Statutory Maternity, Paternity and Adoption Pay - Payroll Information from Michael Harwood & Co

Under the law, employers face a number of obligations regarding claims for Statutory Maternity, Paternity, Adoption and Shared Parental Pay. They must work out whether an employee is entitled to the pay, calculate the payment and administer it, determine how much of the payment can be recovered, and retain appropriate records.

Statutory Maternity Pay

Statutory Maternity Pay (SMP) is payable to qualifying women who are expecting to have a baby. SMP replaces normal earnings, and tax and national insurance contributions (NICs) must be deducted in the usual way.

If an employee is due to have a baby she has the right to take 26 weeks of Ordinary Maternity Leave (OML) and an extra 26 weeks of Additional Maternity Leave (AML). Any employee is entitled to take the leave on the condition that they provide you with the required notice. However, in order to qualify for SMP they must:

  • Have worked for you continuously for at least 26 weeks up to and into the 15th week before the week in which the birth is due
  • Have average earnings of at least the Lower Earnings Limit (LEL) for national insurance contributions (NICs)
  • Provide the appropriate paperwork giving evidence of the pregnancy
  • Give sufficient notice of when they would like to start their leave

Statutory Maternity Pay is payable at 90% of an employee's average weekly earnings (AWE) for the first six weeks. For the subsequent 33 weeks, employers are required to pay the employee either 90% of AWE or at the current rate of SMP/Statutory Adoption Pay , whichever is lower.

Statutory Adoption Pay

Employees that adopt a child may be entitled to receive Statutory Adoption Pay (SAP). The rules governing adoption leave and pay follow the rules for statutory maternity leave and pay.

Statutory Paternity Pay

Employees with partners who are having a child or adopting a baby are, subject to certain conditions, usually entitled to receive up to two weeks of Statutory Paternity Pay. They may also be entitled to Statutory Shared Parental Pay.

Statutory Shared Parental Pay

Subject to certain conditons, a woman may choose to end her maternity leave early and opt for Shared Parental Leave (SPL) and Statutory Shared Parental Pay (ShPP). SPL may be taken in blocks and can be shared between eligible working parents, partners and adopters, over the remainder of the 52 week period following the child’s birth or adoption. ShPP is payable for 39 weeks minus any weeks of maternity pay, Maternity Allowance or adoption pay already taken.

Handling statutory payments is only one of the issues that must be taken into account when administering payroll. Michael Harwood & Co can help take care of the burden. Please contact us for expert advice and assistance with your payroll systems.