Statutory Sick, Maternity And Paternity Pay
Statutory Sick, Maternity, and Paternity Pay
Employers in the UK are required to comply with regulations for Statutory Sick Pay (SSP), Statutory Maternity Pay (SMP), Statutory Paternity Pay (SPP), and Shared Parental Pay (ShPP). These statutory payments ensure minimum legal protections for employees during periods of illness, maternity, or paternity leave. AHACCOUNTANTS can provide guidance for employers in Nottingham to ensure they adhere to these obligations. Below is an overview of each statutory payment.
Statutory Sick Pay (SSP)
SSP applies to all employers regardless of size. Employers may opt out of SSP only if their occupational sick pay scheme offers equal or greater benefits than SSP, but record-keeping remains mandatory.
Key Terms:
- Period of Incapacity for Work (PIW): Four or more calendar days of sickness.
- Qualifying Days (QDs): Normal working days for which SSP is payable after a waiting period.
- Waiting Days (WDs): The first three QDs in a PIW, for which SSP is not payable.
Eligibility:
- Employees must earn at least the Lower Earnings Limit (LEL), which is £120 per week for 2021/22.
- Employees must notify their employer of illness and provide medical evidence (self-certify for the first seven days, thereafter provide a GP’s Fit Note).
Payment:
- SSP is £116.75 per week for 2024/25, payable for up to 28 weeks.
- SSP is taxable and subject to PAYE. Employers cannot recover SSP from HMRC.
Statutory Maternity Pay (SMP)
SMP is payable to female employees who meet certain criteria. Employers must pay SMP if an employee qualifies, but they can recover most or all of the SMP from HMRC.
Eligibility:
- Employees must provide 28 days’ notice of maternity leave, medical evidence (MATB1), and have been continuously employed for 26 weeks up to their qualifying week (15 weeks before the baby is due).
- Employees must have average weekly earnings (AWE) above the LEL.
Payment:
- SMP is paid for up to 39 weeks.
- First six weeks: 90% of AWE.
- Remaining 33 weeks: The lower of 90% of AWE or £184.03 per week for 2024/25.
Employers can recover 92% of SMP from PAYE. Small employers may be entitled to recover 100% of SMP plus an additional 3% compensation.
Ordinary Statutory Paternity Pay (OSPP)
OSPP is payable to partners, including biological fathers, adoptive parents, and same-sex partners, who take time off after the birth or adoption of a child.
Eligibility:
- The partner must provide 28 days’ notice, submit a declaration of family commitment, and have been continuously employed for 26 weeks up to their qualifying week.
- AWE must be above the LEL.
Payment:
- OSPP is payable for a maximum of two weeks.
- For babies due after 7 April 2024, the leave can be taken as two separate blocks of one week or as a single two-week block.
- The rate is the lower of 90% of AWE or £184.03 for 2024/25.
Like SMP, OSPP is taxable and subject to PAYE. Employers can recover OSPP under the same rules as SMP.
Shared Parental Pay (ShPP) and Shared Parental Leave (SPL)
SPL allows parents to share maternity leave between them, giving flexibility in how they manage childcare.
Key Points:
- Mothers must take a minimum of two weeks’ compulsory maternity leave before they can share SPL with their partner.
- Parents can share up to 50 weeks of leave and 37 weeks of pay, provided they meet the eligibility requirements.
- The rates and recovery methods for ShPP are the same as for SMP.
- Employees have the right to return to their job after taking up to 26 weeks of combined SPL, or a similar job if they take more than 26 weeks.
Statutory Adoption Pay (SAP)
SAP operates similarly to SMP but is for adoptive parents. The employee must provide evidence of the adoption and meet the same earnings and service criteria as SMP. SAP is also paid at the same rate as SMP, with similar recovery rules.
Employers should ensure compliance with statutory payment obligations to avoid legal complications. AHACCOUNTANTS can provide expert advice on managing statutory payments and understanding these regulations fully.