When you take on a new employee you’ll need to have a P45 form from their previous employer – the P60 is a year-end summary of their pay, tax and benefits, and won’t give you their correct pay/tax details to date.
Their P45 will tell you:
- The person’s full name
- The date they left their last job
- Total pay and tax paid to date for the current tax year
- Their student loan deduction status
- Their National Insurance number
- Their existing tax code
You’ll need all this information to set them up in your payroll software. Key these details into your payroll system and your new employee will then be on the right tax code and paying the right amount of income tax and NI.
NOTE: You CAN pay a new employee before getting their P45. They’ll need to be set up on the emergency tax code of 1100L (changing to 1150L in April 2017) and any adjustments to their code/tax can be made once you’ve received their P45 form.
If you need any help setting up new employees in your payroll system, give us a call on 01454 300 999, or drop an email to info@fd-works.co.uk
Find out more about the FD Works’ approach to finance at fd-works.co.uk