STATUTORY PATERNITY PAY (SPP)
| Name | Engine code |
| SPP Eligibility Indicator | M000 |
| Expected Date of Childbirth | M010 |
| Actual Date of Childbirth | M011 |
| Start Date of SPP | M020 |
| Number of Weeks SPP Remaining to be Paid | M140 |
| Number of Weeks SPP Paid to Date | M160 |
| Number of Weeks SPP to be Paid for Payroll Adjustment | M165 |
| Replace Average Earnings | M703 |
| Weekly SPP ’Earnings Related’ Rate | M704 |
| SPP Increase this Payrun Only | M711 |
| SPP Decrease this Payrun Only | M712 |
| Positive Pre-Determined SPP this Payrun Only | M715 |
| Negative Pre-Determined SPP this Payrun Only | M716 |
| SPP Total to Date Paid in Current Year | M718 |
Statutory Paternity Pay (SPP) and Paternity Leave is a scheme for parents to receive parental pay and leave from employers. SPP and Paternity Leave may be paid to someone who is:
- the biological father
- a partner or husband who is not the biological father
- a female partner in a same sex couple.
SPP is paid to an employee in a single period of one or two weeks during the first 56 days after the birth or expected date of birth, whichever is the latest. To qualify, the employee must have been in employment for at least 26 weeks before the qualifying week (QW). The start date can be any day of the week. The expected date of childbirth is obtained from either a doctor or midwife.
Payroll Active checks the length of time of employment with the company, and calculates the employee’s average pay to determine the SPP rate.
To pay SPP to an employee, Payroll Active requires you to enter the expected date of childbirth (using Expected Date of childbirth/M010), the actual date of childbirth (using Actual Date of childbirth/M011), the start date of SPP (using Start Date of SPP/ M020) and number of weeks SPP to be paid (1 or 2) (using Number of Weeks SPP Remaining to be Paid/M140).
In accordance with HMRC rules, calculates the employee’s average pay over the 8 weeks from and including the qualifying week (providing it is a payment week):
- For a weekly payroll, Payroll Active adds the pay for the qualifying 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 qualifying week to that of the previous 3 pay periods and divides by 8 to obtain the average weekly pay. If the qualifying 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 qualifying week to that of the previous pay period and divides by 8 to obtain the average weekly pay. If the qualifying 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 qualifying week to that of the previous pay period, multiplies by 6 and divides by 52 to obtain the average weekly pay. If the qualifying week is not a paying week, Payroll Active adds the pay of the previous 2 pay periods.
To be eligible for the SPP, the employee must have worked continuously for at least 26 weeks up to and into the qualifying week, and have an average pay above the Lower Earnings Limit (LEL).
SPP rates for Paternity Pay Periods starting on or after 6th April 2003 and which are reviewed by the DWP each year, are:
- Up to two weeks SPP at 90% of average weekly earnings or £100, whichever is the lower.
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 SPP payments will be based using Average earnings replacement/M703. Payroll Active will use this replaced average earnings to calculate a new weekly SPP rate. You can also change the rate, using Weekly ’Earnings Related’ rate/M704.
You can also enter pre-determined SPP 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 SPP amount/M715 and Negative pre-determined amount/M716.
PAYING SPP
SPP is automatically paid into allowance number 70, which is reserved for parental payments, unless you set up a separate allowance for SPP. The details of this allowance are defined at company set-up time, including the number of the reducing allowance against which SPP can be offset (for example, the basic pay allowance, number 01). If the reducing allowance is less than the SPP 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, Payroll Active prints WARNING – SPP ROUNDING on the Exception Report, when Payroll Active calculates SPP.
At company set-up time, it can be specified that if the balance of the reducing allowance is less than the SPP 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 SPP amount.
The calculated amount of SPP is printed on the payslip and is shown as a separate amount, and if specified, shown as offset against the nominated allowance.
The SPP 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 SPP 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 SPP start date (held against SPP start date/M020) all allowances (including basic pay), deductions and pension contributions continue to be processed as normal until they are stopped or adjusted.
The total SPP paid to-date in the current tax year is held against SPP total paid in current tax year/M718. This is cleared down at the end of each tax year.
WEEKS PAID AND WEEKS REMAINING
Payroll Active requires you to enter 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/M140
- Weeks SPP paid to date/M160
SIGNED INPUT
You can enter positive or negative cash amounts against some of the SPP 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:
- SPP increase/M711
- SPP decrease/M712
- Positive pre-determined SPP amount/M715
- Negative pre-determined SPP amount/M716
Note the effect of entering a negative amount against:
- SPP increase/M711
- SPP decrease/M712
- Positive pre-determined SPP amount/M715
- Negative pre-determined SPP amount/M716
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 SPP ’earnings related’ rate/M704
- SPP total paid in current tax year/M718
CORRECTING ERRORS AND PAYROLL ADJUSTMENT
There are several ways in which you can correct SPP errors:
- By entering positive or negative pre-determined payments (using Positive pre-determined payment/M715 or Negative pre-determined payment/M716). Once you enter a pre-determined payment, you must continue to pay SPP in this way for the rest of the paternity period.
- By increasing or decreasing the SPP by a specified amount for this payrun only, using SPP increase/M711 or SPP decrease/M712. In this way you can pay or recover an amount of SPP 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/M165
- together with a positive or negative amount (using Positive pre-determined payment/M715).
Note that you do not use Negative pre-determined payment/M716 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 2, Payroll Active prints ERROR – NOT ENOUGH WEEKS SPP LEFT 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 can be affected as a result of managing SPP:
- Input Error Report
- Exception Report
- End of Year Tax Returns
- Financial Summary
- SPP Payments Report
- SPP 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 for information about managing allowances.
SPP PAYROLL ITEMS
| SPP 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 SPP payments.
Format
Y or N.
Example
The employee is to become eligible to receive SPP payments: M000 Y
NOTE:
- After you have entered an expected date of childbirth (using Expected date of childbirth/M010), the qualifying week is determined along with two 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 qualifying week. If not, it displays EMPLOYEE INELIGIBLE FOR SPP – SERVICE TOO SHORT on the Exception Report.
- Calculates the employee’s average pay to ensure that it is not below the LEL. If it is, Payroll Active prints INELIGIBLE FOR SPP – AVERAGE PAY BELOW LEL on the Exception Report.
If both conditions are satisfied, the eligibility indicator is set to Y. If either or both are not satisfied it is set to N.
- Use M000 to re-set the eligibility indicator to Y to pay the employee pre-determined SPP amounts, and N to stop any further SPP payments.
.
| EXPECTED DATE OF CHILDBIRTH | M010 |
| ACTUAL DATE OF CHILDBIRTH | M011 |
Use M010 to enter the employee’s expected date of childbirth.
Use M011 to enter the actual date of childbirth.
Format ddmmyyyy
NOTE. Enter /P after the date to indicate SPP.
Examples
The expected date of childbirth is 8th April, 2022:
M010 08042022/P
The actual date of childbirth is 10th April, 2022:
M011 10042022/P NOTE:
- Paternity leave can only be taken in continuous whole weeks but a ‘week’ can start on any day of the week after the expected date of childbirth.
- Enter 8 zeroes to clear the expected date of childbirth.
- Having entered the expected date of childbirth, Payroll Active 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 displays SPP DUE, BUT LEAVING DATE HELD on the Exception Report.
- If the employee has not worked for the company for 26 weeks up to and including the qualifying week, Payroll Active prints EMPLOYEE INELIGIBLE FOR SPP – 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 SPP 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 SPP – 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 SPP REM TO BE PAID FOR LVR on the Exception Report.
- If SPP is being calculated or a pre-determined amount of SPP is being paid to the employee, Payroll Active prints SPP PAYMENTS ALREADY STARTED on the Input Error Report.
- If you do not enter an expected date of childbirth, or it is rejected, and you enter an SPP start date (against SPP start date/M020), Payroll Active prints EXPECTED DATE OF CHILDBIRTH NOT ON FILE on the Input Error Report.
- Payroll Active calculates the employee’s average pay over the 8 weeks from and including the qualifying week (providing it is a payment week), and holds the amount against Average earnings replacement/M703.
- To change the expected date of childbirth, simply replace the existing date by entering the new date. To keep the same starting date for SPP payments, you must re-enter the date (using SPP start date/M020).
- To remove an existing date, enter zeroes against M010. Payroll Active removes all SPP details for the employee, except for SPP paid to-date (held against SPP paid in current tax year/M718).
- If the child is born later than the Expected Date of Childbirth/M010, enter the Actual Date of Childbirth/M011. Payroll Active will recalculate the number of days and act as a control mechanism to prevent payment more than 56 days after the expected date or the actual date, whichever is the later.
| SPP START DATE | M020 |
Use M020 to replace the existing start date of SPP payments.
NOTE. The employee can decide when the SPP payments are to start. However they must be taken during 56 days after the birth of the child.
Format ddmmyyyy
Example 1
The existing starting date for SPP is changed to 8th, April 2022:
M020 08042022
Example 2
On the April, 2022 payrun, an expected date of childbirth and SPP start date are entered, of 25th April, 2022 and 30th April, 2022 respectively:
M010 25042022
M020 30042022
NOTE:
- If you enter a new starting date and there is no expected date of childbirth, Payroll Active displays NO CHILDBIRTH DATE.
- If you enter a new starting date and SPP is being paid, either as a pre-determined amount or is being calculated, Payroll Active will print SPP PAYMENTS ALREADY STARTED on the Input Error Report.
- Enter 8 zeroes to clear the SPP start date.
| NUMBER OF WEEKS SPP REMAINING TO BE PAID | M140 |
Use M140 to request SPP to be paid to the employee. Valid input is 0-2 Format n
Where n can take the value 0, 1, or 2 for weeks remaining.
Example 1
The number of remaining weeks for an employee is 1 week
M140 1
| NUMBER OF WEEKS SPP PAID TO DATE | M160 |
Use M160 to replace the number of weeks paid. the value is automatically updated each time there is an SPP payment. Format n
Where n can take the value 0, 1, or 2 for weeks paid to date.
Example 1
The number of remaining weeks for an employee is 1 week
M160 1
NOTE. If you replace either of these numbers of weeks paid and SPP is being paid, you must replace the corresponding numbers of remaining weeks to be paid (using Number of Weeks SPP remaining to be paid/M140).
| WEEKS TO BE PAID FOR PAYROLL ADJUSTMENT | M165 |
Use M165 to enter the number of weeks to be paid when an error has been made in a previous payrun. Format n
Where n can take a positive or negative value of 0, 1, or 2 for weeks paid.
Example 1
To correct a previous error, the number of additional weeks to be paid is 1:
M165 1
Payroll Active automatically adjusts the remaining weeks and weeks paid accordingly.
Example 2
To correct a previous error, the number of weeks for which SPP is to be recovered is 1:
M165 -1
Payroll Active automatically adjusts the remaining weeks and weeks paid accordingly.
NOTES.
- To pay SPP weeks for payroll adjustment, you must also enter the pre-determined amount, using Positive pre-determined SPP payment/M715.
- To recover an amount of SPP already paid, enter a negative number of weeks to be paid against M165, and a negative amount against Positive pre-determined SPP payment/M715.
- The pre-determined amount entered against Positive pre-determined SPP payment/ M715 is automatically held as an increase for this payrun only, against SPP increase M711, or as a decrease for this payrun only, against SPP decrease/ M712.
- When you enter positive or negative weeks against M165, Payroll Active automatically updates the values held against:
- Weeks remaining/M140
- Weeks paid/M160
- The SPP paid in the current tax year, held against SPP total paid in current tax year/ M718 is automatically increased (or decreased) by the pre-determined amount entered against Positive pre-determined SPP payment/M715.
- If as a result of payroll adjustment, the number of weeks paid exceeds 2, Payroll Active displays SPP WEEKS EXCEEDS LIMIT on the Exception Report.
- The SPP 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 SPP payment/M716 to recover SPP, but it will not be a payroll adjustment. A separate payslip is not produced and you cannot reverse the previous period’s payment.
| 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 SPP earnings rate in accordance with HMRC rules. The average earnings replacement is only required for values which will generate a weekly earnings rate at or above the relevant Threshold but under the standard weekly rate. Therefore the correct entry is:
M703 13000
NOTE. 90% of £130.00 is £117.00.
| REPLACE WEEKLY SPP EARNINGS RATE | M704 |
Use M704 to replace the calculated SPP rate.
Format ppppppppppp
Where ppppppppppp is the calculated weekly rate, in pence, up to 11 numeric characters.
Example
If 90% of the employee’s average weekly pay (either calculated or pre-determined) is £117.00:
NOTE. SDWorx-pay automatically calculates the average earnings and also the weekly SPP earnings rate in accordance with HMRC rules. Therefore the correct entry is:
M704 11700
NOTE. 90% of £130.00 is £117.00.
NOTE:
• Use M704 when you do not wish Payroll Active to use the existing SPP ’earnings related’ rate that has been calculated from the employee’s average earnings (held against Average earnings replacement/M703).
| SPP INCREASE | M711 |
| SPP DECREASE | M712 |
Use M711 orM712 to increase or decrease the SPP 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 SPP payment is increased by £45.00 for this payrun only:
M711 4500
Example 2
The employee’s calculated SPP payment is decreased by £15.00 for this payrun only:
M712 1500
Note:
- The addition or subtraction from the calculated SPP payment is reflected in the SPP total paid in the current tax year (held against SPP total paid in current tax year/ M718).
- You can enter successive amounts against each of M711 and M712 in the same pay period. At the time of the payrun, Payroll Active totals the amounts against each and increases or decreases the SPP payment accordingly.
| POSITIVE PRE-DETERMINED SPP PAYMENT | M715 |
| NEGATIVE PRE-DETERMINED SPP PAYMENT | M716 |
Use M715 or M716 to pay or recover a pre-determined SPP amount, for this payrun only. Use M715 when entering an SPP payroll adjustment. Format ppppppppppp
Where ppppppppppp is the pre-determined SPP 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 £117.00 for this payrun only:
M715 11700
Example 2
The employee is to have a pre-determined amount of £37.50 recovered for this payrun only:
M716 3750
Example 3
The employee is to receive a pre-determined amount of £97.75 as a payroll adjustment:
M165 1
M715 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:
M165 -1
M715 -15590
NOTE:
- Use M715 and M716 when Payroll Active is unable to calculate average pay, or Payroll Active has not received the employee’s SPP details in time to calculate payments.
- Use M715 in conjunction with Weeks to be paid for payroll adjustment/M165 to enter pre-determined amounts of SPP to be paid or recovered.
- If you enter pre-determined SPP payments, other than for payroll adjustments, you must enter these payments throughout the period of payment and not revert to automatic calculation.
- As with calculated SPP payments, the net amount held against M715 and M716 is added to the tax year-to-date total SPP paid (held against SPP total paid in current tax year/M718).
.
| SPP TOTAL PAID IN CURRENT TAX YEAR | M718 |
Use M718 to replace the total amount of SPP paid in the year to-date, which Payroll Active calculates and holds against M718.
Format ppppppppppp
Where pppppppppppp is the total SPP amount paid, in pence, up to 11 numeric characters.
Example
The employee has received a total of £945.00 in SPP payments during the current tax year:
M718 94500
NOTE:
- At the end of each tax year, Payroll Active displays the total SPP payments made to the employee on the EOY Reconciliation, after which it sets the amount to zero.
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