P45 Form: An Employer's Guide for When Staff Leave

What Is a P45?

Small employers often meet the P45 for the first time when someone hands in their notice. This guide covers what HMRC and GOV.UK expect, what the employee does with each part, and how the final payslip fits in. You can make that final payslip with the PayDocs payslip generator.

A P45 is the leaver's record of pay and tax for the current tax year. GOV.UK says it shows:

• the leaving date
• the total pay and tax from 6 April until the date the employee left
• the tax code
• personal details, including the National Insurance number

It belongs to the employee. They keep one part and pass the rest to their new employer. If they don't start a new job straight away, they should still keep it, because it may be needed later for a new employer or a tax query.

When Must an Employer Give a P45?

When the employee leaves. Timing in practice usually depends on when you run the final payroll, but GOV.UK puts the duty plainly: you must give your employee a P45 when they leave. It applies to every leaver on your payroll, whether they resign, retire or are dismissed.

What You Report to HMRC

When you make the final payment, record the leaving date on your payroll. Your Full Payment Submission (FPS) then tells HMRC the employee has gone. GOV.UK says to make deductions as normal in that FPS.

If you make the final payment in one tax year but the employee's leaving date falls in the next one (on or after 6 April), GOV.UK says not to put the leaving date in the same FPS as the final payment. Include them in your first FPS of the new tax year with their leaving date and zero amounts.

What Are the Parts of a P45?

A paper P45 comes in parts, and each one has a job.

What Are the Parts of a P45?

GOV.UK tells employees that with a paper P45 they only need to give the new employer Parts 2 and 3, and keep Part 1A.

How Do You Produce a P45?

Use your payroll software, in most cases. GOV.UK's employer guide says to use payroll software to produce P45s unless your software cannot do this or you are exempt from filing online.

• If your software cannot produce one, GOV.UK points to HMRC's Basic PAYE Tools.
• If you are exempt from filing online, you can contact HMRC to order paper forms.

PayDocs does not make P45s. The P45 must come from the payroll that reported the employee's pay to HMRC.

How to Handle an Employee Leaving, Step by Step

1. Confirm the last working day in writing.
2. Work out final pay, including any holiday pay owed under the contract.
3. Run the final pay through payroll and deduct tax and National Insurance as normal.
4. Record the leaving date and send the FPS.
5. Produce the P45 from your payroll software or Basic PAYE Tools.
6. Give the employee the final payslip on or before payday.
7. Give the employee their P45.
8. Keep copies with your payroll records.

The Final Payslip

A leaver still gets a payslip for their last pay. It is often the payslip they read most closely. GOV.UK says payslips must be provided on or before payday, and they must show earnings before and after deductions and any deductions that change each time.

The final payslip often carries lines the employee hasn't seen before:

• holiday pay owed for leave not taken
• a part-period of basic pay
• notice pay, if the contract provides it
• the usual Income Tax and National Insurance

Each one deserves its own line. The final payslip and the P45 should agree, because the employee and their next employer may compare them line by line.

A Worked Example of Final Pay

How you pro-rate pay depends on the contract. Some employers divide monthly salary by working days in the month; others use calendar days. Whichever method your contract uses, apply it the same way every time.

Example, using working days: monthly salary £2,100, 21 working days in the month, last day after 10 of them. Basic pay is £2,100 ÷ 21 × 10 = £1,000.00. Three days of untaken holiday at £100.00 a day adds £300.00. Gross final pay: £1,300.00, before Income Tax and National Insurance from payroll.

On the payslip, that becomes two earnings lines (basic pay to the leaving date, and holiday pay), followed by the usual deductions and net pay. A leaver who sees how the figure was reached is far less likely to query it later.

P45 vs P60: What Is the Difference?

A P45 is for leavers; a P60 is for people still working for you at the end of the tax year.

P45 vs P60: What Is the Difference?

Our guide to P60 vs P45 covers both forms in more detail.

What If an Employee Loses Their P45?

There is no replacement P45. GOV.UK tells employees that if they have lost their P45, or their employer says they sent one but they did not get it, they cannot get a replacement. Their new employer uses HMRC's starter checklist instead.

What the New Employer Does

GOV.UK says the new employer takes the employee's name, leaving date, total pay and tax to date, student loan status, National Insurance number and tax code from the P45. If they don't have a P45, the employee completes a starter checklist. The old P46 form is no longer used.

If a new starter hands over two P45s, GOV.UK says to use the one with the latest date and give the other back. If both have the same leaving date, use the one with the highest tax-free allowance (or the least additional pay for a K code).

Paying Someone After You Gave Their P45

Use tax code 0T on a week 1 or month 1 basis. GOV.UK says that if you have to pay an employee after they leave, use that code and report the payment in your next FPS with the original leaving date. You must not give the employee another P45.

P45 Rules Across the UK

The P45 is an HMRC form, so the same process applies across the UK. A café in Manchester, a builder in Cardiff and a family in Edinburgh employing a nanny all follow the same steps through payroll.

What may differ is everything around the form. Notice periods, holiday entitlement and any contractual pay generally come from the employment contract and employment law, and ACAS publishes plain guidance on those. If you are unsure what final pay an employee is owed, check the contract first and get advice before the last payday rather than after it.

Why Use PayDocs for a Leaver's Final Payslip?

PayDocs makes the final payslip clear when your payroll tool doesn't.

• Add holiday pay, part-period pay and notice pay as separate lines.
• PAYE and National Insurance are worked out where our 2026/27 rules are reviewed; the generator lists what it covers.
• Edit any line to match your payroll record and the P45.
• Preview free, and pay only for the finished PDF.

This matters most for small employers and household employers whose payroll setup reports to HMRC correctly but prints little or nothing the employee can read. PayDocs does not produce P45s or file with HMRC.

Tips Before an Employee's Last Day

• Agree the leaving date in writing.
• Count untaken holiday before the final payroll run.
• Check the tax code on file matches the last FPS.
• Make sure the final payslip totals agree with the P45.
• Ask for the employee's forwarding address for anything posted later.
• Tell the employee when the final payslip and the P45 will arrive, so they can plan for their next job.
• Keep a copy of the final payslip with your payroll records for that tax year.
• If a payment turns up after the P45 has gone, follow the 0T rule above rather than starting again.

Common Mistakes to Avoid

• Forgetting to put the leaving date on the final FPS.
• Issuing a second P45 for a later payment.
• Leaving holiday pay out of final pay.
• Final payslip figures that don't match the P45.
• Producing the P45 before the final pay goes through payroll, so its totals may miss the last payment.

Keep Records Accurate

A payslip must match what you paid and reported to HMRC. Changing one to mislead a lender, landlord or agency is fraud, and PayDocs documents are never proof of income.

Final Takeaway

The P45 comes from your payroll, the final payslip comes from your payroll figures, and both should tell the same story. Report the leaving date, give the P45, and make the last payslip as clear as the first.

Questions

Sources

• GOV.UK — Employee leaving
• GOV.UK — Your P45, P60 and P11D form: P45
• GOV.UK — Your P45, P60 and P11D form: P60
• GOV.UK — Getting P45, P60 and other forms: employers
• GOV.UK — Tell HMRC about a new employee: get employee information
• GOV.UK — Payslips: employee rights

Official sources checked 3 October 2026. This guide explains how pay documents work; it is not tax or legal advice.