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Statutory payment FAQs

I am trying to pay SSP but it is coming up with no entitlement, what am I doing wrong?

There are various reasons this might occur:

The employee has not been on the payroll very long. EARNIE needs 8 weeks previous gross pay to work out an average for SSP. You can either manually enter the SSP or enter some previous gross pay in the employee's record.

If the employee has an average gross pay that is less than the Lower Earnings Limit, they wouldn't qualify for SSP. You would need to Issue the employee with a SSP1 form.

The employee may not have 4 consecutive qualifying days. Again, they would not qualify for SSP.

You may have entered sickness into the absence diary and omitted the weekends. The weekends need to flagged as sick if they form part of the period of incapacity, even if Saturday and Sunday are non-qualifying days.

What percentage of SMP paid can we recover?

All employers are entitled to recover at least 92% of SMP paid. Small employers are entitled to reclaim 100% of the SMP plus an additional 4.5% of the NI contributions paid on SMP.

You qualify for Small Employer's Relief (SER) if you paid or were liable to pay total Class 1 NICs  of £45,000 or less in the previous tax year. If you satisfy these conditions you will need to flag the Small Employers Relief field under Company, Alter Company Options.

What are Keeping in Touch (KIT) days for people on maternity leave?

Under current legislation if a woman returns to work for any time at all during her SMP period she will lose her entitlement to SMP for that whole week.

KIT days have been introduced to allow employees to keep abreast of any changes or training, by allowing them to attend work up to 10 days during her SMP period. Provided the employee does not exceed this limit her entitlement to a full weeks SMP will not be affected.

Some important points:

KIT days are to form part of the maximum 39 week entitlement and are not in addition to it. These days are optional and cannot be insisted upon by either party.

KIT days must be taken as whole days, even if the employee only comes in for an hour.

Payment for KIT days:

As the employee is working under her contract of service for these days she must be paid an agreed rate for attending work. In most cases this will be at the employee’s normal rate of remuneration.

It will not be acceptable to pay the equivalent hourly rate of SMP as this will fall below the minimum wage. Any remuneration paid for the KIT day can count towards the SMP liability for that week, and equally the SMP can count towards the contractual obligation for the KIT day.

An interesting quirk of KIT days is the benefit to an employer if the employee returns to work early and hasn’t used all her KIT days. It will enable them to reclaim up to two weeks SMP against the contractual pay whereas previously no SMP was due as soon as the employee returned to work.

How do I calculate and pay a daily rate of SMP, according to the new regulations from April 2007?

Employers will have the option of dividing the weekly rate by 7 to provide a daily rate that can be better aligned to the number of days in the pay period.

It means SMP can be paid as odd days at the beginning and end of a month. It does not mean that the number of days in the month is simply multiplied by the daily rate.

Example:

This employee is receiving SMP during May 2007 with SMP weeks running from Wednesday to Tuesday:

The payment of SMP should be broken down as follows: 

• 1 days SMP due for Tuesday 1st May
• 4 full weeks’ SMP for Wednesday 2nd – Tuesday 29th May
• 2 days SMP for Wednesday 30th and Thursday 31st May

Where the daily rate option is used to pay SMP, it is calculated as the weekly rate divided by 7 multiplied by the number of single days to pay, then rounded up to the nearest penny.

Any recovery of SMP for the previous month should be calculated on the total SMP paid, not just on the full weeks.

It should be noted that the daily rate is only an option – employers are not obliged to calculate SMP this way and cannot be required to do so by their employees. SMP entitlement is still due in full weeks.  So, although employers might split a week (e.g. pay 2 days of the week in one month and the other 5 days of that week in the following month) they DO have to pay the full week. They can’t stop SMP part of the way through an SMP week. E.g. if a woman comes back to work on a Monday and her SMP week goes from Wednesday to Tuesday, she loses her entitlement to the full week (unless she has KIT days left, see below).

What are the changes to Statutory payments from April 2010?

Statutory Sick Pay (SSP)
Where Average Weekly Earnings (AWE) are £97.00 or more, the weekly rate is: £79.15.

Statutory Maternity Pay (SMP)
For the first six weeks: 90% of AWE.
For the remaining weeks: 90% of AWE or £124.88, whichever is the smaller.

Statutory Paternity Pay (SPP)
90% of AWE or £124.88, whichever is the smaller.

Statutory Adoption Pay (SAP)
90% of AWE or £124.88, whichever is the smaller.

 Please Note: all of the above changes will be applied automatically after your year end restart.

Small Employer’s Relief
Remains at £45,000

If you are entitled to Small Employer's Relief you should check you have ticked this under 'Company' 'Alter Company Options'.

There is no SSP/SMP/SAP/SPP reclaimed amount showing on the P30 Summary but I know there should be some there. What is wrong?

SSP, SMP, SAP and SPP Reclaimed is a figure that is created when the Month End Summary is run. For other reports to pick up these figures, the month end processing must be done and figures cleared down. If month end processing is not done, the figure is not held in the system.

Do not worry as you are able to manually enter the figures in the Statutory Payments table.

Go to the Company menu and choose Alter Company Details. On the Tax tab there is a button marked Statutory Payments. Click on the button and you will see a table with a month by month breakdown of SSP/SMP/SAP/SPP Total, Reclaimed and Compensation. If the Reclaimed amount is not here, enter it manually against the correct month.

I am printing the Company Cost Summary but it seems to be wrong. I have got a SSP/SMP Contra set up but this does not seem to be taken into account on the report, the SSP/SMP is still being added to Total Employer's Costs, why?

This is an easy problem to rectify. For an SSP/SMP Contra to be picked up on the Company Cost Summary you need to make a slight amendment to the deduction
set up.

• Go to the Company menu  and alter payments/deductions
• Highlight the SSP/SMP Contra and click edit
• Under the option Report Group choose Contra

Then re-run the report and it will be included.

What is the current rate for Statutory Sick Pay (SSP)?

The weekly rate for SSP is:

• Tax Year 2010/11 - £79.15
• Tax Year 2011/12 - £81.60

There is a daily rate that you pay if your employee is not due a full weeks Statutory Sick Pay. The daily rate is the weekly rate divided by the number of Qualifying Days you use in a week.

You can pay Statutory Sick Pay for up to 28 weeks in either a single Period of Incapacity for Work (PIW), or a Linked Period of Incapacity for Work unless there is a change of circumstances. If your employee's linked PIWs span 3 years you need to stop paying Statutory Sick Pay regardless of whether or not you have paid the 28 weeks of Statutory Sick Pay.

What is the current rate for Statutory Maternity Pay (SMP)?

Employees are entitled to up to 26 weeks SMP if the baby is due prior to the 1st April 2007. For babies due on or after the 1st April 2007, employees are entitled to up to 39 weeks. The first 6 weeks of payment are at 90% of the average weekly earnings and the remaining weeks at the rate set by HMRC.

This rate is:

• Tax Year 2010/11 - £124.88
• Tax Year 2011/12 - £128.73

or 90% of the average weekly earnings; whichever is lower.

What is the current rate for Statutory Paternity Pay (SPP)?

Employees are entitled to 2 consecutive weeks pay at the following rates:

• • Tax Year 2010/11 - £124.88
  • Tax Year 2011/12 - £128.73
• ~or 90% of the average weekly earnings; whichever is lower.

What is the current rate for Statutory Adoption Pay (SAP)?

Employees are entitled to up to 26 weeks pay, if the expected date of placement is prior to 1st April 2007 and 39 weeks pay if the expected date of placement is on or after the 1st April 2007. This is at the current rate for the tax year.

• • Tax Year 2010/11 - £124.88
  • Tax Year 2011/12 - £128.73
• ~or 90% of the average weekly earnings; whichever is lower.

How do I check the amount of SSP recovered is correct on my month end summary?

All employers are entitled to recover SSP under the Percentage Threshold Scheme. It doesn't matter if you are a small company or not. To calculate if you are entitled to recover ssp, calculate 13% of the total NIC liability for the company that month. If the total SSP paid that month exceeds this 13%, anything above this threshold may be reclaimed.

It is important to check this manually if you have one company split over two or more separate ID numbers.

Can an employee's Maternity Pay Period start on any day from April 2007 onwards?

Women with an expected week of birth date of 1st April 2007 or later will be entitled to start their SMP on any day of the week. This has changed from having to start on a Sunday as per previous rules.

This does not change the fact that an SMP week runs for 7 days, and that entitlement to SMP for that 7 days can only be established at the end of each week even if it’s paid in advance.

For example, where the MPP start date is a Tuesday the SMP weeks run from Tuesday to Monday for 39 weeks.  It is important to remember this when calculating the last week SMP - if the woman returns to work mid-week this now doesn’t automatically mean she has lost her SMP entitlement to that week.