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How Zoho Payroll handles statutory maternity and parental leave pay
First, lets start by answering this simple question: Why statutory pay matters for employers?
An employee tells you she is pregnant. Congratulations are in order and so is a checklist. From that moment, you have a series of legal obligations around pay, leave, and record-keeping that run for the better part of a year. Get them wrong and you are looking at HMRC compliance issues, potential employment tribunal claims, and an employee who has lost trust in your payroll process.
Statutory pay is not optional. Every employer in the UK regardless of size must pay eligible employees their statutory entitlements during periods of maternity, paternity, adoption, parental, and sickness absence. You pay it through payroll, and you reclaim most of it back from HMRC.
Zoho Payroll is HMRC compliant software that handles all UK statutory pay types automatically: Statutory Maternity Pay (SMP), Statutory Paternity Pay (SPP), Statutory Adoption Pay (SAP), Shared Parental Pay (ShPP), Statutory Neonatal Care Pay (SNCP), and Statutory Sick Pay (SSP).
So let's get into it.
Statutory Maternity Pay
Statutory Maternity Pay (SMP) is the minimum pay an eligible employee receives during maternity leave.
Statutory Maternity Leave lasts up to 52 weeks. Out of this, SMP covers up to 39 weeks, leaving the final 13 weeks unpaid (unless enhanced contractual/occupational maternity pay is provided by the employer)
Rates for 2026/27
Period | Rate |
First 6 weeks | 90% of average weekly earnings (AWE), uncapped |
Remaining 33 weeks | £194.32 per week or 90% of AWE, whichever is lower |
Eligibility
To qualify for SMP, the employee must:
Continuous Employment Rule: The employee must have at least 26 weeks of continuous service with you by the end of the 15th week before the expected week of childbirth (the qualifying week).
Have average weekly earnings of at least £129 (the Lower Earnings Limit for 2026/27) in the eight weeks before the qualifying week
Have Average Weekly Earnings (AWE) of at least £129.00 per week (this is the Lower Earnings Limit (LEL)) during the 8-week relevant period leading up to the qualifying week.
Notice Period & Evidence: The employee must provide at least 28 days' notice of their SMP start date and present a valid MAT B1 form (issued no earlier than 20 weeks before the expected week of childbirth).
If an employee does not qualify for SMP, you must give them form SMP1 within 7 days of making that decision. They may then claim Maternity Allowance from the Department for Work and Pensions (DWP) instead.
SMP is treated as earnings and is subject to standard PAYE Income Tax and Class 1 National Insurance contributions.
Statutory Paternity Pay
Statutory Paternity Pay (SPP) is paid to eligible employees taking paternity leave following the birth or adoption of a child. It covers up to two weeks of leave.
From 6 April 2026, paternity leave became a day-one employment right, meaning employees no longer need 26 weeks of service to take the leave itself. However, the 26-week service requirement still applies for the right to receive SPP.
Rate for 2026/27
£194.32 per week or 90% of average weekly earnings (AWE), whichever is lower.
Other statutory pay types
Statutory Adoption Pay
Statutory Adoption Pay (SAP) mirrors the SMP structure. It is paid to eligible employees who are adopting a child, for up to 39 weeks.
Rates for 2026/27
Period | Rate |
First 6 weeks | 90% of AWE |
Remaining 33 weeks | £194.32 per week or 90% of AWE, whichever is lower |
The eligibility conditions for SAP are the same as for SMP: 26 weeks of continuous service and average weekly earnings above the Lower Earnings Limit of £129.
Shared Parental Pay
Shared Parental Pay (ShPP) allows eligible parents to share up to 50 weeks of leave and up to 37 weeks of pay between them after a birth or adoption minus any weeks the mother/primary adopter spends on maternity/adoption leave and pay.
Rate for 2026/27
£194.32 per week or 90% of average weekly earnings (AWE), whichever is lower, for up to 37 weeks.
Both parents must individually meet the eligibility criteria, which includes the 26-week service requirement and the minimum earnings threshold.
Statutory Neonatal Care Pay
Statutory Neonatal Care Pay (SNCP) is the newest addition to the UK's statutory pay framework, introduced from 6 April 2025 under the Neonatal Care (Leave and Pay) Act 2023. It applies to parents whose baby requires neonatal care for at least seven consecutive days within 28 days of birth.
SNCP is additional leave and pay, on top of any other statutory entitlement such as SMP or SPP. It is not a substitute for maternity or paternity leave.
Rate for 2026/27
£194.32 per week or 90% of average weekly earnings (AWE), whichever is lower, for up to 12 weeks. [Source: GOV.UK, Rates and thresholds for employers 2026 to 2027]
Key points for employers
Neonatal Care Leave (NCL) itself is a day-one right, but SNCP requires 26 weeks of continuous service and average weekly earnings above the Lower Earnings Limit (£129 per week in 2026/27)
Leave can be taken while the child is in neonatal care (Tier 1) or after discharge, up to 68 weeks from birth (Tier 2)
Employees accrue one week of SNCP for every seven days the child spends in neonatal care, up to a maximum of 12 weeks
SNCP only applies to children born on or after 6 April 2025
Statutory Sick Pay
Statutory Sick Pay (SSP) is paid to eligible employees who are off work due to illness. From 6 April 2026, SSP became a day-one right under the Employment Rights Act 2025, removing the previous three waiting days and the Lower Earnings Limit requirement.
Rate for 2026/27
£123.25 per week or 80% of average weekly earnings (AWE), whichever is lower, for up to 28 weeks. The 80% cap ensures that low earners do not receive more in SSP than they normally earn.
Unlike parental pay types, SSP cannot be reclaimed from HMRC and is a direct cost to the business.
Reclaiming statutory payments from HMRC
Employers pay statutory parental pay through payroll and reclaim the amounts from HMRC by offsetting them against monthly PAYE and NI liabilities. The recovery rates for 2026/27 are:
Employer type | Recovery rate |
Standard employers | 92% of SMP, SPP, SAP, ShPP, SNCP paid |
Small employers (Small Employers' Relief) | 109% of SMP, SPP, SAP, ShPP, SNCP paid |
Small Employers' Relief (SER) applies to employers whose total Class 1 NI liability in the previous tax year was £45,000 or less.
The 109% rate reimburses the full statutory amount plus a 9% uplift to offset the employer NI costs on those payments.
Note that with the higher employer NI rate now in force, some businesses that qualified for SER in 2025/26 may have crossed the £45,000 threshold in 2026/27. It is worth checking your previous year's liability before assuming eligibility.
Reclaims are made through your Employer Payment Summary (EPS) submission to HMRC. Zoho Payroll calculates and includes recoverable amounts automatically in your EPS.
In summary
Beyond calculating and paying statutory amounts, Zoho Payroll handles the statutory leave management.
Maternity, paternity, adoption, and sick leave are managed within the same system as your regular payroll
Statutory pay is calculated in context and payslips reflect the correct amounts automatically.
Note: Zoho Payroll is HMRC compliant. All statutory pay types SMP, SPP, SAP, ShPP, SNCP, and SSP are handled automatically, with the correct rates applied for the current tax year and recoverable amounts included in your EPS submission.
The way forward
Statutory pay is complex to calculate manually and easy to get wrong. The rates change every April, eligibility rules vary by pay type, and the administrative burden notice requirements, form issuance, HMRC reclaims adds up quickly.
Checklist:
Confirm eligibility for each statutory pay type when an employee notifies you of leave
Issue the relevant form (SMP1, SPP1, etc.) within the required timeframe if the employee does not qualify
Ensure your payroll software is applying 2026/27 rates: SMP/SPP/SAP/ShPP/SNCP at £194.32 per week; SSP at £123.25 per week or 80% of AWE
Check whether you qualify for Small Employers' Relief (Class 1 NI liability below £45,000 in the previous tax year)
Reclaim eligible statutory payments via EPS each month
Keep records of all statutory pay periods, notices received, and forms issued
About Zoho Payroll
Zoho Payroll is part of Zoho's suite of 55+ integrated business applications, trusted by over 150 million users across 150+ countries. As HMRC compliant payroll software for employers in the UK, Zoho Payroll handles all statutory pay types, leave management, PAYE calculations, National Insurance contributions, and RTI submissions automatically every pay run.
Frequently Asked Questions
Does Zoho Payroll handle statutory maternity pay automatically?
Yes. Zoho Payroll calculates SMP automatically based on the employee's average weekly earnings and the current statutory rate. It applies the correct rate for each week of the pay period and includes recoverable amounts in your EPS submission to HMRC.
What is the SMP rate for 2026/27?
The first six weeks of SMP are paid at 90% of the employee's average weekly earnings with no cap. The remaining 33 weeks are paid at £194.32 per week or 90% of average weekly earnings, whichever is lower.
What is Statutory Neonatal Care Pay?
SNCP is a statutory entitlement introduced from 6 April 2025 for parents whose baby requires at least seven consecutive days of neonatal care within 28 days of birth. It provides up to 12 weeks of pay at £194.32 per week (or 90% of AWE if lower) and is in addition to any other statutory leave entitlement such as SMP or SPP.
Can I reclaim statutory maternity pay from HMRC?
Yes. Standard employers can reclaim 92% of SMP paid. Employers eligible for Small Employers' Relief (those with a Class 1 NI liability of £45,000 or less in the previous tax year) can reclaim 109%. Reclaims are made through the EPS submission to HMRC.
What changed with SSP from April 2026?
From 6 April 2026, SSP became a day-one right under the Employment Rights Act 2025. The previous three-day waiting period and Lower Earnings Limit were removed. The 2026/27 rate is £123.25 per week or 80% of average weekly earnings, whichever is lower. Unlike parental pay, SSP cannot be reclaimed from HMRC.
What is the difference between Shared Parental Pay and Statutory Paternity Pay?
SPP covers up to two weeks of leave for the partner of the person who gave birth or adopted. ShPP allows eligible parents to share up to 37 weeks of the pay period between them, giving families more flexibility over how care is divided in the first year.