Small employers can usually recover 100% of most of the statutory payments they make to employees plus compensation from HMRC.
If your business qualifies for small employers’ relief you can claim 103% of almost all statutory payments made to employees until 5 April 2025. From 6 April 2025, this was increased to 108.5% in line with changes to employer’s national insurance.
The payments covered by the relief include statutory maternity; paternity; adoption; parental bereavement; neonatal care (from April 2025); and shared parental leave pay. The relief does not apply to statutory sick pay.
An employer is eligible for small employers’ relief if the total Class 1 national insurance contributions paid by the business in the last complete tax year were £45,000 or less before any reductions such as the employment allowance. Employers that do not qualify can usually claim relief at a lower rate of 92%.
Relief is generally claimed on a monthly basis through payroll software using the employer payment summary and can be offset against other tax liabilities. It is possible to make a claim to HMRC for payment in advance if an employer is unable to meet the cost of statutory payments to its employees.
If you have made statutory payments other than sick pay to employees, we can help you ensure that you are claiming the full amount of compensation you are entitled to. Contact our expert below for help and advice.
