Employers will be able to issue P60s in electronic form from the end of the coming tax year, 2010/11.
HM Revenue and Customs (HMRC) has changed the PAYE rules to allow employers to make use of eP60s instead of a paper version.
Under the current rules, employers must supply a paper P60 for every employee as of 5 April for each year.
The change does not mean that employers must issue an electronic P60; rather that there will be a choice between the paper and electronic versions.
Karen Thomson, associate director of policy, research and strategic visibility at the Institute of Payroll Professionals, said: “One of the main advantages of eP60s is the decreased burden on the payroll department in reissuing duplicate P60s when requested by employees.
“With an increasing number of employers now using epayslips, it seems only appropriate that organisations are permitted to move on from paper to eP60s.”
Ms Thomson added: “It is also worth mentioning that employers should establish an agreement with their staff before insisting on eP60s as well as ensuring all employees have access to their P60s.”
P60s are a summary of an employee’s pay and the tax that has been deducted from it in the tax year.
Employers provide employees with P60s to keep as a record at the end of every tax year.