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Recap on 2022-23 Statutory Pay Rates for Employers

With the recent campaigns to improve statutory parental leave, we thought it would be timely to publish a reminder about the current pay rates and mandatory contributions employers must make when their staff are unable to work.

Today we'll look at the following:

If in any doubt, please get in touch with SAS Accounting Services as early as possible – our experienced payroll management team can steer you through the regulations and advise how these apply to your workforce.

UK Statutory Parental Leave Entitlements

SMP and Statutory Adoption Pay (SAP) are paid at the same rate, based on 90% of the employee's average weekly pay for the first six weeks. After that, the rate drops to either 90% of their average income, or £156.66 and continues for the following 33 weeks.

Employers need to pay SMP just as they would their usual wages, so if your staff are paid weekly, so will the SMP, with tax and National Insurance deducted at source.

SMP begins when the employee takes maternity leave, although it can start earlier if the staff member is unwell with an illness related to their pregnancy within four weeks of the due date.

Eligibility Rules for SMP Payments

Most employees will qualify for SMP, although some fall outside of the scope of the statutory payments system. To be eligible, staff must:

  • Earn at least £123 per week on average
  • Provide notice and evidence of pregnancy
  • Have been in post for 26 weeks or more by the 15th week before the birth

Staff should provide you with a copy of a MAT B1 or Maternity Certificate form. This form is proof of pregnancy and is issued by the midwife, consultant or doctor from 20 weeks of pregnancy.

Employers can reclaim up to 92% of SMP (along with most other statutory payments), and up to 103% if the business is eligible for Small Employers Relief and paid £45,000 or less in Class 1 NICs in the previous tax year.

If you wish to apply for a rebate, you must submit an SP32 form if you haven't presented your PAYE information through an RTI payroll system.

Shared Parental Leave (SPL)

Families can opt to split parental leave between them, called SPP, whether they are having a baby or adopting, fostering with a plan to adopt or having a child through a surrogate. They can also split Statutory Shared Parental Pay (ShPP).

Parents can split:

  • Up to 50 weeks of leave
  • Up to 37 weeks of pay

The allocated time off and statutory payments must be taken within the first year of the birth and can be taken either in one go or in blocks of leave.

For example, a mother could take 22 weeks paid at SMP and share 30 weeks of SPL with their partner and 17 weeks of ShPP.

Both parents must have been in post for at least 26 continuous weeks by the 15th week before the due date and remain employed with the same company until they take their proportion of SPL.

To qualify, each must also meet the minimum average weekly income of £123.

Statutory Paternity Pay (SPP)

SPP runs for up to two consecutive weeks, and the start date needs to be either the actual birth date or a pre-agreed number of days after the birth or the expected week when the baby is due.

Parents can claim SPP for up to 56 days from birth, equivalent to £156.66 per week or 90% of the employee's average weekly income – the lower of the two.

Employees can claim additional time off if the company offers a more generous allowance package or their partner returns to work, and they request SPL and ShPP.

While traditionally, a father takes two weeks SPP when a baby is born, it is also available to the mother's partner or husband, whether they are a biological parent, an adopter or an intended parent if the baby is born through surrogacy.

Statutory Sick Pay (SSP)

SSP is paid to employees who cannot work due to illness. It is paid by the employer for up to 28 weeks at £99.35 a week – or higher if the employer chooses to make up the difference.

It is illegal to pay less than the statutory payment, and many businesses have occupational sick pay schemes that ensure employees receive a higher wage – usually a proportion of their usual salary – for up to a maximum number of days or weeks.

Annual leave continues to accrue during sickness absences and can also be taken while a staff member is absent and eligible for SSP.

You pay SSP through your regular payroll system and begin making SSP payments if a staff member is absent for four consecutive days, including days when they were not expected to be at work.

Even if a staff member is at work for a very short period and then goes home, it does not count as the first sick day – the second day is considered day one.

The only circumstances where an employee is eligible for SSP before day four of their illness is if they had already claimed SSP within the previous eight weeks and had already waited three days before becoming entitled to SSP.

Staff are no longer entitled to SSP after 28 weeks. However, they may be able to claim Universal Credit or apply for the Employment and Support Allowance if they cannot work and the employer cannot provide additional wages.

Linked sickness periods must be four days or more each and up to eight weeks apart, and an employee is not eligible for SSP if they have continuous series of linked absences for three years or more.

For more advice about statutory payments, allowances, entitlements and deciding whether to subsidise absences with occupational schemes, please contact SAS Accounting Services at your convenience.

It is essential you report and remit any statutory amounts owing to your staff and apply the criteria correctly to determine which employees are and are not eligible for statutory pay.