P60 Explained: What is a P60 and the Benefits of an Electronic P60
The deadline for issuing P60s is fast approaching. All employers are legally obliged to issue P60s to employees by 31 May. So, we’ve summarised what a P60 is, what’s on a P60 and the benefits of an electronic P60.
What’s a P60?
A P60 (also known as an End of Year Certificate) is an annual statement issued to employees by their employer. It outlines the tax and national insurance (NI) contributions employees have paid over the previous tax year.
As an employer, you’re legally obliged to issue P60s to employees by 31 May at the latest.
You’re not required to issue P60s to employees who have left your business during the tax year. This is because all the necessary information would have been included on the P45.
Employers who fail to issue a P60 by the deadline of the 31 May could face hefty fines from HMRC. The initial penalty for late issuing is £300 which is followed by an additional fine of £60 per day for each day that you fail to issue the P60.
What’s on a P60?
- Employee name
- National insurance number
- Gross pay
- Tax paid
- National insurance contributions from current employment
- Statutory pay
- Student loan deductions
Benefits of an Electronic P60
A P60 can be issued in either an electronic or paper format. However, there are several benefits of issuing P60s electronically. In a world of mobile phones, tablets, laptops and an app for everything – it’s time to consider going paperless for the following reasons.
Your payroll provision can affect your ability to attract and retain the best people. How your employees interact with their pay-related details should be quick and easy. Accessing P60s, payslips, checking leave balances, updating personal details. People expect to be able to do this stuff anywhere, on any device.
P60s are requested as proof of earnings when applying for a mortgage, property rental, loan or even tax credits, and should be kept in a safe place. They may also be requested by HMRC for self-assessments. So rather than rummaging through their kitchen drawers, employees expect to be able to access their P60 online via any device.
Electronic P60s can be accessed securely, online 24 hours a day, seven days a week. In addition, it reduces the risk of confidential pay information being left on a desk in the office for others to read.
At Moorepay, all sensitive data is stored securely in UK data centres, removing any risk and keeping your employees’ information safe and secure.
We know what you’re thinking. Paper – in the grand scheme of things – doesn’t cost much. But it’s not just the cost of each sheet. It’s the cost of printing, storage, postage – and the time taken to do all of this.
If you’re still printing payslips and P60s, that’s a lot of paper and printing, every month. Switching to electronic P60s means they take a fraction of the time paper ones do to distribute – and it’s a cost saving for your business.
What if an employee has lost their P60?
Clearly this isn’t an issue if P60s are stored securely online.
However, if you issue paper based P60s and an employee has mislaid it, you can provide them with a ‘statement of earnings’ on company headed paper that details the same information as a P60.
How can I move to electronic P60s?
At Moorepay, electronic P60s are available via our cloud-based software that’s available any time, on any device, with no time-consuming installations. Through our employee self-service module, employees are given access via a secure web-based login. From there, employees can carry out a wide range of essential tasks, including viewing payslips and P60s.