Sick pay and maternity pay increases ahead

Employer at an SME? Get ready to adjust your 2018 budgets and hike payments

First published on Thursday, Aug 13, 2020

Last updated on Wednesday, Nov 29, 2017

2 min read

Employer at an SME? Get ready to adjust your 2018 budgets and hike payments

The government has published new rates for Statutory Maternity Pay (SMP) and Statutory Sick Pay (SSP) that will start on 6th April 2018. So what does it mean for your small business?

First, you need to make sure you increase pay in April next year or risk facing legal action from underpaid and—let’s face it—irate staff. And second, you’ll need to adjust your 2018 budget.

So what are the SSP & SMP rates?

  • Statutory Sick Pay will increase from £89.35 per week to £92.05.

  • Statutory Maternity Pay (and the other family rates like Statutory Paternity Pay) will increase from £140.98 per week to £145.18.

Not a lot, right? Nothing to worry about. Well, not quite.

If your employee takes a full entitlement of sick leave or maternity leave, those numbers add up. And when you have a small business, every penny counts.

SSP will jump by 3%, which means over the full 28-week entitlement you’ll fork out an extra £75.60.

Meanwhile, with a 2.9% rise, SMP leaps a little lower. But over the course of the full 39 weeks’ maternity leave, you’ll shell out another £138.58.

Then why announce the rate rises now?

Some of you will be able to cast your minds back to 2015, which was when the SSP and SMP last saw rate increases (impressive work if you remember, by the way).

The reason they’ve stayed the same for so long is that statutory rates tend to increase every April in line with the consumer price index (CPI), and the 0.1% CPI fall in the year to September 2015 meant there were no rate increases in April 2016.

But in the year to September 2016, CPI has increased by 1% causing the rate increases for 2018.

What can I do now?

Start planning a revised budget for 2018, and make sure you don’t forget to increase statutory rates on your payroll on 6th April 2018.

Find out how BrightHR can help you with your payroll process today.

Need to know more about the statutory rate rises? Call our brilliant BrightAdvice team today on 0844 892 3928.

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