Parental pay

Maternity leave and pay

If your employee is expecting a baby, she 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. She may also be entitled to Statutory Maternity Pay (SMP). This replaces her normal earnings to help her take time off around the time of the birth and immediately after.

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.

In order 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 she does not return after the baby is born. If she is not entitled to SMP, then she must be informed 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, she receives 90% of her average weekly earnings as SMP. For the remainder of the period, she 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.

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/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. 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 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.

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 male or female employees adopting a child aged up to 18. As with SMP, in order 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.

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.

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

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 woman carrying the child. You can find out more on the ACAS website.

Shared parental leave and pay

Shared parental leave (SPL) and shared parental pay (ShPP) have applied since 6 April 2015, to help give families more choice over taking leave in the first year.

The rules say that mothers 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 (maximum 50 weeks’ leave and maximum 37 weeks’ pay at £172.48 a week (for 2023/24) or 90% of your average weekly earnings, whichever is lower) can be split between both parents, if both meet the eligibility criteria and notice requirements.

The shared parental regime can be very flexible. For example, a mother could end her maternity leave after 12 weeks, leaving 40 weeks (of the total 52-week entitlement) available for SPL. If both the mother and her partner 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 the mother takes maternity leave for 12 weeks, then the father takes a period of SPL of 20 weeks, then the mother takes a period of SPL of 20 weeks; the mother would be paid SMP for 12 weeks, the father would be paid ShPP for 20 weeks and finally, the mother would be paid ShPP for the first seven weeks of her second leave period.

If, instead, the mother and father decided to take 20 weeks 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 that if, as here, the father is entitled to ShPP for any period of SPL, this will be paid by his employer.

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 father will not be entitled to take SPL and ShPP. But they could still pass the employment and earnings test – allowing the mother in the family to qualify. The mother might then choose to enter the shared parental regime so that she can take leave in a more flexible way than would be possible if she remained on maternity leave. For example, she 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), and if they have 26 weeks service, 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 is able to 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 in our paying HMRC section.

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

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, the Neonatal Care (Leave and Pay) Bill, to give parents whose babies require neonatal care a right to receive paid leave, is currently progressing through parliament. Once introduced, it will give both parents up to 12 weeks extra leave and pay to spend vital time with their babies if they are born premature or sick, as long as they meet the qualifying criteria. Before parents can access it, it needs to become law. It will only become law once it has been through the parliamentary process.