A P45 and a P60 are two different tax forms that employees in the UK come across quite often. Heres what each form means:
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P45: This is a form that an employer gives to their employee when they leave a job. It's a way of passing tax and payroll information from the old employer to the new employer and the employee for their own tax records. A P45 includes information about how much tax you've paid on your salary so far in the tax year up to the point you left a job. There are four parts to a P45, and you will receive three of them. You can give Parts 2 and 3 to your new employer, or to Jobcentre Plus if you don't have another job lined up. You can keep hold of Part 1A for your own records.
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P60: This form is for continuing employees and it summarises similar employment and tax information for an individual still in employment as at 5 April, the end of the tax year. At the tax year end, employees will have a separate P60 for each current job. So if you have two jobs, you may receive two P60s. A P60 includes a breakdown of an employee's taxable income, taxes paid while employed, and employment history. Your P60 is useful for keeping tabs on your overall earnings and tax, and you might also need to show your P60 when reclaiming overpaid taxes, applying for benefits, doing a self-assessment tax return, or applying for a mortgage or bank loan. Your employer is obliged to give it to you by the end of May each year.
It's important to understand the difference between these two tax forms, as both forms are essential if you want to receive your full entitlements at the end of your employment.
