Statutory payments
Employers are often surprised by how many different statutory payments exist for employees with children—and more importantly, how much of this cost can be recovered.
Understanding these rules is essential for managing cash flow, payroll, and compliance.
What statutory payments are available?
There are several types of statutory payments related to childbirth and family support, including:
- Statutory Maternity Pay (SMP)
- Statutory Paternity Pay (SPP)
- Statutory Adoption Pay (SAP)
- Shared Parental Pay (ShPP)
- Parental Bereavement Pay
- Neonatal Care Pay
Each has its own eligibility criteria, but from an employer’s perspective, the key question is:
How much can you reclaim?
How much can employers reclaim?
In most cases, employers can reclaim:
- 92% of statutory payments made to employees
This applies to the majority of businesses.
Small Employers’ Relief (SER): Claim more back
If your business qualifies for Small Employers’ Relief (SER), you can reclaim more than you pay out.
To qualify:
- Your total Class 1 NICs liability must be £45,000 or less
- Based on the last complete tax year
- The Employment Allowance is ignored when calculating this
Reclaim rates:
- 2025/26: 108.5%
- 2026/27: 109%
This means eligible employers can not only recover the statutory payments—but also receive additional compensation.
Why this matters for your business
These repayments can make a significant difference to:
- Cash flow
- Payroll costs
- Budgeting for staff absences
For smaller businesses in particular, SER provides valuable support when employees take leave.
Common mistakes to avoid
Employers should be careful to:
- Apply the correct statutory payment rules
- Ensure eligibility criteria are met
- Claim the correct reclaim percentage
- Keep accurate payroll records
Errors can lead to:
- Under-claiming (losing money)
- Over-claiming (risk of HMRC enquiry)
Practical steps for employers
To stay compliant and maximise your position:
- Review your eligibility for Small Employers’ Relief
- Ensure payroll systems are updated for 2026/27 rates
- Monitor employee eligibility for statutory payments
- Keep clear documentation for all claims
Final thoughts
Statutory payments can seem complex—but they also offer an opportunity to recover costs and support your business.
Making sure you claim the correct amount can have a direct impact on your bottom line.
Need help with payroll or statutory payments?
At Merranti Accounting, we help employers:
- Calculate and process statutory payments correctly
- Maximise reclaim opportunities
- Stay compliant with HMRC rules
If you’re unsure what you can claim—or want to review your payroll setup—get in touch with our team today.
Find more from our newsletter here
