P60 Form Explained

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A P60 is a tax form issued by employers to employees after the end of the tax year on April 5th. It details your gross income (salary before tax), the total income tax and National Insurance contributions deducted, and any adjustments for statutory payments like maternity pay and student loan repayments.

Note: The tax year runs from April 6th to April 5th of the following year.

P60s are sometimes referred to as ‘end of year certificates’ because they summarize your income and deductions for the entire tax year.

If you worked for the full tax year with the same employer, your P60 will reflect the totals from your payslips. However, if you changed jobs partway through the year and provided your P45 to your new employer, your P60 will include income details from all your previous employment for that tax year.

When Will You Receive Your P60?

Employers must issue P60s to all employees who were on their payroll on April 5th. This is a legal requirement, and P60s must be issued by May 31st. For example, P60s for the tax year ending April 5th, 2023, should be issued by May 31st, 2023.

If you left your job after the tax year ended, you will still receive a P60 from your former employer because you were on their payroll at the end of the tax year.

P60 vs. P45

A P45 is given when you leave a job, detailing your income up to your departure date. A P60, on the other hand, is issued to all employees who were employed on the last day of the tax year, regardless of whether they have left the company or not.

Example:
Karan worked for Company A until November 30, 2022, and then joined Company B on January 1, 2023. She received a P45 from Company A and handed it to Company B. After the tax year ended on April 5, 2023, Karan will receive a P60 from Company B, summarizing her income and deductions from both Company A and Company B for the 2022-23 tax year.

What Does a P60 Look Like?

The P60 form, created by HMRC but completed by employers, may vary in format, but all forms contain similar sections:

Employee Details: Your personal information, such as National Insurance number and name.
Gross Income and Income Tax: Total income tax deducted from your salary.
National Insurance Deductions: Breakdown of National Insurance contributions.
Statutory Payments: Adjustments for statutory payments like maternity or paternity pay.
Other Details: Any additional information, such as student loan deductions.
Employer Details: Name and address of the employer issuing the P60.

Uses for a P60 Form

A P60 serves as evidence of your income for the previous tax year and can be useful for:

Claiming a tax refund.
Proving income for loans or mortgages.
Applying for tax credits or state benefits.
Filling out your self-assessment tax return.

P60 Marked R: If your P60 is marked with an ‘R’, it indicates that a tax refund has been processed and passed on by the employer.

P60 and Self-Employment

If you are both employed and self-employed, you will receive a P60 from your employer, which only covers employment income. You’ll need to include these figures in the Employment Section of your tax return.

If you are fully self-employed, you won’t receive a P60. Instead, you will declare your income directly on your tax return.

Pension Contributions and P60

Pension contributions are not shown on a P60. The P60 displays your taxable pay, which is your gross income minus any pension contributions.

State Pension

You do not receive a P60 for state pension income. You are responsible for keeping records of your state pension payments.

Directors of Limited Companies

If you operate through a Limited Company and pay yourself a salary via a payroll scheme, you must issue yourself a P60 as part of your responsibilities as an employer.

Job Seekers Allowance

If you receive Job Seekers Allowance (JSA), you’ll get a P60 from the Benefits Office, as JSA is paid through the PAYE system. When you start a new job, you’ll receive a P45 from the Benefits Office to give to your new employer, ensuring you’re placed on the correct tax code.