Articles on: Payroll

Adding Maternity and Paternity Pay in FreePayroll

Maternity and Paternity Pay are vital benefits that support employees during their parental leave. FreePayroll facilitates the straightforward setup and management of these payments. Here’s how to effectively add Maternity Pay (Statutory Maternity Pay, SMP) and Paternity Pay (Statutory Paternity Pay, SPP) in FreePayroll.

Overview of Maternity and Paternity Pay

Maternity and Paternity Pay provide financial support to employees during their leave after the birth or adoption of a child. SMP and SPP are designed to ensure employees can take necessary time off while having a portion of their income supported.

Steps to Add Maternity or Paternity Pay

Employee Profile Setup:
- Navigate to 'Employees' from the dashboard.
- Select the employee who is taking parental leave.

Enter Parental Leave Details:
- Click on the ‘Maternity/Paternity’ tab within the employee's profile.
- Enter the expected due date, typically found on the MAT B1 form or equivalent.
- Specify the leave start and end dates.

Calculate Average Weekly Earnings (AWE):
- AWE must be calculated to determine eligibility and payment amounts for SMP/SPP. Input this manually if not automatically calculated by FreePayroll.

Set Up the Pay:
- Choose to add either Maternity Pay or Paternity Pay based on the situation.
- Follow prompts to input the statutory pay details, ensuring correct setup according to current regulations.

Important Notes

- Tax and NI Contributions: Ensure that tax and National Insurance contributions are correctly calculated during parental leave payments.
- Record Keeping: Maintain accurate records of all parental leave payments for compliance and auditing purposes.
- HMRC Guidelines: Familiarize yourself with HMRC's guidelines on SMP and SPP to ensure compliance and proper administration.

Updated on: 28/01/2025

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