Statutory paternity pay (SPP) birth and adoption

You can easily process ordinary statutory paternity pay (SPP) by using Sage One Payroll to automatically calculate it for you.

We’ve gathered together everything you need to help you understand the qualifying rules and entitlement, as well as how to record it in Sage One.

You can also find information from GOV.UK.

Qualifying rules

The employee must complete and provide you with one of the following forms, which advises them of the terms and conditions relating to statutory paternity pay (SPP) and paternity leave:

  • SC3 Becoming a birth parent.
  • SC4 Becoming an adoptive parent.
  • SC5 Adopting a child from abroad.

These forms are available from GOV.UK. They must complete the declaration and give it to you at least 28 days before the start of payment as you can’t pay SPP without the declaration.

To qualify, the employee:

  • Must have been continuously employed by you for the 26 weeks up to and including the qualifying week. They must still be employed up to the date of birth or placement of the child.
  • Average weekly earnings (AWE) in the eight weeks before the qualifying week or matching week must be at or above the current national insurance (NI) lower earnings limit (LEL). For the 2016/2017 tax year, this is £112.00.
  • SPP birth – Must be the baby’s biological father, or:
    • Be married or in a civil partnership with the baby’s mother, or
    • Be living with the mother in an enduring family relationship, but isn’t an immediate relative.
  • SPP adoption – Must have a prescribed relationship with the child placed for adoption and the person with whom the child is placed.

The employee should give you at least 28 days notice of when they want SPP to start unless they have a good reason for notifying you late.

If for any reason your employee isn’t entitled to SPP, you must give them form OSPP1 Ordinary Statutory Paternity Pay: non-payment explanation.

Entitlement

Your employee can choose to take one or two consecutive weeks of leave, but not two separate weeks, any time up to eight weeks after the date of birth or placement date. Or, if the baby was born early, up to eight weeks after the Sunday of the week in which the baby was due.

  • They don’t need to qualify for SPP to be able to take paternity leave.
  • For employees who qualify, SPP is payable for two weeks.
  • If the employee meets all qualifying conditions, as an employer, you’re obliged to pay the statutory rate of SPP. Whether you pay any further wages on top of the statutory requirement depends entirely upon the employee’s contract of employment. You’re under no statutory obligation to pay anything further.

To record SPP (birth)

  • 1. Pay Runs tab > click Process Pay Run.
  • 2. Check the pay date is correct > Next.
  • 3. Select the employee > Add Absence.
  • 4. Choose Paternity (Birth) > complete the following details:
Item Description
Child Due Date Enter the date that the child is due to be born on.
Documentation Received If the employee has notified you formally of their intention to take paternity leave using Form SC3, choose Yes.
Qualifying Week The 15th week before the baby is due to be born.
Actual Date of Birth Enter the date the baby is actually born.
Start Date Enter the date the employee wants to start their paternity leave.
End Date Enter the date the employee wants the paternity leave to end. The paternity leave should be for a continuous one or two week period.
Pension Earnings If any payment made to the employee as SPP should be included in pensionable earnings, select this check box.
Qualifying Earnings If any payment made to the employee as SPP should be included in qualifying earnings, select this check box.
  • 5. Click Save.

If there’s not enough information to calculate the average weekly earnings (AWE), this option appears:

Issue Certificate OSPP1 If the employee isn’t entitled to SPP because their earnings are less than £112, click the OSPP1 link and provide them with the form.
Manually set the AWE value If you started using Sage One Payroll part-way through the tax year and there’s not enough history to calculate the average pay, select Manually set the AWE value > enter the average weekly pay.
  • 6. Click Save.
  • 7. Complete the pay run as normal.

To record SPP (adoption)

  • 1. Pay Runs tab > click Process Pay Run.
  • 2. Check the pay date is correct > Next.
  • 3. Select the employee > Add Absence.
  • 4. Choose Paternity (Adoption) > complete the following details:
Item Description
Matching Date Enter the date that the adopted child is matched with the adoptive parents.
Documentation Received If the employee has notified you formally of their intention to take paternity leave using Form SC4 or SC5, choose Yes.
Placement Date Enter the date on which the adopted child is actually placed with the adoptive parents.
Start Date Enter the date the employee wants to start their paternity leave.
End Date Enter the date the employee wants the paternity leave to end. The paternity leave should be for a continuous one or two week period.
Pension Earnings If any payment made to the employee as SPP should be included in pensionable earnings, select this check box.
Qualifying Earnings If any payment made to the employee as SPP should be included in qualifying earnings, select this check box.
  • 5. Click Save.

If there’s not enough information to calculate the average weekly earnings (AWE), this option appears:

Issue Certificate OSPP1 If the employee isn’t entitled to SPP because their earnings are less than £112, click the OSPP1 link and provide them with the form.
Manually set the AWE value If you started using Sage One Payroll part-way through the tax year and there’s not enough history to calculate the average pay, select Manually set the AWE value > enter the average weekly pay.
  • 6. Click Save.
  • 7. Complete the pay run as normal.

Recovering SPP payments from HMRC

All employers can reclaim some, if not all, of the statutory paternity pay (SPP), that they pay to employees.

If you’re classed as a small employer, you can reclaim 100% plus 3% in small employers’ relief. Otherwise, you can reclaim 92%.

Your company normally qualifies for small employers’ relief if your liability for national insurance (NI) contributions was £45,000 or less in the last complete tax year prior to the employee’s qualifying week.

If you’re a new employer or unsure whether you qualify for small employer’s relief, you should check this with HMRC. You can find further information from GOV.UK.

If you reclaim SPP, you can see this amount on your P32 Employer Payment Record.

Let us know what you think...