Pay - an overview of obligations

Statutory Maternity, Paternity and Adoption Pay

Employees who become parents, including through adoption, are entitled to a number of payments, including Statutory Maternity, Paternity and Adoption Pay.

To qualify the employee must:

• have worked continuously for you for at least 26 weeks by the 15th week before the expected week of childbirth - or by the date they are notified they have been matched with a child for adoption
• earn more than the lower earnings limit for National Insurance contributions (NICs) - £82 a week for the 2005/06 tax year

For further information you can call the HM Revenue and Customs Employer Helpline on Tel 08457 143 143.

Statutory Maternity Pay (SMP)
SMP is payable at a rate of 90 per cent of average earnings for the first six weeks. The remaining 20 weeks are paid at the standard rate set by the government, which is the lower of £106 per week or 90 per cent of the woman's average weekly earnings. The payments are subject to normal deductions.

You must pay 26 weeks' SMP even if the employee leaves work after the start of the 15th week before the expected week of childbirth. Paid maternity leave will be extended to 39 weeks from April 2007.

Statutory Paternity Pay (SPP)
Working fathers are entitled to up to two weeks' paternity leave within 56 days of the birth, if they:

• have a responsibility for the child's upbringing
• are the child's biological father, or the mother's husband or partner
• have worked continuously for you for at least 26 weeks by the 15th week before the expected week of childbirth - or by the date they are notified they have been matched with a child for adoption
• earn more than the lower earnings limit for National Insurance Contributions (NICs) - £82 a week for the 2005/06 tax year
• have continued working for you until the birth of the child

Paternity leave must be taken in periods of either one week or two continuous weeks. The rate of paternity pay is the same as the standard rate of maternity pay.

Statutory Adoption Pay (SAP)
Employees who adopt a child are entitled to adoption leave for up to 52 weeks - SAP is paid for a maximum of 26 weeks at a flat rate of £106 or 90 per cent of the adopter's average weekly earnings if that is less than the flat rate.

Employees who adopt individually are entitled to adoption leave and pay. Where a couple adopt together, one member of the couple is entitled to adoption leave and pay. The couple can decide which partner will take adoption leave. Paternity leave and pay may be available to the partner of an individual who adopts or to the other person in a couple who are adopting together.

You should keep detailed records of payments and leave periods.

In all cases of Statutory Maternity, Paternity and Adoption pay, you can claim most or all of this money back from the income tax and NICs paid to HM Revenue & Customs, who can also give advance funding if needed.

See our guide on maternity, paternity & adoption - an overview.

Subjects covered in this guide

• Introduction
• Issuing pay statements
• Statutory Maternity, Paternity and Adoption Pay
• Statutory Sick Pay
• Guarantee pay
• Complying with the National Minimum Wage
• Rates and calculation of the National Minimum Wage
• Paying workers holiday pay
• Making deductions
• Calculating final pay