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Understanding Your P60: Essential Guide for Employees

Each year brings various tax and payroll documents – monthly payslips track regular earnings, P45s handle job changes, and annual statements help with tax returns.

Among these, the P60 is particularly important. This annual statement proves essential for mortgage applications, confirms your tax position, and serves as the definitive record of your yearly earnings. 

This guide explains exactly what your P60 is for, when you’ll receive it, and how to make the most of this important document.

What is a P60?

Tax years run from April to April, and your P60 acts as the official record that captures your complete earnings and tax position for the entire year, making it one of the most important documents you’ll receive from your employer.

Every employer must issue P60s to their employees – it’s a legal requirement. If you’re employed on the last day of the tax year (5 April), you’ll receive one by the end of May. 

Many employers now issue digital P60s through their payroll systems, though paper versions are still common.

Getting and Understanding Your P60

Your P60 contains several clearly defined sections. At the top, you’ll find your personal information, including your name, National Insurance number, and tax reference. 

Below this, you’ll see your total earnings for the tax year, split into earnings before and after tax deductions.

The tax section shows exactly how much has been deducted through PAYE, while a separate section covers your National Insurance contributions.

You’ll be able to see your tax code and any changes made during the year. Additional sections cover other deductions like student loan repayments or pension contributions.

Using Your P60 or P45 for Self Assessment

When completing Self Assessment, you’ll need to report all income tax you’ve already paid through PAYE. This helps HMRC calculate whether you owe more tax or are due a refund.

Your P60 or P45 provides this information, but the document you use depends on whether you were still employed on April 5th, the last day of the tax year.

Why Does a P45 Matter for Self Assessment?

A P45 is used if you left a job before the tax year ended. Since your employer no longer pays you, they won’t issue a P60 for that job at the end of the tax year. Instead, your P45 acts as the official record of:

  • Your total earnings from that job before you left
  • The tax you paid while working there
  • Your tax code at the time you left

If you had multiple jobs in the same tax year, each employer you left before April 5th should have given you a P45.

Which Document Do You Use?

  • If you were still employed on April 5th → Use your P60 (covers the entire tax year)
  • If you left a job before April 5th → Use your P45 (shows earnings and tax paid up to your leaving date)
  • If you had multiple jobs in the year → You may need both P60s and P45s to report your total income

Learn everything you need to know about P45s in our guide here.

Using P60s for Applications

Mortgage lenders and other financial institutions often request P60s as proof of income.

Most lenders want to see a pattern of earnings over several years, using P60s alongside recent payslips to verify your income.

When using P60s for applications, lenders typically focus on:

  • Your earnings history and stability
  • Regular versus variable income
  • Employment continuity
  • Overall income progression
  • Tax status and consistency

For self-employed applicants or those with mixed income, lenders will instead look at your SA302 tax calculations and tax year overviews from HMRC, usually for the last 2-3 years.

These documents serve the same purpose as P60s, showing your total income and tax paid across all sources.

Keep your documents organised and readily available, and consider seeking professional advice if your income situation is complex or you’ve had multiple employers.

How to Check Your P60 for Errors and What to Do If Something’s Wrong

Your P60 should match your actual earnings and tax paid, but mistakes happen. Even small errors can lead to incorrect tax payments or complications when applying for loans or mortgages. 

Before filing it away, check that your name, National Insurance number, tax code, total earnings, and tax deductions are correct.

If you find a mistake, contact your employer immediately – they are responsible for issuing a corrected P60. 

If the error affects your tax position, you may also need to inform HMRC to ensure your records are accurate. Keeping a copy of both the original and the corrected version can prevent issues down the line.

Claiming a Tax Refund Using Your P60

If you’ve overpaid tax during the year, your P60 is the key document for claiming a refund. 

Common reasons for overpayment include emergency tax codes, changing jobs mid-year, or working multiple roles. 

Start by checking your tax code – an incorrect code often leads to excess deductions. If you believe you’ve overpaid, use HMRC’s online tax refund tool or submit a claim through your Personal Tax Account

Refunds are typically processed within 10 working days for online claims, while postal requests take longer. Keeping track of your tax payments ensures you don’t leave money unclaimed.

How Long Should You Keep Your P60? 

It might be tempting to discard your P60 after checking it, but this document serves as a long-term financial record. 

HMRC states that you should keep it for at least 22 months, but you should file it for 5+ years. 

Your P60 may be required for tax disputes, refund claims, mortgage applications, or verifying past employment. 

A missing P60 can make it difficult to prove your income history, so store it securely.

Get Expert Help from Double Point

At Double Point, we specialise in helping employees manage their tax affairs effectively. 

If you’re unsure about your tax position, our team of chartered accountants will ensure you’re making the most of your allowances and managing your tax position correctly.

Contact Double Point today for a consultation. We’ll help you understand your tax position and make informed decisions about your financial future.

Discover how Double Point can help you with a free consultation.

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