Statutory Paternity Pay: Calculation and Eligibility

Statutory Paternity Pay (SPP) is paid by employers to eligible employees taking paternity leave. Understanding how to calculate it correctly ensures compliance and helps you recover payments from HMRC.

Current SPP Rates (2024-25)

Period	Rate
2024-25	£184.03 per week OR 90% of AWE (whichever is lower)
2025-26 (from April 2025)	£187.18 per week OR 90% of AWE (whichever is lower)

Duration: Up to 2 weeks.

Who Qualifies for SPP?

Employment Conditions

The employee must:

• Be an employee (not a worker or self-employed)
• Have 26 weeks' continuous service by the end of the qualifying week
• Still be employed in the qualifying week
• Give correct notice
• Provide a self-declaration

The Qualifying Week

The qualifying week is the 15th week before the expected week of childbirth (EWC).

Example: Baby due 10 June 2025.

Expected week of childbirth: Week beginning Monday 9 June.

Count back 15 weeks: Qualifying week starts Monday 24 February 2025.

26-week service requirement: Employee must have worked continuously since at least 26 weeks before the end of the qualifying week (approximately early September 2024).

Earnings Conditions

Average weekly earnings must be at least £123 per week (the Lower Earnings Limit for 2024-25).

Relationship Conditions

The employee must be:

• The baby's biological father, OR
• The mother's spouse, civil partner, or partner (including same-sex partner), OR
• Intended parent in a surrogacy arrangement

And: Have or expect to have main responsibility for the child's upbringing (along with the mother).

Calculating Average Weekly Earnings

The Relevant Period

Use the 8-week period ending with the last pay day before the Saturday of the qualifying week.

Step-by-Step Calculation

Step 1: Identify the Qualifying Week

15th week before the expected week of childbirth.

Step 2: Find the Relevant Period

8 weeks ending with the last pay day on or before the Saturday of the qualifying week.

Step 3: Total Earnings

Add up gross earnings (before tax/NI deductions) in those 8 weeks.

Include:

• Basic pay
• Overtime
• Bonuses
• Commission
• Statutory payments (SSP, SMP if applicable)

Exclude:

• Expenses
• Benefits in kind
• Pension contributions

Step 4: Calculate Average

Total earnings ÷ 8 = Average weekly earnings (AWE)

Example Calculation

Scenario:

• Baby due: 15 July 2025
• Expected week of childbirth: Week beginning 14 July
• Qualifying week: 15 weeks back = week beginning 31 March 2025
• Last pay day before Saturday 5 April: Friday 28 March
• Relevant period: 8 weeks ending 28 March (1 Feb - 28 March)

Earnings over 8 weeks:

Total: £4,200
Average: £4,200 ÷ 8 = £525/week

SPP rate:

Lower of: £525 × 90% = £472.50 OR £184.03
SPP = £184.03/week

Monthly-Paid Employees

If paid monthly, the calculation is slightly different.

Relevant period: 2 months ending with the last pay day before the end of the qualifying week.

Calculation:

Total earnings in 2 months ÷ 2 = Monthly average
Monthly average × 12 ÷ 52 = Weekly average

Example: Total over 2 months: £5,000

£5,000 ÷ 2 = £2,500/month
£2,500 × 12 ÷ 52 = £576.92/week

SPP rate:

Lower of: £576.92 × 90% = £519.23 OR £184.03
SPP = £184.03/week

When SPP Is Paid

Leave Timing

Paternity leave can be taken:

• From the date of birth
• Up to 52 weeks after birth (from April 2024 changes)

Must be taken in complete weeks:

• 1 week, or
• 2 weeks (consecutive or non-consecutive from April 2024)

Payment Timing

SPP is paid for the weeks of paternity leave taken (maximum 2 weeks).

Payment dates: On normal payroll dates during the leave period.

Notice Requirements

When to Notify

By the end of the 15th week before EWC (the qualifying week), the employee must tell you:

• Date baby is due
• When they want to take paternity leave
• How much leave (1 or 2 weeks)

Can Change Later

They can change the start date with 28 days' notice (or as soon as reasonably practicable if the baby arrives early).

Form SC3

Employees should complete form SC3 (self-certification for SPP).

Alternatively: You can use your own form/declaration as long as it captures:

• Employee's name
• Expected week of childbirth
• Date they want leave to start
• Declaration of entitlement

If They Don't Qualify

Form SPP1

If an employee doesn't qualify for SPP, you must:

• Give them form SPP1 within 28 days of their request (or within 28 days of the birth if no request made)
• Explain why they don't qualify

Why Someone Might Not Qualify

• Earnings below £123/week average
• Less than 26 weeks' service
• Not an employee
• Didn't give correct notice
• Not eligible relationship to child

What They Can Do Instead

If they don't qualify for SPP, they may be able to claim:

• Universal Credit (if low income)
• Child Benefit
• Other means-tested benefits

Recovering SPP from HMRC

Recovery Rates

Employer Type	Recovery Rate
Most employers	92%
Small employers (Class 1 NI ≤ £45,000 in previous tax year)	103% (92% + 3% compensation)

How to Recover

Reduce your PAYE payment to HMRC by the amount of SPP paid (and recovery rate).

Example:

• SPP paid this month: £500
• Employer is small employer (103% recovery)
• Recover: £500 × 103% = £515

Deduct £515 from PAYE payment.

Recording Recovery

Show SPP and recovery on:

• Full Payment Submission (FPS) to HMRC
• Payroll records
• Employee payslip (show SPP separately)

SPP and Other Payments

Company Sick Pay

If an employee is off sick during paternity leave, they're not entitled to company sick pay during the paternity leave period (SPP applies instead).

Annual Leave

Annual leave continues to accrue during paternity leave.

Many employees take some annual leave alongside paternity leave to extend time off.

Pension Contributions

Employer pension contributions should continue during paid paternity leave, based on normal salary (not SPP).

Check your pension scheme rules.

Other Benefits

Non-cash benefits (car, phone, etc.) usually continue during paternity leave.

Paternity Leave and Pay After April 2024 Changes

More Flexible Timing

From April 2024, paternity leave can be taken:

• As 2 separate weeks (not necessarily consecutive)
• Any time within 52 weeks of birth (previously 56 days)

Example:

• Take 1 week immediately after birth
• Take second week 6 months later

Notice Requirements

Must give 28 days' notice before each period of leave.

If circumstances change (e.g., mother's health), less notice may be acceptable.

Common Calculation Mistakes

Mistake 1: Wrong Relevant Period

Issue: Using 8 weeks before the birth, rather than 8 weeks ending with the pay day before the qualifying week.

Correction: Always identify the qualifying week first, then count back from the last pay day before it ends.

Mistake 2: Forgetting 90% Cap

Issue: Paying full average earnings when they exceed the SPP rate.

Correction: SPP is the lower of 90% AWE or £184.03.

Example: AWE = £400/week. 90% = £360.

Pay: £184.03 (not £360).

Mistake 3: Monthly-Paid Calculation Error

Issue: Not converting monthly earnings correctly to weekly equivalent.

Correction: Use formula: (Monthly average × 12) ÷ 52.

Mistake 4: Including Wrong Elements in Earnings

Issue: Including expenses or benefits in kind in average weekly earnings.

Correction: Only include actual cash earnings (wages, salary, overtime, bonuses).

Mistake 5: Not Checking Service Requirement

Issue: Paying SPP without checking 26 weeks' continuous service.

Correction: Always verify employment start date against qualifying week.

Enhanced Paternity Pay

Company Schemes

Many employers offer enhanced paternity pay above the statutory minimum.

Common schemes:

• Full pay for 2 weeks
• Combination (e.g., 1 week full pay, 1 week SPP)

This is contractual, not statutory.

Tax and NI

Enhanced paternity pay is subject to:

• PAYE tax
• National Insurance
• Pension contributions

Only statutory SPP can be recovered from HMRC. Enhanced top-up cannot.

Record Keeping

What to Keep

For each employee taking paternity leave/pay:

• Copy of SC3 or equivalent declaration
• Calculation of average weekly earnings
• Relevant period dates
• SPP amount paid
• Dates of paternity leave
• Recovery amounts

Keep for at least 3 years after the tax year they relate to.

HMRC Inspections

HMRC may inspect your SPP records as part of PAYE compliance checks.

Be ready to show:

• Earnings calculations
• Service records
• Notice given by employee
• Payment dates and amounts

Paternity Pay for Adoption

Statutory Adoption Pay (SAP)

Partners of adopters can claim Statutory Paternity Pay (adoption) under similar rules.

Same rates: £184.03/week or 90% AWE.

Same calculation method.

Timing

From date of placement (or within 52 weeks of placement from April 2024).

Surrogacy

Intended Parents

Intended parents in surrogacy arrangements can claim SPP if they meet eligibility conditions.

Relevant date: Expected week of birth (not placement).

Multiple Births

Twins, Triplets, Etc.

SPP entitlement is the same whether one baby or multiple babies are born.

2 weeks' leave and pay maximum, regardless of number of babies.

Premature Birth

If Baby Arrives Early

If the baby is born before the qualifying week, the qualifying week is the week before the birth.

Recalculate relevant period from that adjusted qualifying week.

Notice Requirements

If the baby arrives early, the employee should notify you as soon as reasonably practicable.

You cannot refuse leave on grounds of insufficient notice in this situation.

Stillbirth

SPP Entitlement

If a baby is stillborn after 24 weeks of pregnancy, the employee is still entitled to SPP.

Same rules apply as for a live birth.

Sensitivity

Handle with compassion. Ensure HR and payroll staff are aware and supportive.

Statutory Rights Summary

• Leave: 1 or 2 weeks (from April 2024, can be non-consecutive, within 52 weeks of birth)
• Pay: £184.03/week or 90% AWE for up to 2 weeks
• Notice: 15th week before EWC (can change with 28 days' notice)
• Protection: Cannot be dismissed or treated unfavorably for taking paternity leave
• Job: Right to return to same job after 2 weeks or less

Practical Tips

Tip 1: Check Eligibility Early

When an employee announces their partner's pregnancy, check:

• Will they have 26 weeks' service by the qualifying week?
• Do earnings meet Lower Earnings Limit?

Tip 2: Provide Information

Give employees clear information about:

• SPP rates
• How to notify you (SC3 form)
• Deadline for notice
• Flexibility of timing (April 2024 rules)

Tip 3: Use Payroll Software

Most payroll systems calculate SPP automatically and handle HMRC recovery.

Ensure: Software is updated for April 2024 changes (flexible timing).

Tip 4: Plan Cover

When notified of paternity leave, plan work cover:

• Who will handle their responsibilities?
• Handover arrangements

Tip 5: Document Everything

Keep clear records of:

• Notice received
• Eligibility check
• Earnings calculation
• SPP paid
• Recovery claimed

Key Takeaways

• SPP rate: £184.03/week or 90% of average weekly earnings (whichever is lower)
• Duration: Up to 2 weeks
• Eligibility: 26 weeks' service, earnings above £123/week, correct notice
• Calculation: 8-week average (or 2-month for monthly-paid)
• Recovery: 92% (or 103% for small employers)
• Flexible timing (April 2024+): Can split weeks, take up to 52 weeks after birth
• Records: Keep for 3 years minimum

Getting SPP calculations right ensures compliance, helps employees financially, and allows you to recover payments from HMRC efficiently.