Understand your P60 form – a UK tax form created by HMRC, and filled out by employers and issued to their employees. Find out the meaning of a P60 form, when it shows and see a sample one.
Friendly Disclaimer: Whilst I am an accountant, I’m not your accountant. The information in this article is legally correct but it is for guidance and information purposes only. Everyone’s situation is different and unique so you’ll need to use your own best judgement when applying the advice that I give to your situation. If you are unsure or have a question be sure to contact a qualified professional because mistakes can result in penalties.
1. What is a P60 and What Does it Show?
A P60 shows an overview of everything you have been paid by your employer (often called your gross income). It also includes any deductions they have made during one complete tax year**. For that reason, it is also known as an End of Year Certificate. It also details any other statutory deductions made such as statutory maternity pay and student loan repayments.
**The tax year runs from 6 April to 5 April.
In effect, your P60 is really a summary of everything you have been paid and the income tax you’ve paid that your employer calculated for you on your behalf for a 12 month period. So If you’ve been in your job for the full tax year, you can probably add up gross income on your payslip and you’ll reach the same number on your form.
If you started your job part way through the year and gave your new employer a P45 when you started, then your gross pay and tax deducted from your previous employment may appear on this form also.
Your P60 is highly confidential. The form contains not just your personal details but also it contains an annual tax summary about your gross income. For that reason keep it safe and only share it if you are totally sure that the information will not be shared.
2. When Do You Get a P60?
UK Employers are legally required to issue P60 forms to all their employees by 31 May each year as part of the PAYE process. So, your P60 for the tax year ended 6 April 2021 should be given to you by 31 May 2021.
If you left your employment after the tax ended you should still get a P60. That’s because your employer still needs to give you all the information about your pay for any complete tax years you worked for them.
If you changed jobs part way through a tax year, then you’ll only receive one P60 from your current employer. Information about your previous pay should be included on your P60. This is provided you gave them your P45 when you started work.
Karan changed jobs in the tax year 2021/2022. From 6 April 2021 to 30 November 2021, she worked for Company A but from 1 January 2022 she started work at Company B.
When Karan left Company A, she received a P45 which shows her personal details, tax code as well as the total amount of income tax and National Insurance deductions made from 6 April 2021 to 30 November 2021. When Karan started her new job at Company B, she will have handed them her P45 which will give her new employer sufficient details to ensure the correct deductions are made from her salary from 1 January 2022.
Then, once the tax year has ended on 5 April 2022, she should expect Company B to issue her a P60 form by 31 May 2022. This will summarise all the tax and National Insurance they have deducted from her gross income. There is also a box that will show the Gross Pay and Income Tax deducted when she worked for Company A on the P60 form. As a result, Karan will be able to see the total tax she has paid for the entire tax year.
3. What Does a P60 Look Like?
The P60 form itself is created by HMRC. However, your employer is responsible for filling it in and issuing it since they handle all your taxes on your behalf and have all the information required.
HMRC has several different formats that an employer can use when they need to complete P60s. But, despite any differences in colours or orientation, all versions of the form contain the same sections. They can also be issued on paper or (more common now) by email.
Here is an example P60 form:
4. P60 Explained
The P60 form is made of different sections to help summarise important tax and salary information succinctly and in an easy to understand way. Here’s the meaning of each of the boxes on the P60 to help you read yours:
- Employee details: Your personal information such as National Insurance number and full name;
- Gross Income and Income Tax: a summary of the total amount you’ve been paid before tax and income tax deducted from it;
- National Insurance deductions: a summary of how much has been deducted from your pay along with a breakdown of the amounts across your different pay levels;
- Statutory payments: details of any statutory payments that you were entitled to such as maternity, paternity and adoption pay;
- Other details: if there is any other information you need to know about it will be included here, as well as any student loan deductions made;
- Employer details: your employers’ name and address so you know who issued it.
5. What is a P60 Form Used For?
Apart from being a legal requirement for your employer, there are some other uses for a P60. Therefore, you may want to keep hold of it safely.
5.1 To Claim Back Overpaid Tax
Your P60 is official evidence of the tax and national contributions you have made through a tax year. If you do find yourself in a situation where you have overpaid tax, you’ll need to use your P60 to prove what you have paid.
5.2 Proof of Gross Income
Holding onto your P60 forms may become useful if you need to prove your income. For example, if you are applying for a loan or mortgage.
5.3 To Apply for Tax Credits
If you need to claim tax credits or other state benefits, you will be asked to provide a copy of your P60 form. This is evidence of your earnings.
5.4 To Complete your Tax Return
If you need to complete a tax return because you are registered for self assessment, then you’ll need the information on your P60.
When the time comes to fill in your tax return, you’ll need to give HMRC a complete picture of your income. This should include declaring your pay from employment. You’ll do this by filling in the Employment Section using the information provided on your P60.
Your P60 form is an important piece of information so keep hold of it. Read this guide if you’ve lost your P60.
6. How Long Should You Keep Your P60?
There are no legal rules on how long you should keep your P60. However, I would recommend you keep hold of at least 3 years. That’s because if you apply for a mortgage or a loan, lenders commonly can ask for up to 3 years of income history.
7. What Does R Mean on a P60?
R indicates that you have received a tax refund that your employer has passed onto you. If there is no R then you have paid tax.
8. Do you get a P60 if You Are Self-Employed?
If you are employed and self-employed, then you should get a P60 from your employer. The information on your P60 only relates to what your employer has paid you and deducted, not your self-employment business income because they do not have that information.
When the time comes to fill in your tax return, you’ll need to give HMRC a complete picture of your income. This should include declaring your pay from employment as well as your business. You’ll declare money earned from your job by filling in the Employment Section using the information provided on your P60.
9. Does a P60 include Pension Contribution Deductions?
No, pension deductions are not shown on your P60. That’s because your P60 shows your taxable pay for the year. Taxable pay means your gross salary plus any additional amounts you received, minus pension contributions.
10. Do You Get a P60 for Your State Pension
No. It is your own responsibility to keep your own records of the state pension you have received.
11. Do You Get a P60 When You’re the Director of a Limited Company?
Many self-employed individuals operate through a Limited Company paying themselves through a payroll scheme. If you’ve registered as an employer you’ll be both employer and employee. That means as an employer you’ll be legally required to issue everyone on your payroll with a P60 form, including yourself by 31 May each year.
12. Should I Receive a P60 while Claiming Job Seekers Allowance?
Job Seekers Allowance is paid under a PAYE scheme. It’s almost like the Benefits Office is your employer and your JSA is your salary. If you are unemployed, your benefits office should issue you a P60 by the 19 May each year, unless you’ve found a job during a particular tax year.
If you have found a job, the benefits o