As an employer, there are various statutory payments that must be made by law. For example, payments while the employee is absent from work due to the birth, adoption, or death of a child.
When employees meet the qualifying conditions, employers must pay at least the statutory amount for the relevant pay period. These rates are due to increase from April 2021 and will apply for the 2021/22 tax year.
Please keep in mind that an employee is only entitled to the statutory payments if their average earnings are at least equal to the lower earnings limit for National Insurance purposes for the qualifying period.
Statutory Maternity Pay
Throughout working life, there may become a time where you have employees who require maternity leave. Statutory Maternity Pay (SMP) is payable to an employee who is on maternity leave.
By law, an employee can take 52 weeks of maternity leave, but SMP is only payable for 39 weeks. Where an employee returns to work before the end of the maternity pay period, the payment will cease and normal pay will resume.
During the first six weeks of the maternity pay period, SMP is payable at a rate of 90% of the employee’s average earnings.
During the remainder of the period, SMP will be paid at the lower of 90% of the employee’s average earnings or the standard SMP amount.
For 2021/22, standard SMP is set at £151.97 per week.
Statutory Adoption Pay
Statutory Adoption Pay (SAP) will be payable to one parent on the adoption of a child. Statutory Paternity Pay may be paid to the other parent on the adoption of the child.
Adoption pay is very similar to maternity pay and leave. The employee may take up to 52 weeks of leave but will only be eligible for payment for 39 weeks. As with SMP, if the employee returns from the adoption pay period early then the SAP will cease.
SAP is payable at the same rate as SMP.
Statutory Paternity Pay
Statutory Paternity Pay may be payable on the birth or the adoption of a child. The child’s father, mother’s partner or the adoptive parent who is not in receipt of the SAP, may be eligible for paternity leave and pay.
SPP does work differently to SMP and SAP. Eligible employees are entitled to two week’s paternity leave and this can be taken in a single block or two one-week blocks. Often individuals will take some holidays on either side.
SPP is paid at £151.97 per week or, if lower, at the rate of 90% of the employee’s average earnings.
Shared Parental Pay
In some cases, parents will choose to share the leave. This would be classed as Shared Parental Pay or SHPP.
Where an employee returns to work before the end of the maternity or adoption pay period, the employee can share the remaining leave with their partner, payable at the standard amount of £151.97 per week or, where lower, 90% of the employee’s average earnings.
Statutory Parental Bereavement Pay
In the devastating event of losing a child, parents will be entitled to statutory parental bereavement leave if their child was under the age of 18 or a stillbirth after 24 weeks.
In these circumstances, bereaved parents can take two weeks’ parental bereavement leave, either in a block or two separate weeks.
Bereaved parents will also be entitled to Statutory Parental Bereavement Pay (SPBP) at the standard amount of £151.97 per week or, where lower, 90% of the employee’s average earnings.
For more information on the new statutory payment rates for 2021/22, please take a look at
If you found this useful, please share it using the icons at the side of the page, or leave a comment below.
If you’d like a meeting or a Skype call to discuss this, please get in touch with your favourite Liverpool accountant
- You can ring us on 0151 380 8080
- You can email us at firstname.lastname@example.org