Effective 6 April 2025, significant updates to statutory payment policies will be implemented:

• Increased Compensation for Small Employers: The compensation rate for employers eligible for Small Employers Relief will rise from 3% to 8.5%. Consequently, qualifying employers can reclaim 108.5% of statutory payments from HMRC.

• Affected Statutory Payments: This adjustment applies to Statutory Maternity Pay, Statutory Paternity Pay, Statutory Adoption Pay, Shared Parental Pay, Statutory Parental Bereavement Pay, and Statutory Neonatal Care Pay.

• Eligibility Criteria: Employers who paid £45,000 or less in Class 1 National Insurance during the previous tax year (excluding reductions like Employment Allowance) qualify for Small Employers Relief. The £45,000 threshold remains unchanged.

These changes aim to provide additional financial support to small employers. Employers should update their payroll systems accordingly and consult HM Treasury’s latest guidance or the GOV.UK website for detailed information.

Read more here: Statutory Rate Changes for 2025: What You Need to Know | SD Worx