PAYE72075 | PAYE operation: payments for PAYE purposes: statutory payments

The following payments count as earnings for tax purposes

• Statutory Sick Pay (SSP)

• Statutory Maternity Pay (SMP)

• Statutory Adoption Pay (SAP)

• Statutory Paternity Pay (SPP) (up to 2010 to2011 and from 2015 to 2016)

• Ordinary Statutory Paternity Pay (OSPP) (from 2011 to 2012 up to 2014 to 2015)

• Additional Statutory Paternity Pay (ASPP) (from 2011 to2012 up to 2015 to 2016)

• Statutory Shared Parental Pay (ShPP) (from 2015 to 2016)

• Statutory Parental Bereavement Pay (SPBP) (from 2020 to 2021)

• Statutory Neonatal Care Pay (SNCP) (from 2025 to 2026)

An employer paying any of the statutory payments to an employee must

• Include the payments with other pay on the deductions working sheet and operate PAYE on the total amount

• Include the payments on form P45 if the employee leaves the employment

If the employer makes this type of payment for an employee who has already left, the employer must

• Record 0T W1/M1 as the amended code on the employee's pay record where the employee is liable at the England and Northern Ireland income tax rates, or

• Record S0T W1/M1 as the amended code where the employee is liable at the Scottish income tax rate(s), or

• C0T W1/M1 as the amended code where the employee is liable at the Welsh income tax rate(s), and

• Submit details of the payment and tax deducted on an FPS with a leaving date

Further information about Scottish Income Tax is given at PAYE100035 and further information about Welsh Income Tax is given at PAYE100040.

The employer must not issue an amended or additional P45 to the employee

If you receive any enquiries about statutory payments, refer the caller to the Employer Helpline.

Statutory payments paid by insolvency practitioner

The PAYE treatment of statutory payments is the same whether an employer or an insolvency practitioner (for example, a liquidator) pays it.

Top of page

Statutory payments paid by HMRC

No tax will be deducted and HMRC will provide the individual with a certificate (SP710) and send a certificate (SP711) to the tax office.

When you receive a copy of the certificate from the individual or on receipt of the form from the Statutory Payments Disputes Team (SPDT) you should

• Ensure that if you code out a statutory payment you describe it as ‘Other earnings’ and update income, allowances, benefits and deductions for CY+1 with zero ‘Other earnings’. (Refer to Action guide tax80002 for more information)

• Ensure the copy of the certificate is scanned and stored on the DMS system where users can then search for the certificate using either the NINO search or by using linked items if there is another scanned image from the same customer