If you have ever had a job, then the chances are you will have received payslips. Have you ever wondered how long you should keep your payslips? This article has some answers.
What is a payslip?
A payslip is a note given to an employee each time they are paid. You will receive a payslip for each pay period depending on the frequency of payments. So if you are paid every month, you should get 12 payslips every year.
At the end of the financial year, you will also receive a P60. This an end of year certificate which summarises your annual salary paid to you by your employer. It also shows tax and National Insurance contributions paid to HMRC.
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Why should I keep my payslips?
There are a number of reasons why you should keep your payslips. The main ones are as follows:
Tax returns
If you have more than one job you may need to file a self-assessment tax return every financial year. Your payslips contain information that you will need to complete your tax returns.
Payment problems
This could be anything from a mistake in your salary to paying too much tax. Your payslip is the most effective proof of what payments have been made.
Proof of pension deductions
Your payslip is the main proof of your pension contributions. If there are any discrepancies, checking your payslips could prevent you from receiving less than you contributed.
Applying for a financial product
If you are applying for a credit card, mortgage or bank loan, the lender will want proof of income. It’s not uncommon for a lender to ask for your last three payslips.
Renting a property
If you want to rent a property, the landlord will need proof that you are able to pay the rent. As well as a letter from your employer, landlords and letting agents typically ask for your last three to six months’ payslips.
Visa applications for overseas travel
Some countries require proof of earnings in the form of recent payslips before you visit, even if it’s for a couple of months.
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How long should I keep my payslips?
According to HMRC, you should keep your payslips for as long as 22 months after the end of the tax year. So for example, if they were issued in the tax year 2020/21, they should be kept until February 2023.
You should also keep your P60s for at least two years, but it’s a good idea to keep them for up to six years. There are often situations when you may need them as proof of taxes paid. For example, you can claim specific tax credits up to six years after the tax was paid.
Ideally, consider keeping payslips for 22 months after the end of the tax year and P60s for six years. You can discard any that fall outside these cut off points.
Take home
Make sure you dispose of any old payslips responsibly to prevent possible fraud or identity theft.
If you want to know more about the information that should be on your payslip, then check out our article on understanding your payslip.
