UK HR Term
P45
A P45 is the document an employer issues to an employee when they leave employment. It records pay and tax deducted in the current tax year and is given to the next employer or HMRC.
In plain English
When an employee leaves, the employer issues a P45 — a four-part form (now usually electronic) showing year-to-date pay and tax. It's the bridge between one job and the next: the new employer uses it to apply the correct tax code without putting the employee on emergency tax.
What it contains
- Total pay in the current tax year
- Total tax deducted in the current tax year
- The employee's tax code at leaving
- The PAYE reference of the leaving employer
- The leaving date
The four parts
Originally physical:
- Part 1 went to HMRC
- Part 1A stayed with the employee for their records
- Parts 2 and 3 went to the new employer
Modern PAYE submissions handle Part 1 electronically through Real Time Information (RTI). The employee receives Parts 1A, 2, and 3 — usually consolidated into one document — to give to their next employer.
When it must be issued
There's no statutory deadline, but HMRC expects it "without unreasonable delay." In practice, most employers issue the P45 with the employee's final payslip, on or shortly after their last day.