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    TaxKilnUK tax guidance
    TaxKilnUK tax guidance

    Being an employer → Statutory pay (SSP / SMP / SPP / SAP / ShPP / SPBP / SNCP)

    Statutory Pay 2025/26 — SSP £118.75 + Family Leave £187.18 + SER Reclaim 109%

    Statutory Sick Pay (SSP) is £118.75/week 2025/26 — payable from the 4th day of incapacity for up to 28 weeks per period of incapacity. Statutory Maternity Pay (SMP), Paternity (SPP), Adoption (SAP), Shared Parental (ShPP), Parental Bereavement (SPBP) and the new Statutory Neonatal Care Pay (SNCP, from 6 April 2025) all sit at the higher of £187.18/week or 90% of Average Weekly Earnings (90% of AWE applies for the first 6 weeks of SMP/SAP). Small Employers' Relief (SER) reclaim rate is 109% from 6 April 2025 — meaning small employers reclaim 100% of statutory family pay plus a 9% compensation uplift via EPS. SER eligibility: total Class 1 NI bill ≤£45,000 in the previous tax year.

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    Guidance, not advice. We explain the rules, we don't assess your situation. Always seek financial or tax advice from your accountant, or contact HMRC. Read our editorial scope →

    In plain English

    Statutory pay falls into two families. (1) Sickness: SSP at £118.75/week for up to 28 weeks, kicking in from day 4 of incapacity. Employers cannot reclaim SSP (the old Percentage Threshold Scheme was abolished in 2014). (2) Family leave: maternity, paternity, adoption, shared parental, parental bereavement, and the new neonatal care pay (SNCP, from 6 April 2025) all sit at £187.18/week or 90% of AWE (whichever is lower; SMP/SAP pay 90% of AWE for the first 6 weeks then drop to the standard rate for up to 33 weeks more). Small employers (Class 1 NI bill ≤£45,000 in the prior tax year) get Small Employers' Relief: 109% reclaim from 6 April 2025 (was 108.5% in 2024/25, and 103% before then). The 9% uplift compensates for administrative cost. Reclaim is made via EPS each month. The Allocation of Tips Act 2023, effective 1 October 2024, requires 100% of tips/gratuities/service charges to flow to workers under a written tips policy. Tips do NOT count towards NMW (never have) and cannot be used to substitute for statutory pay. Statutory Neonatal Care Pay (SNCP) is new from 6 April 2025: up to 12 weeks paid leave for parents whose baby spends 7+ continuous days in neonatal care within 28 days of birth.

    How it works

    SSP — Statutory Sick Pay

    £118.75/week 2025/26, paid for qualifying days, from day 4 of incapacity (days 1-3 'waiting days' not paid). Max 28 weeks per period of incapacity. Eligibility: employee (worker too, in some cases); earning ≥ LEL £123/week 2025/26; properly notified sickness. Employer cannot reclaim SSP (PTS abolished April 2014). Records: 3 years.

    SMP — Statutory Maternity Pay

    39 weeks total: first 6 weeks at 90% of AWE; next 33 weeks at £187.18 or 90% of AWE (whichever lower). Eligibility: 26 weeks continuous employment by qualifying week (15th week before EWC); earning ≥ LEL £123/week average. Notice: 28 days before maternity leave start. SMP1 form if not eligible.

    SPP / SAP / ShPP / SPBP

    Statutory Paternity Pay: up to 2 weeks at £187.18/week or 90% AWE. Statutory Adoption Pay: mirrors SMP structure. Shared Parental Pay: up to 37 weeks (after mother's compulsory 2 weeks) shareable between parents at £187.18/week or 90% AWE. Statutory Parental Bereavement Pay: 2 weeks at £187.18 or 90% AWE.

    SNCP — Statutory Neonatal Care Pay (NEW)

    Effective 6 April 2025 (Neonatal Care (Leave and Pay) Act 2023). Up to 12 weeks paid leave for parents whose baby spends 7+ continuous days in neonatal care within 28 days of birth. Rate: £187.18/week or 90% AWE (whichever lower). Separate from + additional to SMP/SPP.

    Small Employers' Relief (SER)

    Eligibility: total Class 1 NI bill (employee + employer) ≤£45,000 in prior tax year. Reclaim rate from 6 April 2025: 109% (was 108.5% 2024/25; 103% prior years). Applies to all statutory family pay (SMP/SPP/SAP/ShPP/SPBP/SNCP). Non-SER employers reclaim 92%. Mechanism: deduct from EPS each month.

    Allocation of Tips Act 2023

    Effective 1 October 2024. Employer must pass 100% of tips/gratuities/service charges (whether cash, card, tronc) to workers in a fair and transparent manner under a written tips policy. Cannot reduce wages to offset tips. Cannot use tips for NMW. Tribunal route for breach + statutory uplift.

    Who this applies to + key conditions

    Statute + manual references

    Primary: Social Security Contributions and Benefits Act 1992 — SSP + SMP statutory basis; subsequent legislation for SPP/SAP/ShPP/SPBP/SNCP.

    Related: Statutory Sick Pay (General) Regulations 1982 (SI 1982/894); Statutory Maternity Pay (General) Regulations 1986 (SI 1986/1960); Children and Families Act 2014 — Shared Parental Leave + Pay; Parental Bereavement (Leave and Pay) Act 2018; Neonatal Care (Leave and Pay) Act 2023 — SNCP from 6 April 2025; Allocation of Tips Act 2023 — effective 1 October 2024; Statutory Maternity Pay (Compensation of Employers) and Miscellaneous Amendment Regulations 1994 — SER framework

    HMRC manual: Statutory Payments Manual (SPM00000+); CWG5 Class 1A NICs Guide

    Common mistakes + traps

    Worked example

    Gamma Ltd (small employer, prior-year NI bill £30k), employee Sarah on maternity leave 39 weeks, AWE £400/week

    Sarah starts SMP on 1 June 2025 for full 39 weeks. AWE £400. Gamma's prior-year Class 1 NI bill £30k = qualifies for SER reclaim 109%.

    1. Weeks 1-6: 90% of AWE = £360/week × 6 weeks = £2,160.
    2. Weeks 7-39 (33 weeks): lower of £187.18 or 90% AWE £360 = £187.18/week × 33 weeks = £6,176.94.
    3. Total SMP paid to Sarah: £2,160 + £6,176.94 = £8,336.94.
    4. SER reclaim 109%: Gamma reclaims £8,336.94 × 1.09 = £9,087.26 via EPS over the SMP period.
    5. Net cost to Gamma: £8,336.94 paid out − £9,087.26 reclaimed = NEGATIVE £750.32 (i.e. Gamma gains £750.32 from the SER uplift).
    6. PAYE + NIC due on SMP normally (it is taxable + NICable income for Sarah).

    Outcome: Sarah receives £8,336.94 SMP. Gamma's net cost is negative £750.32 thanks to the 109% SER reclaim — the 9% uplift compensates Gamma's admin cost and then some.

    How this connects to the rest of the framework

    RTI mechanics →

    All statutory pay reported via FPS; recovery (SER for family pay) via EPS.

    Employer NICs 2025/26 →

    Statutory pay is itself NICable + PAYE-able; reclaim is separate via EPS.

    National Minimum Wage →

    Tips do NOT count towards NMW (Allocation of Tips Act reinforces).

    Pension auto-enrolment →

    Pension contributions continue on statutory pay (using normal pay reference period rules).

    Frequently asked questions

    What happens if I miss the Self Assessment deadline?+
    The Self Assessment deadline is 31 January (online filing) for the previous tax year. Miss it and HMRC apply an automatic £100 penalty. Beyond that: £10 per day from 3 months late (capped at £900), 5% of tax due at 6 months late, and another 5% at 12 months late, under Schedule 55 of the Taxes Management Act 1970. If you have a genuine reason (serious illness, bereavement, technical issue with HMRC's systems) you can appeal with evidence; HMRC accepts reasonable excuse appeals in most genuine cases.
    Do I need an accountant or can I file Self Assessment myself?+
    Legally you can file Self Assessment yourself via gov.uk for free, most simple sole-trader returns (single income source, basic expenses) are realistic to self-file. An accountant adds real value when: your trading profit is above £40,000 (extraction-strategy decisions matter), you have multiple income streams (PAYE + self-employment + property + dividends), you've crossed the £90,000 VAT threshold, you're considering incorporation, or you have an HMRC enquiry. Expect to pay £400-£1,500/year for a typical sole-trader accountant; the cost is itself a deductible expense.
    How do payments on account work?+
    When your Self Assessment tax bill exceeds £1,000 for the first time, HMRC requires payments on account toward NEXT year's tax. Half the current bill is due 31 January (alongside the current bill); the other half is due 31 July. So your first January after crossing the threshold can hit with a double-bill: last year's balance + first payment on account. Adjust via Form SA303 if you expect next year's income to drop substantially. Payments on account don't apply if more than 80% of your tax is collected via PAYE.
    What is the SER reclaim rate from April 2025?+
    109% (was 108.5% in 2024/25 and 103% before that). Small employers reclaim 109% of statutory family pay via EPS.
    Can I reclaim SSP?+
    No — the Percentage Threshold Scheme that allowed SSP reclaim was abolished in April 2014. SSP is now wholly an employer cost.
    Is Statutory Neonatal Care Pay new?+
    Yes — SNCP began 6 April 2025 under the Neonatal Care (Leave and Pay) Act 2023. Up to 12 weeks for parents whose baby spends 7+ continuous days in neonatal care within 28 days of birth.
    Do I have to distribute tips 100% to workers?+
    Yes — Allocation of Tips Act 2023 effective 1 October 2024 requires 100% of tips/gratuities/service charges to flow to workers under a written tips policy.

    Free + regulated-body resources

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