Calculating Employment Payments

Bethan Osborne & Lis MooreEmployment Advisors

What are Statutory Payments• Statutory Sick Pay (SSP)• Statutory Parental Pay (SMP/SPP/SAP)• Statutory Redundancy Pay (SRP)• Holiday Pay

SSP - eligibility

• Must be an employee• Must have earned over the Lower

Earnings limit (2014-15 £111 per week)• Must be sick for 4 days or more in a row

(PIW) and notified the employer• Not paid for the first 3 days of illness (WD)• May be linked to another PIW• Maximum of 28 weeks

SSP

• £87.75 per week (2014-15)• No need to operate SSP if Occupational

Scheme (OSP) pays the same or better• Green Book terms more than SSP• Can run SSP & OSP concurrently• If SSP paid > 13% of total NIC for month can

reclaim until 6th April 2014• If PAYE & NIC less than SSP – claim HMRC

funding

SMP - eligibility

• Must be an employee• Must have earned over the Lower

Earnings limit (2014-15 £111 per week)• 26 weeks employment by Qualifying Week

(QW)• Give 28 days notice• Provide medical evidence (MATB1)

SMP

• QW = 15th week before the due date• 25 weeks pregnant• LOS 26 weeks by QW therefore needs to

have worked for you for a week before getting pregnant!

• If not eligible can claim Maternity Allowance

SMP

• 39 weeks paid vs 52 weeks leave• Other benefits continue to accrue –

holidays, SLCC membership, contractual increments

• 6 weeks at 90% of pay at QW• 33 weeks at £138.18 (2014-15)• 10 Keep In Touch (KIT) days

SMP & Green Book

• Green Book more generous• <1 year of service = SMP only• >1 year of service and returning to work

for at least 3 months = 6 weeks at 90% followed by 12 weeks at 50% then SMP for 15 weeks

SAP

• Must be an employee• Must have earned over the Lower Earnings

limit (2014-15 £111 per week)• 26 weeks employment on Matching Date (MD)• 28 days notice for pay & 7 days notice to take

leave• Provide evidence of matching and official

notification from local authority

SAP

• 39 weeks paid leave vs 52 weeks adoption leave

• £138.18 per week or 90% of pay if lower• Available to individuals or one of a couple

adopting a child• Other member of couple can claim SPP• Recovery and funding as for SMP• No Green Book enhancements

SPP

• 2 types Ordinary & Additional• Applies to births and adoptions• Up to 2 weeks OSPP – must be

consecutive• In 8 weeks following birth or from day of

placing • Up to 20 weeks ASPP from 20 weeks after

birth or placement

SPP - eligibility

• Must be an employee• Must have earned over the Lower

Earnings Limit (2014-15 £111 per week)• 26 weeks employment at QW or MD• Still employed when ASPP starts• At least 2 weeks SMP or SAP remaining• Partner has returned to work

SPP

• £138.18 per week• Recovery and funding rules the same as

SMP & SAP• Evidence needed – signed declarations by

both parents for ASPP• HMRC pro-formas • Green Book – 5 days Maternity Support

Leave

Redundancy

• Must be an employee• Must meet the statutory definition of

redundancy• Min 2 years completed service• Under 22 half a week’s pay per year • 22-41 a week’s pay per year• Over 41 one and a half week’s pay per

year

Redundancy

• Tax free up to £30,000• Capped at £450 per week• Notice pay per contract or statutory notice• Continuous service from another authority• No recovery or funding from HMRC!

Holidays

• Statutory entitlement • Min 5.6 weeks paid leave per year or 28

days• Can include bank holidays• Pro – rata for part timers• Green Book 21 days plus bank holidays

plus 2 extra statutory days increasing by 5 after 5 years service.

Holidays

• Continue to accrue during SMP/SPP/SAP• Continue to accrue during sick leave• Carry forward of entitlement above 4

weeks permitted but should be taken as soon as practical

• Usual carry forward not more than 5 days• Untaken leave should be paid on

termination of employment

Part Timer Holidays

• Convert to hours e.g employee works 10 hours per week and gets statutory minimum leave so multiply hours by 5.6 = 56 hours paid leave including bank holidays.

• Green Book more complicated calculation work out full time annual leave in hours (236.8) and then divide by 37 and multiply by hours of work

Part Timer Holidays

• For each day of leave deduct normal working hours

• If a bank holiday or extra statutory day falls on a working day deduct normal hours

• Balance is the hours they can book

How to pro-rata pay?

• Hourly Pay - full time equivalent divided by 52 divided by 37

• Specified in Green Book• Then multiply by number of hours e.g £21,734(SCP25) /52/37 = £11.30 per

hour times contractual hours 20 per week = £225.93 per week

• Monthly value - multiply by 52 divide by 12

Test Your Knowledge

• In pairs do the exercise on the sheet

• Use a calculator or show your workings

More Information

• HMRC guidance on data stick• SLCC Advice Notes• CALC/SLCC Advisory Service• Annual Leave Calculator on website• gov.uk website • HMRC website (includes calculators)

Any Questions?