STATUTORY ADOPTION PAY (SAP)
| Name | Data code |
| SAP Eligibility Indicator | M000 |
| Date of Matching Certificate | M010 |
| Expected Date of Placement of Child | M013 |
| Actual Date of Placement of Child | M014 |
| Start Date of Adoption Pay Period (APP) | M020 |
| Number of Weeks SAP Remaining to be Paid | M240 |
| Number of Weeks SAP Paid to Date | M260 |
| Number of Weeks SAP to be Paid for Payroll Adjustment | M265 |
| Number of Weeks Excluded from SAP this Period | M270 |
| Replace Average Earnings | M703 |
| Weekly SAP ’Earnings Related’ Rate | M704 |
| SAP Increase this Payrun Only | M721 |
| SAP Decrease this Payrun Only | M722 |
| Positive Pre-Determined SAP this Payrun Only | M725 |
| Negative Pre-Determined SAP this Payrun Only | M726 |
| SAP Total to Date Paid in Current Year | M728 |
Statutory Adoption Pay (SAP) and Adoption Leave is available to adoptive parents where a certificate matching them with a child for adoption is issued. However, SAP and Paternity leave can only be paid when the child has been placed and this must be on or after 6th April 2003.
An employee (male or female) is eligible for SAP if the following are true:
- The employee is the partner of someone adopting a child on their own
- The employee is adopting a child with their partner
NOTE. Until 2004, only married couples can adopt a child together.
- The employee has been employed continuously for 26 weeks up to and including the Matching Week (MW)
- Average weekly earnings over the 8 weeks up to and including the MW must be equal to, or more than, the LEL
The employee is entitled to a maximum of 39 weeks SAP , 6 at a higher rate and a further 33 weeks paid at the ‘standard’ rate.
There is a further entitlement to 13 weeks unpaid adoption leave.
SAP can start up to two weeks before the child is placed and must not start later than the date the child is placed. SAP can start on any day of the week.
SDWorx-pay checks the length of time of employment with the company, and calculates the employee’s average pay to determine the SAP rate.
To pay SAP to an employee, Payroll Active requires you to enter one or both of; the date of expected placement (using Expected Date of Placement/ M013), the actual date of placement (using Actual Date of Placement/M014). Also, the start date of SAP (using Start Date of Adoption Pay Period (APP)/ M020) must be entered.
CALCULATING SAP
In accordance with HMRC rules, SDWorx-pay calculates the employee’s average pay over the 8 weeks from and including the matching week (providing it is a payment week):
- For a weekly payroll, Payroll Active adds the pay for the matching week and the previous 7 pay periods and divides by 8 to obtain the average weekly pay.
- For a fortnightly payroll, Payroll Active adds the pay received in the matching week to that of the previous 3 pay periods and divides by 8 to obtain the average weekly pay. If the matching week is not a paying week, Payroll Active adds the pay of the previous 4 pay periods.
- For a lunar payroll, Payroll Active adds the pay received in the matching week to that of the previous pay period and divides by 8 to obtain the average weekly pay. If the matching week is not a paying week, Payroll Active adds the pay of the previous 2 pay periods.
- For a monthly payroll, Payroll Active adds the pay received in the matching week to that of the previous pay period, multiplies by 6 and divides by 52 to obtain the average weekly pay. If the matching week is not a paying week, Payroll Active adds the pay of the previous 2 pay periods.
SAP rates are reviewed by the HMRC each tax year.
PRE-DETERMINED AVERAGE EARNINGS AND PAYMENTS
If for some reason, the employee’s calculated average pay cannot be used by Payroll Active, you can enter a pre-determined average earnings on which SAP payments will be based using Average earnings replacement/M703. Payroll Active will use this replaced average earnings to calculate a new weekly rate. You can also change the rate, using Weekly ’Earnings Related’ rate/M704.
You can also enter pre-determined SAP payments, in which case you must enter these payments throughout the period of payment and not revert to automatic calculation. To enter these payments use Positive pre-determined SAP amount/M725 and Negative pre-determined amount/M726.
PAYING SAP
SAP is automatically paid into allowance number 70, which is reserved for parental payments, unless you set up a separate allowance for the payment of SAP. The details of this allowance are defined at company set-up time, including the number of the reducing allowance against which SAP can be offset (for example, the basic pay allowance, number 01).
If the reducing allowance is less than the SAP payment calculated by Payroll Active, the allowance is defined at company set-up time to be set to zero or allowed to become negative. If set to zero, displays WARNING – SAP ROUNDING on the Exception Report.
Payroll configuration can be specified that if the balance of the reducing allowance is less than the SAP amount, the employee’s basic pay will be reduced also.
If the reducing balance is defined at company set-up time to be the basic pay allowance (number 01), the basic pay will become negative if the basic pay is less than the SAP amount.
The calculated amount of SAP is printed on the payslip and is shown as a separate amount, and if specified, shown as offset against the nominated allowance.
The SAP allowance will be zeroised in accordance with the company calendar specified for the allowance at company set-up time.
If Payroll Active accepts the values you enter against SAP data codes but does not calculate a payment, it will print a warning message on the Exception Report that explains why payments have not been calculated.
From the SAP start date (held against Start Date of Adoption Pay Period (APP)/M020) all allowances (including basic pay), deductions and pension contributions continue to be processed as normal until they are stopped or adjusted.
The total SAP paid to-date in the current tax year is held against SAP total paid in current tax year/M728. This is cleared down at the end of each tax year.
WEEKS PAID AND WEEKS REMAINING
Payroll Active automatically maintains the number of weeks paid and the number of weeks remaining of the employee’s entitlement. You can however, replace any of these using:
- Weeks remaining to be paid/M240
- Weeks SAP paid to date/M260
SIGNED INPUT
You can enter positive or negative cash amounts against some of the SAP payroll items, by preceding the amount with a positive or negative sign. If you enter no sign, a positive amount is assumed. These are the items:
- SAP increase/M721
- SAP decrease/M722
- Positive pre-determined SAP amount/M725
- Negative pre-determined SAP amount/M726
Note the effect of entering a negative amount against:
- SAP increase/M721
- SAP decrease/M722
- Positive pre-determined SAP amount/M725
- Negative pre-determined SAP amount/M726
is to reverse the effect; that is, an increase becomes a decrease, and a decrease becomes an increase.
NOTE. Negative values are not accepted against the following items:
- Average earnings replacement/M703
- Weekly SAP ’Earnings Related’ rate/M704
- SAP total paid in current tax year/M728
CORRECTING ERRORS AND PAYROLL ADJUSTMENT
There are several ways in which you can correct SAP errors:
- By entering positive or negative pre-determined payments (using Positive pre-determined payment/M725 or Negative pre-determined payment/M726). Once you enter a pre-determined payment, you must continue to pay SAP in this way for the rest of the payment period.
- By increasing or decreasing the SAP by a specified amount for this payrun only, using SAP increase/M721 or SAP decrease/M722. In this way you can pay or recover an amount of SAP without affecting the number of weeks paid or weeks still to be paid.
- By entering weeks to be paid for payroll adjustment, using:
- Weeks to be paid for payroll adjustment/M265 together with a positive or negative amount (using Positive pre-determined payment/M725).
Note that you do not use Negative pre-determined payment/M726 in payroll adjustment.
Payroll adjustment differs from the other methods of correcting errors by producing a separate payslip, and allowing you to reverse the previous pay period (using Previous period reversal/E072).
If as a result of payroll adjustment, the number of weeks paid exceeds 26, Payroll Active prints MORE THAN 26 WKS SAP PAID on the Exception Report.
All payroll adjustment data must be entered only from a Payroll Adjustment screen or by using a form-type CD. Refer to Appendix E for a list of payroll adjustment items.
None of these methods allow you to correct errors made in the current payrun.
NOTE:
The following reports and documents can be affected as a result of managing SAP:
- Input Error Report
- Exception Report
- End of Year Tax Returns
- Financial Summary
- SAP Payments Report
- SAP Entitlement List See
- EMPLOYEE, for the following details:
- Sex/E041
- Basic period hours/E058
- Dormant indicator/E067
- Pay manual adjustment/E070
- Previous period reversal/E072
- Birth date/E080
- Start date/E081
- Leaving date/E082
- ALLOWANCES, page ALL-1, for information about managing allowances.
SAP PAYROLL ITEMS
| SAP ELIGIBILITY INDICATOR | M000 |
Payroll Active always sets this indicator to Y or N. Use M000 to re-set the eligibility of an employee to receive SAP payments.
Format
Y or N.
Example
The employee is to become eligible to receive SAP payments: M000 Y
NOTE:
- After you have entered the date of matching certificate (using Date of Matching Certificate/M010, page SAP-6), Payroll Active then performs two checks:
- It checks the employee’s start date (held against Start date/E081) to ensure that the employee has worked for the company for at least 26 weeks up to and including the matching week. If not, it prints EMPLOYEE INELIGIBLE FOR SAP – SERVICE TOO SHORT on the Exception Report.
- It calculates the employee’s average pay to ensure that it is not below the LEL. If it is, Payroll Active prints INELIGIBLE FOR SAP – AVERAGE PAY BELOW LEL on the Exception Report.
If both conditions are satisfied, Payroll Active sets the eligibility indicator to Y. If either or both are not satisfied, Payroll Active sets it to N.
- Use M000 to re-set the eligibility indicator to Y to pay the employee pre-determined SAP amounts, and N to stop any further SAP payments.
- After Payroll Active has calculated the SAP entitlement, it sets the dormant indicator (see Dormant indicator/E067, page EMP-21) to M and does not pay the employee until you enter 0 to clear the indicator value
| DATE OF MATCHING CERTIFICATE | M010 |
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Use M010 to enter the date of matching certificate.
Format ddmmyyyy/A
Where dd is the day, mm is the month and yyyy is the year.
NOTE. Enter /A after the date to indicate SAP.
Example
The date of matching certificate is 8th April, 2003: M010 08042003/A NOTE:
- The employee is entitled to a maximum of 26 weeks SAP which is all paid at the ‘standard’ rate.
- There is a further entitlement to 26 weeks unpaid additional adoption leave.
- Adoption leave can only be taken in whole weeks but a ‘week’ can start on any day of the week after the date of matching certificate.
- Enter 8 zeroes to clear the date of matching certficate.
- Having entered the date of matching certificate, Payroll Active calculates the matching week as the Sunday before the matching date if the matching date is not a Sunday. It then checks that the employee is eligible:
- If there is no start date for the employee (using Start date/E081), Payroll Active prints ELIGIBILITY NOT CHECKED – NO START DATE on the Exception Report.
- If a leaving date has been entered for the employee (using Leaving date/E082), Payroll Active prints SAP DUE, BUT LEAVING DATE ENTERED on the Exception Report.
- If the employee has not worked for the company for 26 weeks up to and including the matching week, Payroll Active prints EMPLOYEE INELIGIBLE FOR SAP – SERVICE TOO SHORT on the Exception Report.
- If the employee has not been on Payroll Active for sufficient time to enable Payroll Active to calculate average pay, Payroll Active prints AVERAGE PAY FOR SAP NOT HELD on the Exception Report. You should enter an average pay (using M703).
- If the employee’s average pay is below the LEL for National Insurance, Payroll Active prints INELIGIBLE FOR SAP – AVERAGE PAY BELOW LEL on the Exception Report.
- If the employee is marked as a leaver (for example by using Employee status marker/E001) to set the leaver marker, or by using Leaving date/E082 to enter a leaving date), Payroll Active prints SAP REM TO BE PAID FOR LVR on the Exception Report.
- If SAP is being calculated or a pre-determined amount of SAP is being paid to the employee, Payroll Active prints SAP STARTED on the Input Error Report.
- If you do not enter a date of matching certificate, or it is rejected, and you enter an
SAP start date (against Start Date of Adoption Pay Period/M020), Payroll Active prints MATCHING DATE IS NOT ON FILE on the Input Error Report. • Payroll Active calculates the employee’s average pay over the 8 weeks from and including the matching week (providing it is a payment week), and holds the amount against Average earnings replacement/M703.
- To change the date of matching certificate, simply replace the existing date by entering the new date.
- To remove an existing date, enter zeroes against M010. Payroll Active removes all SAP details for the employee, except for SAP paid to-date (held against SAP paid in current tax year/M728).
| EXPECTED DATE OF PLACEMENT OF CHILD | M013 |
| ACTUAL DATE OF PLACEMENT OF CHILD | M014 |
Use M013 to enter the employee’s expected date of placement of child. Use M014 to enter the actual date of placement of child.
Format ddmmyyyy
Where dd is the day, mm is the month and yyyy is the year.
Examples
The expected date of placement is 8th April, 2022:
M013 08042022
The actual date of placement is 10th April, 2022:
M014 10042022
| START DATE OF ADOPTION PAY PERIOD (APP) | M020 |
Use M020 to replace the existing start date of APP payments.
NOTES.
Start Date of APP must not be earlier than 2 weeks before the actual date of placement (M014) (or expected date of placement (M013) if actual date is not present).
Start Date of APP must not be later than the actual date of placement (M014) (or expected date of placement (M013) if actual date is not available).
Format ddmmyyyy
Where dd is day, mm is the month and yyyy is the year.
Example 1
The existing starting date for SAP is changed to 8th, April 2022:
M020 08042022
Example 2
On the April, 2022 payrun, a date of matching certificate and APP start date are entered, of 13th August, 2022 and 20 August, 2022 respectively:
M010 13082022
M020 20082022
NOTE:
- If you enter a new starting date and there is no date of matching certificate, Payroll Active displays MATCHING DATE IS NOT ON FILE.
- If you enter a new starting date and SAP is being paid, either as a pre-determined amount or is being calculated, Payroll Active will print SAP PAYMENTS ALREADY STARTED on the Input Error Report.
- Enter 8 zeroes to clear the SAP start date.
| NUMBER OF WEEKS SAP REMAINING TO BE PAID | M240 |
Use M240 to indicate the number of weeks SAP remaining to be paid to the employee. Valid input is 0-33
Format nn
Where nn can take the value 0-33 for weeks remaining.
Example 1
The number of remaining weeks for an employee is 18 weeks M240 18
| NUMBER OF WEEKS SAP PAID TO DATE | M260 |
Use M260 to replace the number of weeks paid. Payroll Active automatically updates these values each time it calculates SAP payments. Format nn
Where n can take the value 0-33 for weeks paid to date.
Example 1
The number of remaining weeks for an employee is 18 weeks
M260 18
NOTE. If you replace this number of weeks paid and SAP is being paid, you must replace the corresponding numbers of remaining weeks to be paid (using Number of Weeks SAP remaining to be paid/M240).
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| WEEKS TO BE PAID FOR PAYROLL ADJUSTMENT | M265 |
Use M265 to enter the number of weeks to be paid when an error has been made in a previous payrun. Format nn
Where n can take a positive or negative value of 1-33 for weeks paid.
Example 1
To correct a previous error, the number of additional weeks to be paid is 15: M265 15
Payroll Active automatically adjusts the remaining weeks and weeks paid accordingly.
Example 2
To correct a previous error, the number of weeks for which SAP is to be recovered is 12: M265 -12
Payroll Active automatically adjusts the remaining weeks and weeks paid accordingly.
NOTES.
- To pay SAP weeks for payroll adjustment, you must also enter the pre-determined amount, using Positive pre-determined SAP payment/M725.
- To recover an amount of SAP already paid, enter a negative number of weeks to be paid against M265, and a negative amount against Positive pre-determined SAP payment/M725.
- The pre-determined amount entered against Positive pre-determined SAP payment/ M725 is automatically held as an increase for this payrun only, against SAP increase M721, or as a decrease for this payrun only, against SAP decrease/ M722.
- When you enter positive or negative weeks against M265, Payroll Active automatically updates the values held against:
- Weeks remaining/M240
- Weeks paid/M260
- The SAP paid in the current tax year, held against SAP total paid in current tax year/ M728 is automatically increased (or decreased) by the pre-determined amount entered against Positive pre-determined SAP payment/M725.
- If as a result of payroll adjustment, the number of weeks paid exceeds 26, Payroll Active prints SAP WEEKS EXCEEDS LIMIT on the Exception Report.
- The SAP adjustment will be printed on a separate payslip.
- You can reverse all payments made in the previous payrun (using Previous period reversal/E072).
- You can also correct errors made in a previous payrun by using Negative pre-determined SAP payment/M726 to recover SAP, but it will not be a payroll adjustment. A separate payslip is not produced and you cannot reverse the previous period’s payment.
| NUMBER OF WEEKS EXCLUDED FROM SAP THIS PERIOD | M270 |
Use M270 to enter the number of weeks for which the employee is to be excluded from SAP payments. This applies to this payrun only. Valid input is 0-33.
Format nn
Where nn is the number of weeks, from 0 to 33.
Example
If the employee returns to work for 3 days during the adoption period, he/she loses 1 week of SAP. If the employee is on a monthly payroll and is due to receive four weeks of SAP, enter 1 against M270:
M270 1
This means that the employee receives only 3 weeks SAP payments. The weeks entitlement held against Number of Weeks remaining to be paid/M240 (page SAP-8) is reduced by 4 weeks at the ’earnings related’ rate.
NOTE:
- Use M270 if the employee returns to work during the 26 week adoption pay period, and you wish to prevent SAP payment for a specified number of weeks.
- M270 operates for this payrun only. This means that you must use M270 in each pay period where exclusion is required.
- To exclude the employee permanently from SAP payments, set the employee’s eligibility indicator to N, using SMP eligibility indicator/M000. Unless you make the record dormant (see Dormant indicator/E067), Payroll Active may calculate a tax refund.
- If the employee returns to work during the adoption period, adjust any pay and allowance records that have been set to zero for the maternity pay period.
| AVERAGE EARNINGS REPLACEMENT | M703 |
Use M703 to replace the average earnings that Payroll Active calculates and holds against M703.
Format ppppppppppp
Where ppppppppppp is the average earnings, in pence, up to 11 numeric characters.
Example
The average earnings are set at £325.00:
NOTE. SDWorx-pay automatically calculates the average earnings and also the weekly SAP earnings rate in accordance with HMRC rules. The average earnings replacement is only required for values which will generate a weekly earnings rate of under the standard rate. Therefore the correct entry is: M703 13000
NOTE. 90% of £130.00 is £117.00.
| REPLACE WEEKLY SAP EARNINGS RATE | M704 |
Use M704 to replace the calculated SAP rate.
Format ppppppppppp
Where ppppppppppp is the calculated weekly ’earnings related’ rate, in pence, up to 11 numeric characters.
Example
If the employee’s average weekly pay (either calculated or pre-determined) is £325.00:
NOTE. SDWorx-pay automatically calculates the average earnings and also the weekly SPP earnings rate in accordance with HMRC rules. The average earnings replacement is only required for values which will generate a weekly earnings rate of under the standard rate. Therefore the correct entry is:
M704 11700
NOTE. 90% of £130.00 is £117.00.
NOTE:
• Use M704 when you do not wish to use the existing SAP ’earnings related’ rate that has been calculated from the employee’s average earnings (held against Average earnings replacement/M703).
| SAP INCREASE | M721 |
| SAP DECREASE | M722 |
Use M721 orM722 to increase or decrease the SAP payment, for this payrun only.
Format ppppppppppp
Where ppppppppppp is the amount of increase or decrease, in pence, up to 11 numeric characters.
Example 1
The employee’s calculated SAP payment is increased by £45.00 for this payrun only:
M721 4500
Example 2
The employee’s calculated SAP payment is decreased by £15.00 for this payrun only: M722 1500 Note:
- The addition or subtraction from the calculated SAP payment is reflected in the SAP total paid in the current tax year (held against SAP total paid in current tax year/ M728).
- You can enter successive amounts against each of M721 and M722 in the same pay period. At the time of the payrun, Payroll Active totals the amounts against each and increases or decreases the SAP payment accordingly.
| POSITIVE PRE-DETERMINED SAP PAYMENT | M725 |
| NEGATIVE PRE-DETERMINED SAP PAYMENT | M726 |
Use M725 or M726 to pay or recover a pre-determined SAP amount, for this payrun only. Use M725 when entering an SAP payroll adjustment. Format ppppppppppp
Where ppppppppppp is the pre-determined SAP amount, in pence, up to 11 numeric characters. For payroll adjustment, the pre-determined amount can be positive or negative.
Example 1
The employee is to receive a pre-determined amount of £112.15 for this payrun only:
M725 11215
Example 2
The employee is to have a pre-determined amount of £37.50 recovered for this payrun only:
M726 3750
Example 3
The employee is to receive a pre-determined amount of £97.75 as a payroll adjustment:
M265 1
M725 9775
In this example, the number of weeks paid is also adjusted by 1.
Example 4
The employee is to have a pre-determined amount of £155.90 recovered as a payroll adjustment:
M265 -1
M725 -15590
In this example, the number of weeks recovered is 1 at the ’earnings related’ rate.
NOTE:
- UseM725 and M726 when Payroll Active is unable to calculate average pay, or Payroll Active has not received the employee’s SAP details in time to calculate payments.
- Use M725 in conjunction with Weeks to be paid for payroll adjustment/M265 to enter pre-determined amounts of SAP to be paid or recovered.
- If you enter pre-determined SAP payments, other than for payroll adjustments, you must enter these payments throughout the period of matching certificate and not revert to automatic calculation.
- As with calculated SAP payments, the net amount held against M725 and M726 is added to the tax year-to-date total SAP paid (held against SAP total paid in current tax year/M718)
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| SAP TOTAL PAID IN CURRENT TAX YEAR | M728 |
Use M728 to replace the total amount of SAP paid in the year to-date, which Payroll Active calculates and holds against M728.
Format ppppppppppp
Where pppppppppppp is the total SAP amount paid, in pence, up to 11 numeric characters.
Example
The employee has received a total of £945.00 in SAP payments during the current tax year:
M728 94500
NOTE:
- At the end of each tax year, Payroll Active prints the total SAP payments made to the employee on the EOY Reconciliation, after which it sets the amount to zero.
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