When an employee is off sick or a child arrives, you may be required by law to make a statutory payment, and each one comes with its own eligibility conditions, weekly rate and maximum period. Get any of it wrong and you either underpay a member of staff or overpay and cannot reclaim it. We check eligibility, apply the correct figures for the tax year, work the payment into the pay run, report it to HMRC, and reclaim the recoverable amounts through your Employer Payment Summary. This page explains each statutory payment and how we administer them for you.
What statutory payments are
Statutory payments are amounts you are required by law to pay eligible employees in particular circumstances. The two situations that come up most are sickness and thearrival of a child, whether by birth, adoption or shared parental leave. In each case the law sets out who qualifies, how much they get, and for how long, and the employer has to apply those rules through the payroll.
Two features make statutory payments trickier than they first appear. First, the eligibility conditions are specific: things like average weekly earnings, length of service, and giving the right notice all decide whether someone qualifies, and it is easy to pay someone who does not qualify or refuse someone who does. Second, the rates and periods are set for each tax year and change over time, so last year's figures are not a safe guide. Because statutory pay is treated as earnings, it is also taxed and reported like normal pay, and some of it can bereclaimed from HMRC, which is money employers routinely leave on the table. We handle the eligibility, the calculation, the reporting and the reclaim as one job.
Statutory Sick Pay (SSP)
Statutory Sick Pay is the payment due to eligible employees who are off work sick beyond a short waiting period. To qualify, an employee generally has to be sick for a minimum number of consecutive days, earn at least a set average amount a week, and follow your sickness notification rules. SSP is then paid at a fixed weekly rate for the qualifying days of absence, up to a maximum number of weeks in a period of sickness.
The detail is where SSP gets fiddly: working out qualifying days from someone's normal working pattern, handling linked periods of sickness, and applying the current rate correctly. We check whether the employee qualifies, calculate the SSP due on their actual working pattern, and pay it through the payroll so it is taxed and reported properly. Our statutory sick pay guide explains the qualifying conditions and the mechanics in more depth.
Statutory Maternity Pay (SMP)
Statutory Maternity Pay is paid to eligible employees when they take maternity leave. To qualify, an employee generally needs enough continuous service by a set point before the baby is due, average earnings at or above a threshold, and to give the correct notice and evidence, such as the MATB1 certificate. SMP is then paid for up to 39 weeks, at a higher earnings-related rate for the first six weeks and a standard weekly rate (or the earnings-related figure if lower) for the remaining weeks.
Getting SMP right means checking service and earnings carefully, applying the two different rate stages in the correct order, and running it alongside any occupational maternity pay you offer. We confirm eligibility, calculate each stage on the correct figures for the year, and pay it through payroll. SMP is one of the payments you can usually reclaim from HMRC, which we cover below.
Statutory Paternity Pay (SPP)
Statutory Paternity Pay is paid to eligible employees taking paternity leave to care for a new child or support the mother or co-parent. Qualifying depends on continuous service, average earnings at or above the threshold, the right relationship to the child, and giving proper notice. SPP is paid for a short, fixed period of leave at the standard statutory weekly rate, or the employee's average earnings if those are lower.
Although the amounts are smaller than maternity pay, the eligibility conditions and notice rules are just as precise, and the leave has to be taken within a set window around the birth or placement. We check the conditions, calculate the SPP due, and pay and report it through payroll, reclaiming the recoverable amount for you.
Adoption and shared parental pay
Two further statutory payments round out the family-related set:
- Statutory Adoption Pay (SAP) works much like maternity pay for an employee who is adopting a child, with similar eligibility conditions and a comparable pay structure over the leave period.
- Shared Parental Pay (ShPP) lets eligible parents share leave and pay between them after a birth or adoption, giving families flexibility in how they split the time off. It is paid at the standard statutory weekly rate, or average earnings if lower, for the shared weeks taken.
Shared parental arrangements in particular can be complex, because leave and pay are divided between two people and often taken in separate blocks. We work through the eligibility for each parent, calculate the correct entitlement, and administer the payments accurately within the payroll, so a complicated arrangement is handled cleanly.
Reclaiming statutory payments from HMRC
A crucial point that saves employers real money: most of the family-related statutory payments can be reclaimed from HMRC. Employers can usually recover a large proportion of statutory maternity, paternity, adoption and shared parental pay, and smaller employers may be entitled to reclaim an even higher amount, plus compensation, under the small employers' relief.
The reclaim is made through your Employer Payment Summary (EPS), which reduces the PAYE you pay over to HMRC by the amount recovered. Statutory Sick Pay, by contrast, is generally not recoverable under the current rules, so we describe the position as it stands rather than assume a reclaim that is not there. We work out exactly what is recoverable in your case, file the reclaim on your EPS, and make sure you are not paying out of your own pocket what the state should be funding. Our RTI submissions service explains how the EPS fits into your reporting.
How we administer statutory payments
Statutory payments are exactly the kind of thing that is straightforward when someone does it every day and error-prone when it lands on a busy employer once in a while. When a period of sickness, a pregnancy, an adoption or shared leave comes up, you tell us the details and we take it from there. We confirm the eligibility conditions, apply the correct rate and period for the relevant tax year, work the payment into the pay run so it is taxed and shown clearly on the payslip, report it to HMRC on your FPS, and reclaim any recoverable amount through your EPS.
Because we run your whole payroll, statutory pay slots into the normal process rather than becoming a one-off puzzle, and it interacts correctly with everything else, from pensions to holiday pay that continues to accrue while someone is on leave. Nothing is missed, nothing is overpaid, and you recover what you are due.
We are a South Wales payroll bureau with more than 60 years of combined experience, and many of our clients have been with us since 2006. We are CIPP members and Chartered Accountants (ICAEW), and we are ICO registered and Cyber Essentials certified, so your statutory pay and your employees' data are in careful, accredited hands. If you want statutory payments calculated, paid and reclaimed correctly, talk to us about your payroll or see how our pricing works.