What is a P60?

What is a P60 for?

It is the employee's proof of what they earned and what was deducted in the year. Anyone applying for a mortgage, claiming a tax refund, completing a Self Assessment return or checking they have paid the right tax will be asked for it. It is one page, and it is the one payroll document worth keeping for years.

It goes only to people still on the payroll at the end of the tax year. Someone who left in January gets a P45 at the time and no P60; their year-to-date figures went with them. Someone with two jobs at once gets a P60 from each employer, each covering only that job.

Like the P45, it is not something anyone types up. Payroll software totals the year's payslips, and once the final submission for the year has been made the P60 is produced from those totals. The deadline for handing it over is 31 May following the tax year end, which has been the rule for as long as most payroll clerks can remember.

A worked example

A florist employs one full-time assistant paid £2,100 a month throughout the tax year. Her twelve payslips show gross pay totalling £25,200. If each payslip showed £210 of income tax and £110 of employee National Insurance, the P60 shows £2,520 tax and £1,320 National Insurance for the year, alongside the gross pay, her final tax code, the employer's PAYE reference and her National Insurance number.

Bizzle runs the payroll per payslip and files the real-time submission each pay day, so at year end the P60 is a matter of producing it, not compiling it. The assistant gets hers as a PDF before the end of May; the florist keeps a copy with the payroll records.

Two years later the assistant applies for a mortgage. The lender asks for the last two P60s. She has them. That is the whole point.

What is on a P60?

• —Employee name, National Insurance number and works or payroll number.
• —Total pay for the year in this employment, and pay from any previous employment in the same year if a P45 was handed in.
• —Total income tax deducted, and the final tax code.
• —National Insurance contributions by category letter.
• —Statutory payments received during the year, such as maternity or sick pay.
• —Student loan deductions, if any.
• —The employer's name, address and PAYE reference.