Understanding Your P60: What It Is and Why It Matters
Every employer in the UK has a legal duty to give each employee still on their payroll at 5 April a P60 by 31 May, summarising their pay and deductions for the tax year just ended. With that deadline now approaching, it's a good moment to look at what a P60 actually contains, why it matters more than many people realise, and what's worth double-checking once it lands.
What a P60 Actually Shows
A P60 is a summary of an employee's total pay and the tax, National Insurance and any student loan deductions taken from it across the full tax year, from 6 April to the following 5 April. It also shows any statutory payments received, such as Statutory Sick Pay or Statutory Maternity Pay, and confirms the tax code that was in use at the end of the year. Crucially, a P60 only covers employment you were in at 5 April - if you left a job earlier in the tax year, you'd have received a P45 at that point instead, and any earlier employment in the same tax year wouldn't appear on your P60 at all.
Why It Matters More Than a Filing Cabinet Document
It's tempting to treat a P60 as just another piece of paperwork to file away, but it serves several genuinely important purposes. It's the primary evidence of your income and tax paid for the year, and you'll likely be asked for it when applying for a mortgage, a loan, or certain types of insurance. If you're claiming a tax refund, completing a Self-Assessment return, or querying your tax code with HMRC, your P60 is usually the first document you'll need to hand.
It's also your best opportunity to catch a payroll error before it compounds. Because a P60 summarises a full year of deductions in one place, it's often far easier to spot something that looks wrong - an incorrect tax code applied for months, National Insurance calculated on the wrong basis - than it would be looking at individual payslips throughout the year.
What Employees Should Check
When your P60 arrives, it's worth taking a few minutes to check it properly rather than filing it away unread. Compare the total pay and tax figures against your own records or your final payslip of the year - they should match. Check that your tax code looks right for your circumstances, and that your National Insurance number and personal details are correct, since errors here can cause complications later. If you had more than one job during the year, or moved employers partway through, make sure you understand which income is and isn't reflected on this particular P60.
What Employers Need to Get Right
For employers, the obligation is straightforward in principle but worth taking seriously: every employee on your payroll at the end of the tax year needs a P60, whether as a printed document or, increasingly commonly, a secure digital copy through payroll software or an employee portal. The 31 May deadline is a hard one, and there's no grace period built in - if your payroll software generates these automatically, it's still worth checking that every current employee has actually received theirs, rather than assuming the process has run correctly without confirmation.
It's also worth using this as a prompt to review your own payroll records for the year now closed, checking that year-end figures reconcile properly before they're needed for other purposes, such as your annual accounts or an HMRC query.
Getting P60s out accurately and on time is one of those jobs that's easy to overlook until it becomes a problem. We can manage your payroll year end process from start to finish. Find out more about Longleys Accounting Services.
What to Do If Something Looks Wrong
If you spot a discrepancy on your P60, don't assume it will sort itself out. Speak to your employer's payroll team first, since many issues turn out to be simple recording errors that can be corrected quickly. If the issue relates to your tax code specifically, or you believe you've overpaid or underpaid tax as a result, HMRC can usually adjust this once the error is confirmed, sometimes resulting in a refund or an adjustment to your tax code going forward.
Keep It Somewhere Safe
Because a P60 is often needed well after the tax year it relates to - for a mortgage application years down the line, for example - it's worth keeping digital or physical copies somewhere secure and easy to find, rather than relying on being able to request a replacement later. HMRC doesn't issue duplicate P60s directly; if you lose one, you'd need to ask your employer, or former employer, for a replacement, which isn't always straightforward once time has passed.
If you have any questions about your P60, your tax code, or your wider tax position for the year, we're always happy to help make sense of it.