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Statutory payments

From time to time your employees may have absences from work due to sickness, maternity, paternity or adoption leave.  As an employer you must first determine if your employees qualify for the appropriate statutory payment to cover their absence, and then make the appropriate payment to them.

You can only reclaim some of these statutory payments from HM Revenue & Customs (HMRC).  This is done by reducing the amount of Pay As You Earn (PAYE) tax and National Insurance liabilities you pay to HMRC.

Advanced funding can be requested from HMRC for some of these statutory payments if your PAYE liabilities are too low to recover the statutory payment being made.  This is particularly useful when paying maternity pay.

Statutory Sick Pay (SSP)

SSP is paid to an employee who has been off sick for four or more consecutive working days and has earned the appropriate amount of wages in the eight weeks prior to their sickness to qualify.  SSP is paid for a maximum of 28 weeks.

Statutory Maternity Pay (SMP) and Statutory Adoption Pay (SAP)

Maternity (or adoption) pay is paid to mothers (or adopters) at a rate of 90% of their earnings for the first six weeks.  Following these first six weeks SMP/SAP is paid for up to 33 weeks and if their earnings are lower the amount remains at 90% of their earnings.

Statutory Paternity Pay (SPP)

SPP can be claimed by a partner for one or two consecutive weeks.  Again to qualify, their earnings and length of service must meet the criteria.

Maternity or adoption leave can now be shared with fathers or partners and is called Additional Statutory Paternity Pay (ASPP).  To receive SMP, SAP or ASPP employees must have on average the appropriate amount of wages at the qualifying week and have been employed 41 weeks before the birth or adoption.

Depending on your annual gross National Insurance contributions, either 92% or the full amount of SMP, SAP or ASPP can be reclaimed together with compensation of 3%.

Shared Parental Leave (SPL) or Shared Parental Pay (ShPP)

Both parents can now share SMP as long as they are both eligible.

SPL and ShPP must be taken between the birth of the baby and its first birthday (or within one year of adoption).  This statutory entitlement allows both parents to share the statutory 39 week allowance.

For the current rates of statutory payments or to check if your employees qualify, please contact us.