Skip to main content

Payroll statutory payments

Lucy Cohen
Updated

Statutory payments explained

Statutory payments are payments that employers are legally required to make to eligible employees in certain situations, such as sickness or maternity leave.

These payments are processed through payroll and must be reported to HMRC in the usual way.

The most common statutory payments are:

  • Statutory Sick Pay

  • Statutory Maternity Pay

  • Statutory Paternity Pay

  • Statutory Adoption Pay

  • Statutory Parental Bereavement Pay

Each has specific eligibility rules.

Statutory Sick Pay

Statutory Sick Pay, often called SSP, is paid when an employee is off work due to illness.

To qualify, an employee must:

  • Be classed as an employee

  • Earn at least the Lower Earnings Limit

  • Be off sick for at least 4 consecutive days, including non working days

SSP is paid:

  • From the fourth qualifying day of sickness

  • For up to 28 weeks

It is paid at a fixed weekly rate set by the government.

More information is available here:
https://www.gov.uk/statutory-sick-pay

Statutory Maternity Pay

Statutory Maternity Pay, often called SMP, is paid to eligible employees who are taking maternity leave.

To qualify, the employee must:

  • Have worked for you continuously for at least 26 weeks up to the qualifying week

  • Earn at least the Lower Earnings Limit

  • Provide the correct notice and medical evidence

SMP is paid for up to 39 weeks:

  • First 6 weeks at 90 percent of average weekly earnings

  • Remaining 33 weeks at a fixed weekly rate or 90 percent of average weekly earnings if lower

Details are available here:
https://www.gov.uk/maternity-pay-leave

Statutory Paternity Pay

Statutory Paternity Pay, often called SPP, is paid to eligible employees taking paternity leave.

To qualify, the employee must:

  • Meet minimum service requirements

  • Earn at least the Lower Earnings Limit

  • Provide the required notice

SPP is paid at a fixed weekly rate or 90 percent of average weekly earnings if lower, for up to 2 weeks.

More information is available here:
https://www.gov.uk/paternity-pay-leave

Other statutory payments

There are similar rules for:

  • Statutory Adoption Pay

  • Statutory Shared Parental Pay

  • Statutory Parental Bereavement Pay

Each has its own eligibility and notice requirements.

Can employers recover statutory payments?

Most employers can reclaim:

  • 92 percent of Statutory Maternity, Paternity, Adoption, Shared Parental and Parental Bereavement Pay

Small employers may be able to reclaim 103 percent if they qualify for Small Employers’ Relief.

Reclaims are made through payroll reporting to HMRC.

Statutory Sick Pay cannot normally be reclaimed.

Employer responsibilities

As an employer, you must:

  • Check eligibility

  • Keep appropriate records

  • Pay statutory amounts correctly and on time

  • Report payments to HMRC

Employees must provide the required notice and evidence, but the responsibility to calculate and process payment sits with the employer.

Related to