For many years employers have been able to provide employees with electronic payslips but until this new change they have always had to provide employees with a paper version of the end of year form P60.
From 2010/11 employers can now satisfy the requirements of the PAYE regulations electronically, a move that will encourage both employers and employees to have a wider uptake of Epayslips.
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."