{"id":28107,"date":"2025-03-10T16:08:36","date_gmt":"2025-03-10T16:08:36","guid":{"rendered":"https:\/\/smh.group\/?p=28107"},"modified":"2025-03-10T16:08:46","modified_gmt":"2025-03-10T16:08:46","slug":"hmrc-to-increase-statutory-pay-compensation-for-small-employers-in-2025","status":"publish","type":"post","link":"https:\/\/devstagesite.co.uk\/smhgroup\/hmrc-to-increase-statutory-pay-compensation-for-small-employers-in-2025\/","title":{"rendered":"HMRC to increase statutory pay compensation for small employers in 2025"},"content":{"rendered":"<p><strong>Managing statutory payments can be challenging for smaller employers, but HMRC offers compensation to help offset the burden. From 6 April 2025, this compensation rate will nearly triple, increasing from 3% to 8.5%.<\/strong><\/p>\n<p>Employers can usually reclaim 92% of statutory payments for maternity, paternity, adoption, shared parental and parental bereavement (statutory sick pay is no longer recoverable). However, smaller employers can recover 100% of the cost as well as the compensation. So, the total rate of recovery will be 108.5% from 6 April 2025.<\/p>\n<p>Statutory neonatal care pay is being introduced from 6 April 2025, which will be recoverable on the same basis. It will be paid to a parent when their newborn is sick in hospital.<\/p>\n<p><strong>Smaller employers<\/strong><\/p>\n<p>You are a smaller employer if your total class 1 NIC payments were \u00a345,000 or less for the tax year before the employee\u2019s qualifying week:<\/p>\n<ul>\n<li>Both employee and employer contributions are included, but not class 1A or 1B NICs.<\/li>\n<li>The employment allowance reduction is ignored.<\/li>\n<li>The qualifying week will vary depending on the type of leave. For example, for maternity pay, the qualifying week is the fifteenth week before the baby\u2019s due date.<\/li>\n<\/ul>\n<p>The main rate of employee class 1 NIC is lower for 2024\/25 than it was for 2023\/24, so an employer who was previously just outside of the \u00a345,000 threshold might qualify from 6 April 2025.<\/p>\n<p>An employer can apply to HMRC to be paid in advance if they cannot afford to make statutory payments.<\/p>\n<p><strong>Recovery<\/strong><\/p>\n<p>Relief, whether at the normal rate or at the smaller employer rate, is claimed on a monthly basis through payroll software using the employer payment summary. Payroll software should do everything automatically, although you may need to select that you are a small employer.<\/p>\n<p>HMRC\u2019s guide to getting financial help with statutory pay can be found <a href=\"https:\/\/www.gov.uk\/recover-statutory-payments\">here.<\/a><\/p>\n<p>For more information,\u00a0<a href=\"https:\/\/devstagesite.co.uk\/smhgroup\/contact\/\">contact us<\/a>\u00a0on\u00a0<strong>0114 266 4432\u00a0<\/strong>or email\u00a0<a href=\"mailto:info@smh.group\"><strong>info@smh.group.<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Managing statutory payments can be challenging for smaller employers, but HMRC offers compensation to help offset the burden. From 6 April 2025, this compensation rate will nearly triple, increasing from 3% to 8.5%. Employers can usually reclaim 92% of statutory payments for maternity, paternity, adoption, shared parental and parental bereavement (statutory sick pay is no longer recoverable). However, smaller employers can recover 100% of the cost as well as the compensation. So, the total rate of recovery will be 108.5% from 6 April 2025. Statutory neonatal care pay is being introduced from 6 April 2025, which will be recoverable on the same basis. It will be paid to a parent when their newborn is sick in hospital. Smaller employers You are a smaller employer if your total class 1 NIC payments were \u00a345,000 or less for the tax year before the employee\u2019s qualifying week: Both employee and employer contributions are included, but not class 1A or 1B NICs. The employment allowance reduction is ignored. The qualifying week will vary depending on the type of leave. For example, for maternity pay, the qualifying week is the fifteenth week before the baby\u2019s due date. The main rate of employee class 1 NIC [&hellip;]<\/p>\n","protected":false},"author":4,"featured_media":28099,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[3],"tags":[],"class_list":["post-28107","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-smh-accounting-business-advisory"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.9 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>HMRC to increase statutory pay compensation for small employers in 2025 - SMH Group<\/title>\n<meta name=\"description\" content=\"Managing statutory payments can be challenging for smaller employers, but HMRC offers compensation to help offset the burden.\" \/>\n<meta name=\"robots\" content=\"noindex, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"HMRC to increase statutory pay compensation for small employers in 2025 - 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