Calculating Employment Payments

Bethan Osborne & Lis Moore

Employment 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?