer using Real Time Information<\/a>, you do not normally send a paper Part 1 to HMRC. Instead, you report the employee’s leaving information through your Full Payment Submission<\/a>.<\/p>\n
Your payroll software<\/a> will normally handle the process of preparing and distributing P45 forms for you.<\/p>\n
How to issue a P45 when an employee leaves<\/h2>\n
The P45 should form part of your offboarding process<\/a> and your payroll.<\/p>\n
1. Confirm the employee’s leaving date<\/h3>\n
Make sure you have the correct final working day.<\/p>\n
Add this date to the employee’s payroll record when processing their final pay. HMRC uses the leaving date to update the employee’s PAYE record.<\/p>\n
2. Calculate the employee’s final pay<\/h3>\n
Process everything that needs to be included in the employee’s final payroll.<\/p>\n
Depending on the situation, this might include:<\/p>\n
- \n
- normal salary or wages<\/li>\n
- overtime<\/a><\/li>\n
- bonuses<\/a><\/li>\n
- commission<\/li>\n
- outstanding holiday pay<\/a><\/li>\n
- deductions<\/li>\n
- other payments due on leaving<\/li>\n<\/ul>\n
Make sure the figures are correct before completing the P45. Read our guide on calculating payslips<\/a> if you are unsure of what you need to include.<\/p>\n
3. Report the employee leaving to HMRC<\/h3>\n
Include the employee’s leaving date and final payroll information in your Full Payment Submission.<\/p>\n
HMRC says final pay and leaver information should be sent on or before the day you pay the employee.<\/p>\n
4. Generate the P45<\/h3>\n
Once the final payroll information has been processed, use your payroll software to generate the employee’s P45.<\/p>\n
If your payroll software cannot create a P45, you can use HMRC’s Basic PAYE Tools<\/a>. Employers who are exempt from online payroll reporting can order forms from HMRC.<\/p>\n
5. Give the P45 to the employee<\/h3>\n
Give the employee their P45 when they leave or as soon as possible afterwards.<\/p>\n
Make sure the employee knows how they will receive it, particularly if they lose access to your HR or payroll system after their final day.<\/p>\n
That last point is easy to overlook. If employees normally access payroll documents through an internal employee portal<\/a>, make sure important leaving documents remain accessible or are sent to them before their account is closed.<\/p>\n
- bonuses<\/a><\/li>\n