How to Read Your Annual P60 Statement
Your P60 is your official annual tax statement. It shows exactly how much you earned, what tax and National Insurance you paid, and any pension contributions deducted from your pay. If a mortgage lender, accountant, or HMRC asks you to read your annual statement, a P60 is what they're after. This guide walks you through every box so you know what each number means and why it matters.
What Is a P60?
A P60 is a form your employer issues at the end of the tax year (5 April) that summarises your earnings and tax paid. You get one if you were employed on 5 April, the last day of the UK tax year. Unlike a payslip, which shows a single month's deductions, a P60 covers the whole 12 months. It's the authoritative record of your pay — HMRC uses it to cross-check your tax return.
If you worked for more than one employer in the tax year, you'll receive a P60 from each. If you left a job mid-year, you get a P45 instead (and you'll need to understand that too when changing jobs).
The P60 has 14 boxes. Most won't apply to you, but the key ones — gross pay, tax paid, National Insurance, and pension contributions — matter for tax returns, mortgage applications, and catching errors in your payroll.
How to Read Your P60: Box by Box
Box 1a: Taxable pay to date
This is your gross salary minus any salary sacrifice (cycle to work, childcare vouchers, electric car schemes) but before tax. If you earned £35,000 gross and salary-sacrificed £2,000 for an electric car scheme, Box 1a shows £33,000. Salary sacrifice is good — it reduces your tax bill.
Box 1b: Net pay to date
This is your take-home pay after income tax, National Insurance, and other statutory deductions. It's not the same as your payslip take-home because it's a full-year figure.
Box 2: Total tax to date
The total income tax deducted over the year. On a £35,000 salary, this is roughly £2,864 (because the first £12,570 is tax-free, then 20% on the rest). Sum the tax from all your payslips and compare to this box — they should match.
Check current tax rates on gov.uk.
Box 3: Total NI contributions to date
National Insurance at 8% on earnings between roughly £175/week and £967/week (or £50,270 per year). On £35,000, that's about £1,800. If you're over 67 or below 21, the rate is different.
Find your exact rate on gov.uk.
Boxes 4–6: Student loan and repayment amounts
If you have outstanding student debt, Box 4 shows the amount deducted in the tax year. Plan 2 loans are 9% of earnings above £27,295. So on £35,000, that's £693/year (about £58/month). On £50,000, it jumps to £2,032/year — the figure creeps up as you earn more.
Check your student loan repayment on gov.uk.
Boxes 7–8: Pension contributions
Box 7 shows workplace pension contributions deducted from your payslip. Box 8 shows "relief at source" — the extra 20% basic-rate tax relief your pension scheme claims back if you're in a personal pension or SIPP. A worked example: you contribute £100/month (£1,200/year) to a personal pension. Your scheme claims 20% relief, so £1,500 actually goes in. Box 8 will show £300 (the relief). That's tax relief doing the heavy lifting.
Box 10: Benefits-in-kind value
Company car, private health, gym membership, or other non-cash benefits. These are taxable at a formulaic value — a company car might be worth £5,000 in Box 10 even if you barely use it. It's added to your taxable income.
Box 13: Total gross pay YTD
The total of all earnings — salary, overtime, bonuses, benefits-in-kind, statutory pay. This is your "real" gross for tax purposes.
Reconciling Your P60 With Your Payslips
Your P60 should match the sum of every payslip you received in the year. If it doesn't, investigate immediately.
Step 1: Add up gross pay from all payslips
Sum the gross pay from each monthly (or weekly) payslip across April 2025 to April 2026. This should match Box 13 on your P60. If your salary changed during the year, you'll see it in the payslips — P60 Box 13 will reflect the total.
Step 2: Check total tax against Box 2
Add the tax from each payslip. This should match Box 2. Small differences (a few pounds) are normal due to rounding, but anything over £20 warrants a call to payroll.
Step 3: Check National Insurance against Box 3
Same check for NI. If you changed jobs mid-year, NI might be odd because contributions reset with each employer.
Step 4: Verify pension contributions against Box 7
Add up your contributions. The P60 Box 7 should match. Read our payslip guide for help matching individual slips to the annual total.
Why Your P60 Matters
Tax returns: If you're self-employed, a landlord, or have other income, HMRC cross-references your employment income on your P60 against your tax return automatically.
Mortgage applications: Lenders ask for your P60 to verify employment income — it's more reliable than a letter from your employer because it's an official HMRC document. Most lenders want 2–3 years of P60s. See how lenders calculate affordability.
ISA and pension planning: Your P60 confirms your exact taxable income, which affects how much you can contribute. ISA allowance is £20,000/year regardless of income; pension annual allowance is £60,000.
Spotting tax errors: A P60 might reveal you were on the wrong tax code all year, or that relief you're entitled to wasn't applied. Tax codes are issued by HMRC but run by your employer — mistakes happen. A P60 is your starting point for a claim.
Verifying pay rises: If you received a pay rise mid-year, your P60 shows when it took effect (gross pay will increase). Useful for checking your employer kept their promise.
Using Your P60: Common Scenarios
Switching jobs mid-year
You'll receive a P60 from your old employer and a P45 from your new employer. Your new employer uses the P45 to set your tax code. Keep both documents — you'll need them for tax returns or mortgage applications.
Checking a tax refund claim
If you think you paid too much tax, the P60 is your evidence. Use our salary calculator with your exact P60 figures and compare it to what you actually received. If there's a gap larger than your emergency tax adjustment, you might be owed a rebate.
Proving income for a loan or overdraft
Lenders ask for recent P60s (2 years minimum) to verify employment income. Compare salary offers by plugging them into the calculator to see which actually pays more after tax.
Converting hourly work to annual income
If you're negotiating a new contract or moving from hourly to salaried, our hourly-to-annual calculator helps you compare offers fairly.
Frequently Asked Questions
Q: When do I get my P60?
A: Your employer must give you a P60 by 31 May after the end of the tax year. For the 2025–26 tax year (6 April 2025 – 5 April 2026), you'll get it by 31 May 2026. If you didn't receive one by early June, chase payroll — they might email it.
Q: What if my P60 is wrong?
A: Ask your payroll team to correct it immediately. They'll issue a revised P60 (marked as a correction). Keep both versions. If your employer is unresponsive, report it to HMRC, but it's easier to sort directly.
Q: Do I need to keep my P60s?
A: Yes, keep them for at least 5 years (HMRC's record-keeping limit). Mortgage lenders often ask for 2–3 recent P60s, and they're useful for spotting income trends.
Q: What's the difference between a P60 and a P45?
A: A P60 is an end-of-year form issued to employees still employed on 5 April. A P45 is issued when you leave a job, showing earnings and tax paid up to your last day. You give the P45 to your new employer to set tax codes.
Q: Can I use my P60 to apply for a mortgage?
A: Yes. Lenders almost always ask for 2–3 recent P60s to verify employment income. It's your most reliable proof as an employee. Self-employed people use tax returns instead.
Q: Why is Box 1a smaller than my payslip gross?
A: If you use salary sacrifice schemes (electric car, childcare, pension), Box 1a is reduced by those amounts. This is good — it lowers your tax bill.
Q: What if I worked for two employers?
A: You'll receive one P60 from each. Add them together for your total tax liability. This matters if combined earnings push you above £50,270 into the higher rate band.
Q: How does my P60 relate to my tax code?
A: Your tax code tells your employer how much to deduct. Your P60 shows what actually happened. If you're on the wrong code all year, your P60 total tax might be too high or too low — a mismatch signals a code error worth claiming back.