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From 6 January 2024, the main rate of class 1 National Insurance contributions (NIC) deducted from employees’ wages is reduced from 12% to 10%. From 6 April 2024, the main rate of self-employed class 4 NIC will reduce from 9% to 8% and class 2 NIC will no longer be due. Those with profits below £6,725 a year can continue to pay class 2 NIC to keep their entitlement to certain state benefits. Our guidance will be updated in full in spring 2024.

Updated on 6 April 2023

Parental pay: information for employers

As an employer, you may have employees needing to take time off due to pregnancy (or their partner’s pregnancy) or because they are adopting a child. This page explains more about the minimum payments due to employees during periods of parental leave. You can, of course, decide to pay your employee more than the basic legal minimum level.

Content on this page:

Maternity leave and pay

Employees expecting a baby will generally be entitled to Statutory Maternity Leave of up to 52 weeks around the birth of the baby. Employees must take at least two weeks after the birth and may also be entitled to Statutory Maternity Pay (SMP). This replaces the employee’s normal earnings.

There is no length of employment requirement for entitlement to maternity leave, however whether you have to pay SMP to your employee depends on how long they have worked for you and how much they earn.

To qualify for SMP, your employee must have been continuously employed for at least 26 weeks into the 15th week before the baby is due (normally around the 25th week of pregnancy). This 15th week is known as the ‘qualifying week’.

If your employee has been employed for long enough, you must see whether they have earned enough to be entitled to a payment of SMP. The employee’s average weekly earnings for the 8 weeks leading up to the qualifying week must be £123 or over to qualify for SMP in 2023/24.

They will have to provide you with evidence of when the baby is due and give you 28 days' notice of when they want you to start paying their SMP (this cannot start any earlier than the 11th week before the week in which the baby is due). Evidence is usually provided by giving you a maternity certificate form MAT B1, which is issued by a doctor or midwife.

If your employee meets the necessary conditions, you are required to pay SMP for 39 weeks, even if your employee does not return after the baby is born. If your employee is not entitled to SMP, then you must inform them on form SMP1 which must be provided within 7 days of the decision not to make payment.

For the first six weeks of the maternity pay period, SMP is 90% of the average weekly earnings. For the remainder of the period, the employee receives the lower of the 90% of average weekly earnings and £172.48 per week (in 2023/24).

Payments of SMP count as earnings. You must deduct tax and National Insurance contributions (NIC) from them in the usual way.

You will normally be able to claim back some or all of the SMP you pay. We give further guidance on this under the heading below: Recovery of payments.

There is detailed guidance on SMP on GOV.UK. There is further guidance on unusual circumstances that can impact on SMP – for example, what to do when paying maternity pay if an employee leaves, becomes sick, dies, or is awarded a pay rise (note changes to the National Minimum Wage count as a pay rise and can impact on SMP).

Please note that employers must also give pregnant employees time off for antenatal care and pay their normal rate for this time off. The father or pregnant woman’s partner has the right to unpaid time off work to go to two antenatal appointments. You can find out more about pregnant employees’ rights, including to do with their health and safety on GOV.UK.

Paternity leave and pay

An employee will generally be eligible for Statutory Paternity Leave if their spouse or civil partner is having a baby or adopting a child.

In addition, if the necessary conditions are met, they will receive Statutory Paternity Pay (SPP).

Whether you have to pay them SPP depends on how long they have worked for you and how much they earn – essentially the same tests as for SMP described above. In addition, the employee must continue to work for the employer until the baby is born. They will also have to provide you with a declaration that they will be responsible for the child’s upbringing and give you notice of when they want you to start paying their SPP. Note that the employee entitled to statutory paternity leave and pay does not necessarily have to be male.

The employee can choose to take either one or two consecutive whole weeks leave within 8 weeks of the baby’s birth (or the child’s placement in the case of adoption). The amount of SPP payable during this period is the lower of 90% of average weekly earnings and £172.48 for 2023/24.

Where an employee is not entitled to payment of SPP, then you have to give them form SPP1.

Payments of SPP count as earnings. You must deduct tax and NIC from them in the usual way.

You'll normally be able to claim back some or all of the SPP you pay. We give further guidance on this under the heading below: Recovery of payments.

You can find detailed guidance about SPP on GOV.UK.

Adoption leave and pay

When an employee is adopting a child they will generally be entitled to Statutory Adoption Leave of up to 52 weeks. The employee must take at least 2 weeks of leave.

Statutory adoption pay (SAP) may be claimed by any employees adopting a child aged up to 18. As with SMP (see heading above: Maternity leave and pay), to be eligible for SAP, conditions must be met in relation to length of employment and level of earnings.

Only one person in a couple (the “primary adopter”) can obtain SAP and leave. The other partner may be eligible for paternity pay and leave (see above).

The employee must give the employer 28 days' notice for payment of SAP and must provide the employer with proof of adoption, showing the name and address of the adoption agency, the date the child was matched with the employee and the actual or expected date of placement.

SAP is paid at 90% of salary for the first 6 weeks as per SMP, and the lower of the 90% average weekly earnings and £172.48 per week (in 2023/24) thereafter.

It is paid in the same way as normal wages (for example, monthly or weekly). Tax and NIC will need to be deducted.

You will normally be able to claim back some or all of the SAP you pay. We give further guidance on this under the heading below: Recovery of payments.

There is detailed guidance on statutory adoption pay on GOV.UK.

Surrogacy

If your employee is having a child through a surrogacy arrangement, they may also be eligible for statutory adoption leave and pay. They will also be entitled to take unpaid time off to attend two antenatal appointments with the surrogate. You can find out more on the ACAS website.

Shared parental leave and pay

Shared parental leave (SPL) and shared parental pay (ShPP) help give families more choice over taking leave in the first year.

The rules say that employees on maternity or adoption leave (after taking a compulsory two weeks leave) can choose to transfer some of their maternity/adoption leave (and pay) to their partner.

SPL and ShPP are created from the remaining weeks of maternity/adoption leave and pay. It means that the remaining balance of leave and parental pay can be split between both parents, if both meet the eligibility criteria and notice requirements. The maximum SPL is 50 weeks’ leave. The maximum ShPP is 37 weeks’ pay at £172.48 a week (for 2023/24) or 90% of the employee’s average weekly earnings, whichever is lower.

The shared parental regime can be very flexible. 

Example

Your employee could end their maternity leave after 12 weeks, leaving 40 weeks (of the total 52-week entitlement) available for SPL. If both partners are eligible, they can share the 40 weeks of SPL and can share 27 weeks (of the total 39-week entitlement) of ShPP. The remaining 13 weeks of leave entitlement, if taken, is unpaid.

So in the example above, if partner 1 takes maternity leave for 12 weeks, then partner 2 takes a period of SPL of 20 weeks, then partner 1 takes a period of SPL of 20 weeks; partner 1 would be paid SMP for 12 weeks, partner 2 would be paid ShPP for 20 weeks and finally, partner 1 would be paid ShPP for the first seven weeks of their second leave period.

If, instead, both partners decided to take 20 weeks of SPL at the same time as each other, that is fine, however they would need to agree how to divide the 27 weeks of ShPP between them.

Please note: if, as in this example, partner 2 is entitled to ShPP for any period of SPL, this will be paid by their employer.

Qualifying for shared parental leave

To qualify for SPL, a parent must pass the continuity of employment test and have earned an average salary of at least £123 (in 2023/24) for the 8 weeks prior to the 15th week before the expected due date (or matching date if an adoption). The other parent in the family must meet the employment and earnings test.

  • Continuity of employment test: the person must have worked for the same employer for at least 26 weeks at the end of the 15th week before the week in which the child is due (or at the week in which an adopter was notified of having been matched with a child or adoption) and is still employed in the first week that SPL is to be taken.
  • Employment and earnings test: the person must have worked for at least 26 weeks in the 66 weeks leading up to the due date and have earned at least £390 in total in 13 of the 66 weeks (this can be as an employee or self-employed person).

An employee is eligible for ShPP if they are eligible for SAP or SMP. In addition, they are eligible if they qualify for SPP and their partner is eligible for SMP or SAP.

Please note that it is possible that only one parent will qualify for SPL and ShPP. For example, a self-employed partner will not be entitled to take SPL and ShPP. But they could still pass the employment and earnings test – allowing the partner who gave birth in the family to qualify. The partner who gave birth might then choose to enter the shared parental regime so that they can take leave in a more flexible way than would be possible if they remained on maternity leave. For example, they may want to take three separate periods of shared parental leave, interspersed with periods back at work.

Only the key points are detailed here. More information on SPL and ShPP is on GOV.UK.

The provisions are complex and extensive so you may find that you need to refer to the detailed guide for employers. This can be found on GOV.UK. But remember that the existing rules on parental leave and pay, for example on SMP and SPP, will remain the ‘default’ position.

Parental bereavement leave and pay

Since April 2020, employees in Great Britain who suffer the loss of a child may be entitled to Statutory Parental Bereavement Leave (either a single block of one or two weeks, or as two separate blocks of one week taken at different times).

If they have 26 weeks’ service, they may be entitled to Statutory Parental Bereavement Pay as well, paid at the statutory flat weekly rate of £172.48 (or 90% of average earnings, where this is lower).

You can find an employer guide on GOV.UK.

From 6 April 2022, this right has also come into effect in Northern Ireland.

Recovery of payments

Generally, an employer can claim back from HMRC 92% of the statutory parental payments that are paid in a month. However, where the employer is small (where total annual employer and employee NICs payable are less than £45,000), they can recover the full amount, plus 3%.

The employer recovers the relevant amount by deducting the amount from the payment they are due to make to HMRC in respect of PAYE and NIC. You can read more about this on our paying HMRC page.

The amount that the employer wishes to set off against payments due should be reported on an Employer Payment Summary (EPS) by the 19th of the tax month following that to which it relates (or by completing an RT5 for the relevant quarter if paper filing).

You can write to the PAYE Employer Office to ask for a repayment if you can’t set off the payments against the current year’s liabilities. You can’t do this until the start of the next tax year.

See GOV.UK for further information.

If you cannot fund the parental payments up front, you can apply for HMRC to pay you in advance.

Records

An employer has to keep records of the SMP, SAP, SPP etc. payments made. HMRC provide forms SMP2, SAP2 and SPP2 for this purpose, although the employer can retain the information in another way if they wish.

The employer should also retain the maternity certificates and so on.

Further help

If you are an online filer, your payroll software (including HMRC’s Basic PAYE Tools) will help you calculate any SMP, SAP, SPP due. (If using HMRC’s Basic PAYE Tools, you should enter the amount to be paid under Statutory Payments, rather than in the usual place.)

If you are a paper filer, GOV.UK provides standalone calculators to help calculate the amount of SMP, SAP and SPP.

If possible, these amounts should be itemised on the payslip as SMP, SAP, SPP etc. to differentiate it from any other taxable income.

You should note that Statutory Sick Pay cannot be paid at the same time as any of the statutory parental payments.

For a full collection of detailed guidance for employees and employers on Statutory Sick Pay, SMP, and the other parental payments, please see GOV.UK. Here you will find a guide on the penalties which may apply if the employer fails to make correct payments.

The rights of parents to the various different types of leave and pay is very complicated. ACAS have lots of information about it on their website and you can also contact the ACAS helpline for advice.

Note, you have may seen that the Neonatal Care (Leave and Pay) Act, to give parents whose babies require neonatal care a right to receive paid leave, received Royal Assent in May 2023. However this is just an enabling Act – before anyone can benefit, further Regulations need to be laid. Once introduced, this will give both parents up to 12 weeks of extra leave and pay to spend vital time with their babies if they are born premature or sick, if they meet the qualifying criteria. 

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