In this section:
- Tax for the employed
- Tax for the self-employed
- Work out if you're employed or self-employed
- Starting your first job: what to do about tax
- Tax on casual, part-time or temporary work
- PAYE forms: P45, P46, P60, P11D
- Tax on company cars and other benefits
- Tax on employee share schemes
- Tax on tips and bonuses
- Tax when employing people in your home
Starting your first job: what to do about tax
When you become an employee your employer is responsible for deducting Income Tax and National Insurance from your salary before you receive it. This system is called PAYE (Pay As You Earn). You'll get paperwork relating to PAYE from us and your employer.
Payslips
Each payday, your employer should give you a payslip. It is a receipt for the tax you've paid, showing details like:
- your earnings before tax - your 'gross pay'
- Income Tax, National Insurance contributions (NICs) and student loan repayments, if relevant, that were deducted from your pay
- your earnings after tax – your ‘net pay’
More about National Insurance from the Directgov website
PAYE Coding Notice
When you start work, HMRC will send you a tax code in a PAYE Coding Notice. They also send it to your employer, who'll use it to work out how much tax to deduct from your pay.
Understanding your PAYE Coding Notice
Emergency tax codes
Your employer may use an emergency tax code until we issue the right one. If you've paid too much tax you will get it back through PAYE.
If you leave your job before you get the right code, or you want to claim tax back for a previous tax year, follow the link below to find out how to get a refund.
Tax refunds and reclaiming overpaid tax
PAYE forms P45, P46 and P60
P45
Form P45 is a record of your pay and tax deductions. You'll get it from your employer when you stop working for them. It shows details like:
- your tax code and PAYE reference number
- your leaving date
- your wages so far in the tax year - 6 April to the following 5 April
- how much tax was deducted from your wages
A P45 has four parts. Your employer sends one part to us and gives you the other three. When you start a new job, you give two parts to your new employer and keep the other one - called Part 1A - for your own records.
P46
If you're starting your first job and don't have a P45, your employer will give you a form P46 to fill in and sign. We will then process your P46 and issue your tax code.
P60
Form P60 is an annual summary of all your payslips. Your employer gives you one at the end of every tax year, if you still work for the employer. You keep your P60 as a record of your pay and the tax that was deducted.
Student loan repayments
If you've got a student loan to repay, it'll happen automatically through PAYE once you start working and earning more than the repayment threshold.
We give your employer the information they need to deduct the right amount from your wages. Your payslip must show how much has been deducted. If you have any queries about your student loan repayments you can contact your Tax Office - look on your PAYE forms for their details or look them up by following the link below.
Keeping records
What records to keep
Keep the paperwork that contains details about your pay and tax, like:
- payslips and PAYE Coding Notices
- P45 and P60 forms
- details of taxable expenses
- 'benefits in kind' forms from your employer - a benefit in kind is something you get for doing your job that isn't money
- information about any redundancy award or termination payment you get when your contract ends
- certificates for any 'Taxed Award Schemes'
- notes of any tips or gratuities you get and any other taxable income or benefits that you haven't already recorded somewhere else
- details of any state benefits you've received
If anyone (other than your employer) gives you benefits in kind for doing your job, you should keep a note of their name and address and what they gave you.
Why keep records?
You will need to refer to your records later if you ever need to:
- complete a Self Assessment tax return
- reclaim overpaid tax
- apply for benefits and tax credits
How long to keep them
We suggest you keep your records for at least 22 months from the end of the tax year they relate to. The tax year runs from 6 April to the following 5 April, so keep paperwork until at least 31 January nearly two years later.
More useful links
Tax when starting, leaving or retiring from work
General advice on looking for work and at work on the DirectGov website
Finding work, job schemes and disabled employee rights - get information on the DirectGov website
Find out about repaying student loans through PAYE - on the DirectGov website
