Parental pay

As an employer of a personal assistant, you may have to deal with situations where your personal assistant needs to take time off due to pregnancy (or their partner’s pregnancy) or because they are adopting a child.

You can find out more about maternity, paternity and adoption leave entitlements in our employment law section. This section explains more about the payments made to employees during periods of leave.

Maternity Pay
Paternity Pay
Adoption Pay
Shared Parental Pay
Recovery of payments
Records
Further help

Maternity Pay

If your employee is expecting a baby, she may 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. She also has a statutory right to a minimum amount of maternity leave.

Whether you have to pay SMP to your personal assistant depends on how long they have worked for you and how much they earn. They will have to provide you with evidence of when the baby is due and give you notice of when they want you to start paying their SMP. Evidence is usually provided by giving you a maternity certificate form MAT B1 which is issued by a doctor or midwife. 

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).

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 must be over £112 a week to qualify for SMP in 2016/17.

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 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 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 £139.58 per week (in 2016/17).

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

You will normally be able to recover some or all of the SMP you pay (see later).

There is detailed guidance on SMP on the GOV.UK website.

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Paternity Pay

If your employee's partner has a child (or adopts a child – see below) they may be entitled to a payment called Statutory Paternity Pay (SPP) to help them take some time off after the child arrives.

As their employer, whether you have to pay them SPP depends on how long they have worked for you, how much they earn and when the baby is due – 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.

The employee can chose to take either one or two consecutive whole weeks leave within 8 weeks of the baby’s birth. The amount of SPP payable during this period is the lower of 90% of average weekly earnings and £139.58 for 2016/17.

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 National Insurance contributions (NIC) from them in the usual way.

You'll normally be able to recover some or all of the SPP you pay (see later).

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

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Adoption Pay

Statutory Adoption Pay (SAP) may be claimed by male or female employees adopting a child aged up to 18. SPP may be claimed by anyone (male or female) who’s the partner of someone adopting a child. Adopting couples must choose which of them will claim SAP and which will claim SPP. 

You'll normally be able to recover some or all of the SAP you pay (see later).

There is detailed guidance on Statutory Adoption Pay on the GOV.UK website.

From 6 April 2015, Statutory Adoption Pay is paid at 90% of salary for the first 6 weeks as per Statutory Maternity Pay and the lower of the 90% average weekly earnings and £139.58 per week (in 2016/17) thereafter.

It is paid in the same way as normal wages (e.g. monthly or weekly). Tax and National Insurance will need to be deducted.

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Shared Parental Pay

Shared Parental Leave (SPL) and Shared Parental Pay (ShPP) apply from 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 so they can take SPL.

Shared Parental Leave (SPL) and Shared Parental Pay (ShPP) is created from the remaining weeks of maternity leave and pay. It means that the remaining balance of leave and parental pay (maximum 50 weeks leave and maximum 37 weeks pay at £139.58 a week 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.

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  weeks entitlement) of Shared Parental Pay. 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 shared parental leave of 20 weeks, then the mother takes a period of shared parental leave of 20 weeks; the mother would be paid statutory maternity pay for 12 weeks, the father would be paid shared parental pay for 20 weeks and finally, the mother would be paid shared parental pay for the first seven weeks of her second leave period.

If, instead, the mother and father decided to take 20 weeks shared parental leave at the same time as each other, that is fine, however they would need to agree how to divide the 27 weeks of parental pay between them.

Please note that if, as here, the father is entitled to statutory shared parental pay for any period of shared parental leave, this will be paid by his employer.

Eligibility

To qualify for Shared Parental Pay a parent must pass the continuity of employment test (see below) and have earned an average salary of the lower earnings limit of £112 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 (see below).

  • 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 Shared Parental Leave 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 above the maternity allowance threshold of £30 week in 13 of the 66 weeks.

Please note that it is possible that only one parent will qualify for Shared Parental Leave and Pay. For example, a self-employed father will not be entitled to take Shared Parental Leave and Pay.  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 here.

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.

Before you get too concerned with Shared Parental Leave and Pay, please remember that the existing rules on maternity leave and pay and paternity leave and pay will remain the ‘default’ position.

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Recovery of payments

Generally, an employer is able to recover 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. If you do not have sufficient deductions available to cover your statutory payments, then you may be able to claim funding from HMRC to cover the balance. You do this by applying to the HMRC Accounts Office for advance funding. See GOV.UK for further information.

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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. 

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Further help

GOV.UK provides calculators to help calculate the amount of SMP, SAP and SPP. If you need help with any statutory schemes, you can phone the Employer helpline.

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

Penalties may apply if the employer fails to make correct 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.

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