Every UK employer running payroll has statutory pay obligations, legally mandated minimum payments for sickness, childbirth, adoption, paternity, shared parental leave, and bereavement. Getting these wrong exposes you to employment tribunal claims and HMRC penalties. This guide covers the 2026/27 rates, who qualifies, how to recover from HMRC, and the traps that trip up employers most often.
The five statutory payments
| Payment | 2026/27 Rate | Duration | Recoverable? |
|---|---|---|---|
| SSP | £116.75/week | Up to 28 weeks | No |
| SMP | 90% for 6 wks, then £187.18/week | 39 weeks | 92-103% |
| SPP | £187.18/week (or 90% if lower) | 2 weeks | 92-103% |
| ShPP | £187.18/week (or 90% if lower) | Up to 37 weeks shared | 92-103% |
| SPBP | £187.18/week (or 90% if lower) | 2 weeks | 92-103% |
SPBP is Statutory Parental Bereavement Pay, introduced in April 2020 for the loss of a child under 18 or a stillbirth after 24 weeks. All family-related statutory payments share the same weekly rate of £187.18 for 2026/27.
Statutory Sick Pay (SSP)
SSP is payable from the fourth consecutive qualifying day of sickness absence. The first three "waiting days" are unpaid unless your employment contract says otherwise. To qualify, an employee must:
- -earn on average at least the Lower Earnings Limit (£125 per week in 2026/27) over the relevant 8-week period before absence;
- -have been sick for four or more consecutive days, including non-working days;
- -give you notice of the absence within your reasonable deadline (or 7 days if you haven't specified one).
The linked-periods rule
Two absences separated by 8 weeks or less count as a single period for SSP. That means the waiting days are not reset, if an employee was off for 5 days in January and returns in February for another 3 days, you skip the waiting days second time around. Getting this wrong is one of the most common SSP overpayment errors we correct during onboarding.
SSP is not recoverable from HMRC. The Percentage Threshold Scheme that once allowed recovery was abolished in 2014. An employee on SSP is therefore a direct cost against your P&L until they return or SSP runs out at 28 weeks, at which point responsibility typically transfers to Universal Credit or Employment and Support Allowance via form SSP1.
Statutory Maternity Pay (SMP)
SMP runs for up to 39 weeks in two tiers:
- -First 6 weeks, 90% of average weekly earnings (no cap).
- -Remaining 33 weeks, the lower of £187.18 per week or 90% of average weekly earnings.
To qualify, the employee must have 26 weeks' continuous service by the end of the "qualifying week" (the 15th week before the expected week of childbirth) and have earned at least the Lower Earnings Limit on average. SMP starts no earlier than 11 weeks before the expected week of childbirth; statutory maternity leave itself is 52 weeks regardless of whether SMP or occupational maternity pay applies.
Recovering SMP from HMRC
Small employers recover 103% of SMP paid (Small Employers' Relief). The 3% uplift is compensation for administration. Larger employers recover 92%. The threshold is measured on Class 1 NI liability in the tax year ending before the Saturday of the qualifying week, if that was under £45,000, small employer status applies.
Recovery is claimed via the Employer Payment Summary (EPS) and offsets your monthly PAYE liability. Cashflow rarely suffers as a result: in most months, SMP recovery reduces the amount you transfer to HMRC rather than generating a standalone refund.
Statutory Paternity Pay (SPP)
From April 2024, paternity leave rules became more flexible. Employees can now take two non-consecutive weeks of paternity leave at any point within 52 weeks of the birth, rather than a single block within 8 weeks. SPP is payable at £187.18/week (or 90% of average weekly earnings if lower) for the 2 weeks taken. Eligibility requires 26 weeks' continuous service by the qualifying week.
Shared Parental Pay (ShPP)
ShPP allows parents to share up to 50 weeks of leave and 37 weeks of pay between them (after the mother's compulsory 2-week post-birth leave). Both parents must give at least 8 weeks' notice using the ShPP1 form, and the mother must have "curtailed" her SMP. ShPP is the least-claimed statutory payment in the UK, uptake is under 2%, but the notice, payment and recovery mechanics still bind employers who receive a request.
Statutory Parental Bereavement Pay (SPBP)
Introduced in April 2020, SPBP provides 2 weeks of statutory pay to parents following the death of a child under 18 or a stillbirth after 24 weeks of pregnancy. Unlike other family-related pay, there is no minimum service requirement for leave (the statutory right starts from day one of employment), though SPBP itself requires the usual 26 weeks' continuous service. The leave must be taken within 56 weeks of the bereavement and can be split into two separate one-week blocks.
How recovery works through payroll
All family-related statutory pay recoveries run through the Employer Payment Summary (EPS), which is submitted by the 19th of the following tax month. The sequence in a typical pay run is:
- The gross statutory pay is posted to the employee in the Full Payment Submission (FPS) in the normal way.
- PAYE and NI are deducted from the employee's statutory pay as if it were regular earnings.
- The employer records the recovery (92% or 103%) on the EPS for that tax month.
- The monthly PAYE liability is reduced by the recovery amount before the 22nd-of-month payment deadline.
SSP has no EPS line because it is not recoverable. BrightPay, Xero Payroll and Sage all calculate and post the recoveries automatically once the absence is recorded correctly in the pay run.
Advance Funding for Small Cashflows
If your monthly PAYE liability is lower than the statutory pay you need to fund (common for very small employers during maternity leave), you can apply to HMRC for advance funding using form SP32. Approval typically takes 4-6 weeks, so plan ahead: start the application as soon as the MATB1 certificate arrives.
Common mistakes
- 1.Paying SSP from day one. The first three qualifying days are waiting days and unpaid under SSP. Paying them is a kindness but not a statutory obligation, and the cost is not recoverable.
- 2.Using the wrong average earnings period. For SMP, average weekly earnings are calculated over the 8 weeks ending with the last payday before the qualifying week, not the 8 weeks before maternity leave starts. Getting this wrong typically understates entitlement.
- 3.Forgetting the EPS when statutory pay is the only line. If an employee is on full SMP and no one else is paid that month, the FPS still runs but the EPS matters, without it HMRC doesn't know about the recovery and will chase the full PAYE bill.
- 4.Missing Small Employers' Relief. If the prior tax year's NI liability was under £45,000 you get 103% recovery, not 92%. Payroll software needs the prior year total configured explicitly, it is not inferred.