Guidance: Statutory Paternity Pay: manually calculate your employee’s payments

Terminology explained

Matching date (MD)

The date when the adoption agency told your employee that they had been matched with a child.

Matching week (MW)

The week (Sunday to Saturday) when the adoption agency told your employee that they had been matched with a child.

Week baby due

The week in which the expected date of the baby’s birth falls, starting with the preceding Sunday and ending on the following Saturday. If the birth falls on a Sunday, that date is the first day in the week baby due.

Qualifying week (QW)

The QW is the 15th week (Sunday to Saturday) before the week baby due.

Before you begin

Information you need to calculate your employee’s Statutory Paternity Pay (SPP):

• for SPP — the declaration of family commitment signed by your employee — form SC3, SC4, SC5 or your own version
• the date your employee intends to stop work
• your employee’s gross pay and the dates they were paid
• the date your employee started working for you
• confirmation that your employee’s gross earnings are liable to employer’s Class 1 National Insurance contributions (NICs) or would be but for their age or level of earnings

Calculate Average Weekly Earnings (AWE)

AWE must include all earnings on which Class 1 NICs liability is due, or would be due if they were high enough. SPP entitlement depends on your employee’s AWE in a ‘relevant period’. For the tax year 2023 to 2024 the AWE must be £123 or more. Divide all the earnings paid in that relevant period by the number of days, weeks or months in that period.

The relevant period (births)

This is usually the 8 week period before the QW.

The end of the relevant period is the last normal payday on, or before, the Saturday of the QW (or the date the baby is born where the baby is born before or during the QW).

The start of the relevant period is the day after the last normal payday falling at least 8 weeks before the end of the relevant period.

Example weekly paid employee

Baby due on 25 March 2024:

QW	Payday	Last payday at least 8 weeks before the end of the relevant period	Last payday on or before the Saturday of the QW
10 December 2023 to 16 December 2023	Friday	20 October 2023	15 December 2023

The relevant period is 21 October 2023 to 15 December 2023.

Add up all the earnings paid between 21 October 2023 to 15 December 2023 and divide by 8 (the number of weeks in the relevant period).

Do not round the figure up or down to whole pence.

Example monthly paid employee

Baby due date 23 March 2024:

QW	Payday	Last payday at least 8 weeks before the end of the relevant period	Last payday on or before the Saturday of the QW
10 December 2023 to 16 December 2023	Last working day of the month	29 September 2023	30 November 2023

The relevant period is 30 September 2023 to 30 November 2023.

Add up all the earnings paid between 30 September 2023 to 30 November 2023:

• divide by 2 (the number of months in the relevant period)
• multiply by 12 (number of months in the year)
• divide by 52 (number of weeks in the year)

Do not round the figure up or down to whole pence.

The relevant period (adoption)

This is usually the 8 week period before the MW.

The end of the relevant period is the last normal payday on or before the Saturday of the MW.

The start of the relevant period is the day after the last normal payday falling at least 8 weeks before the end of the relevant period.

Example weekly paid employee

Matching date is 7 December 2023:

MW	Payday	Last payday at least 8 weeks before the end of the relevant period	Last payday on or before the Saturday of the MW
3 December 2023 to 9 December 2022	Friday	13 October 2023	8 December 2023

The relevant period is 14 October 2023 to 8 December 2023.

Add up all the earnings paid during the relevant period and divide by 8 (the number of weeks in the relevant period).

Do not round the figure up or down to whole pence.

Example monthly paid employee (adoption)

Matching day is 7 December 2023:

MW	Payday	Last payday at least 8 weeks before the end of the relevant period	Last payday on or before the Saturday of the MW
3 December 2023 to 9 December 2023	Last day of month	30 September 2023	30 November 2023

The relevant period is 1 October 2023 to 30 November 2023.

Add up all the earnings paid between during the relevant period and:

• divide by 2 (the number of months in the relevant period)
• multiply by 12 (number of months in the year)
• divide by 52 (number of weeks in the year)

Do not round the figure up or down to whole pence.

Weekly paid employees without a whole number of weeks in the relevant period

This may happen if you bring forward your employee’s normal payday because of bank holidays, for example at Easter or Christmas. Divide the earnings by the number of weeks wages actually paid, not the number of weeks in the relevant period.

Employees paid multiples of a week

This may happen if you pay your employee fortnightly or 4 weekly. Divide the earnings by the number of whole weeks in the relevant period.

Monthly paid employees without a whole number of months in the relevant period

Work out the number of rounded months as follows:

• count the number of whole months
• count the numbers of odd days

Round up or down as follows:

• February — 14 days or less round down, 15 days or more round up
• any month except February — 15 days or less round down, 16 days or more round up

Divide the earnings by this number of rounded months.

Employees not paid in a regular pay pattern

Divide the earnings by the number of days in the relevant period and multiply by 7.

Mistimed payments

This only applies to regular payments of earnings paid other than on their normal date, for example due to a bank holiday.

A mistimed payment:

• occurs when the date of the actual payment of earnings is made earlier or later than the normal contractual payday, such as an annual holiday
• should not be confused with a payroll error, where a mistake is made in the payroll resulting in a shortfall of pay when working out the AWE in the relevant period

Divide the total earnings in the relevant period by the number of weeks wages actually paid.

Overpayment or underpayment of earnings made during the relevant period

Always calculate AWE on all earnings actually paid within the relevant period. Where over or under payments of wages occur within the relevant period, include the overpaid or underpaid amount in the AWE calculation to decide if SPP is due.

Salary sacrifice

If an employee has entered into a salary sacrifice with you their AWE is calculated using the amount of earnings actually paid to them after the sacrifice during the relevant period.

Contractual benefits

For the purposes of calculating AWE for SPP, the calculation is based on earnings which are subject to Class 1 NICs. Therefore the value of any benefits which are exempt from Class 1 NICs (such as some childcare vouchers will not be included in the AWE calculation.

Earnings in the relevant period affected by a backdated pay rise

If your employee receives a backdated pay rise which increases the amount of earnings already paid in the relevant period and was either:

• not entitled to SPP
• entitled to SPP at less than the standard rate

You must recalculate their AWE to check if they’re:

• now entitled, and pay any SPP due
• entitled to an increase and pay any extra SPP due

Calculate SPP

SPP is a weekly payment. It lasts for 1 or 2 complete weeks and the 2 weeks must be consecutive.

You must pay your employee the lower weekly rate of:

• £172.48 from 5 April 2023
• 90% of their AWE

The SPP period starts the day after the last day your employee worked before starting their paternity leave.

SPP weeks start with the first day of the pay period, for example an SPP period which starts on a Wednesday will have pay weeks within the pay period which run from Wednesday to the following Tuesday.

SPP paid part-weekly

SPP can be paid as part weeks to help employers align the payments to their employee’s normal pay period. The weekly rate may be split into 2 and if it is, the calculation is done on the basis of dividing the weekly rate by 7. For example, if the pay period covers the end of one month and the beginning of the next (2 days in April and 5 days in May) then pay 2/7ths in one month and 5/7ths the next month.

Help and advice

You can get advice from HMRC Employer Helpline.