When an employee leaves your company, you must issue a P45 once the final net pay has been calculated. This is necessary for the following reasons:

1. This provides the Inland Revenue with information about the amount of taxable pay an employee has received and the amount of tax he or she has actually paid so far during the tax year.
2. The new employer is also provided with this information and can ensure that the employee is taxed correctly.
3. It also provides the employee with information on earnings in this employment and on the year so far.
4. It indicates a change of tax district.

The Sample P45 Slip (RPCP45G0) report prepares the relevant data in P45 format for employees who are leaving. In addition, the batch input of this report can be used to update the employees' Tax Data (infotype 0065) records.

Before you can process a P45 for a leaver, you need to ensure that the following have taken place:

• The employee needs to have been recorded as already having left. This means the leaving event must have already been entered in the personnel records.
• There must be a set of payroll results for the payroll period during which the person leaves.