Statutory Leave

A RIFT Guide for Small Businesses

When you’re putting people to work, you’re responsible for a lot more than forking over cash for the hours they put in. Being a UK employer means taking care of people as well as business. If your employees get sick or have children, for example, they’re generally entitled to some paid leave.

While they’re away, they still keep hold of their basic employee rights – and may even be able to work up to 10 paid “keeping in touch” days during their leave. They continue to build up any holiday entitlement they’re due, along with any pay rises or other benefits agreed in their contracts.

The main types of statutory leave to know about are:

Holiday entitlement

Most UK employees are allowed 5.6 weeks days of paid holiday each year. For full-time workers, this stacks up to 28 paid days off. Part-time workers, obviously, will usually get less paid holiday since they typically work fewer days per week. On the other hand, paid leave is capped at 28 days, even for people who work more than 5 days per week.

Statutory Maternity and Paternity Pay

The rules for Maternity Pay say your employees can take up to 52 weeks off in total to have a baby. People on Maternity Leave are entitled to up to 39 weeks of pay, which breaks down as:

  • 90% of their average weekly earnings for the first 6 weeks.
  • The lower of either 90% of their average weekly earnings or £145.18 for 33 weeks.

Statutory Paternity Pay is £145.18 a week, or 90% of their average weekly earnings if that’s lower. There may be some additional unpaid leave to allow for antenatal appointments, too.

Any money you get is paid in the same way as your wages, for example monthly or weekly. Tax and National Insurance will be deducted by your employer.

The money is usually paid while you’re on leave. Your employer must confirm the start and end dates for your Paternity Pay when you claim it.

To change the start date you must give your employer 28 days’ notice.

Shared Parental Leave

Shared Parental Leave and Statutory Shared Parental Pay are available to employees when they’ve had or adopted a child.

The idea is that one partner can end their maternity or adoption leave (or pay) early, which can then be divided between the partners in up to 3 blocks. Ending Maternity Leave after 10 weeks, for instance, leaves 42 weeks left of Shared Parental Leave and 29 weeks of pay.

Optional other types of leave

Not all types of paid leave are statutory. As an employer, for example, you might allow paid time off for things like jury duty or family crises. There’s no specific need to offer pay for this type of leave, so you’ve got to weigh up the pros and cons for your business.

Getting help

The good news about statutory pay is that you don’t always have to cough it all up yourself. In many cases, you can claim a big chunk of it back. This counts for:

  • Statutory Maternity Pay.
  • Statutory Paternity Pay.
  • Statutory Shared Parental Pay.
  • Statutory Adoption Pay.

You can claim back up to 92% of these types of paid leave, either through an Employer Payment Summary or by contacting the PAYE Employer’s Office directly at the beginning of the next tax year. You could also send an “SP32” form, depending on how you submit your PAYE information to HMRC. Again, talk to RIFT about the best way to get your money back.

If you qualify for Small Employers’ Relief, you can actually claim even more - up to 103%, in fact. To get this, your Class 1 National Insurance bill must have been under £45,000 in the full tax year before either:

  • The 15th week before the week of the due date.
  • The week your employee found out they’d been matched with a child for adoption.
  • The official notification date, if your employee’s adopting from abroad.

There’s a lot to cope with when you’ve got employees to look after. That’s why RIFT Accounting  always takes the load off your shoulders. We’ll make sure all your responsibilities, worries and workers are taken care of properly, and answer any questions you have along the way.

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