Statutory Payments (SSP, SMP, SPP)
Payroll & HR Specialists
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Statutory Payments
In any business, it’s normal for employees to require time away from work due to circumstances such as illness, maternity, paternity, or adoption leave. When this happens, employers have a legal responsibility to assess whether the employee qualifies for statutory pay and to ensure the correct payments are made.
Statutory payments are designed to provide financial support to employees during periods of absence, while ensuring employers remain compliant with HMRC regulations and payroll reporting requirements.
As an employer, you must determine eligibility, calculate the correct statutory payment, process it through payroll, and report it accurately to HMRC.
Employees may be entitled to statutory payments if they:
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Become a parent, including through maternity, paternity, or adoption
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Are required to take time off work due to illness
Getting this wrong can lead to underpayments, HMRC penalties, or employee disputes, which is why many businesses choose to outsource statutory payment calculations and reporting to a payroll specialist.
Statutory Sick Pay (SSP)
Statutory Sick Pay (SSP) is paid to employees who are unable to work due to illness and meet the eligibility criteria set by HMRC.
An employee may qualify for SSP if they:
Are classed as an employee
Have been off sick for four or more consecutive working days (including non-working days)
Earn at least the Lower Earnings Limit (LEL) on average
Have properly notified their employer of their sickness
SSP is the minimum amount of sick pay an employer is legally required to pay. It is paid through payroll in the same way as wages and is subject to tax and National Insurance deductions.
SSP can be paid for a maximum of 28 weeks per period of sickness. If an employee remains unable to work beyond this point, other support options may apply, such as Employment and Support Allowance (ESA).
Employers are responsible for determining eligibility, calculating SSP correctly, processing payments through payroll, and reporting SSP accurately to HMRC. Errors in SSP handling can result in payroll inaccuracies, compliance issues, or employee disputes.
Statutory Maternity Pay (SMP) and Statutory Adoption Pay (SAP)
Statutory Maternity Pay (SMP) and Statutory Adoption Pay (SAP) are paid to eligible employees who take time off work due to maternity or adoption leave, in line with HMRC regulations.
Eligible employees may qualify for SMP or SAP if they:
Are classed as an employee
Have at least 26 weeks’ continuous employment by the relevant qualifying week
Earn at least the Lower Earnings Limit (LEL) on average
Provide the correct notice and supporting documentation
Payment structure
SMP and SAP are paid for up to 39 weeks and are structured as follows:
First 6 weeks: Paid at 90% of the employee’s average weekly earnings
Remaining 33 weeks: Paid at the statutory weekly rate set by HMRC (or 90% of earnings if lower)
SAP begins when an employee starts adoption leave. SMP usually starts on the day an employee begins maternity leave, which can be up to 11 weeks before the expected week of childbirth.
Both SMP and SAP are processed through payroll and are subject to tax and National Insurance deductions.
Employers are responsible for determining eligibility, calculating payments correctly, processing SMP and SAP through payroll, and reporting them accurately to HMRC. In most cases, employers can reclaim a significant proportion of these statutory payments from HMRC.
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Statutory Paternity Pay (SPP)
Statutory Paternity Pay (SPP) is available to eligible employees who take time off work following the birth or adoption of a child.
Employees may qualify for SPP if they:
Are classed as an employee
Have at least 26 weeks’ continuous employment by the qualifying week
Earn at least the Lower Earnings Limit (LEL) on average
Are the child’s father, partner, or adopter’s partner
Provide the correct notice and supporting documentation
Payment structure
SPP can be taken as one or two consecutive weeks and is paid at:
The statutory weekly rate set by HMRC, or
90% of the employee’s average weekly earnings,
whichever is lower.
SPP is processed through payroll and is subject to tax and National Insurance deductions.
Employers are responsible for confirming eligibility, calculating payments accurately, processing SPP through payroll, and reporting the payments to HMRC. In most cases, employers can reclaim some or all of the statutory paternity pay paid out.
Statutory Bereavement Pay (SBP)
Statutory Bereavement Pay (SBP), also known as Parental Bereavement Pay, is available to eligible employees following the death of a child or a stillbirth after 24 weeks of pregnancy.
Eligible employees are entitled to up to two weeks of Statutory Bereavement Pay. This leave can be taken in one of the following ways:
Two consecutive weeks
Two separate one-week periods
A single one-week period
The leave can be taken at any point within 56 weeks of the child’s death, giving employees flexibility during an extremely difficult time.
Payment structure
SBP is paid at:
The statutory weekly rate set by HMRC, or
90% of the employee’s average weekly earnings,
whichever is lower.
Statutory Bereavement Pay is processed through payroll and is subject to tax and National Insurance deductions, in the same way as normal employee wages.
Employers are responsible for confirming eligibility, processing SBP correctly through payroll, and reporting payments to HMRC. In most cases, statutory bereavement pay can be reclaimed from HMRC, either in full or in part, depending on the employer’s circumstances.
Reclaiming Statutory Payments
When you make statutory payments to employees, you are usually entitled to reclaim some or all of those payments from HMRC. This is done by offsetting the statutory payments against the PAYE tax and National Insurance contributions you owe.
For many employers, this reclaim happens automatically through payroll reporting. However, the rules vary depending on the type of statutory payment, your PAYE liabilities, and the size of your business.
Advance funding
If your PAYE and National Insurance liabilities are too low to recover the statutory payments owed, HMRC may allow you to request advance funding. This ensures employees are paid correctly and on time, without causing cash flow pressure for your business.
Managing statutory payment recovery requires accuracy, correct reporting, and a clear understanding of HMRC rules. Errors can result in delayed reclaims, incorrect submissions, or compliance issues.
How Easy PAYE supports you
At Easy PAYE, we manage all aspects of statutory payments and reclaims on your behalf, including:
- Assessing employee eligibility
- Processing statutory payments accurately through payroll
- Submitting correct PAYE and RTI information to HMRC
- Managing statutory payment recovery and offsets
- Advising on advance funding where applicable
- Ensuring full compliance with HMRC requirements
By outsourcing statutory payments to Easy PAYE, you reduce administrative burden, avoid costly mistakes, and gain confidence that payments and reclaims are handled correctly.
For further information about our statutory payment services, or to discuss your requirements in more detail, please
get in touch with our team – we’re always happy to help.
Get in touch!
For more information about our payroll services, or to discuss your requirements in
more detail, please get in touch.
Our experienced payroll team is always happy to help.