If a PAYE scheme paid £45,000 or less in Class 1 National Insurance in the last complete tax year, they will be entitled to Small Employers’ Relief (SER).
This applies for the following payments:
- Statutory Maternity Pay (SMP);
- Statutory Adoption Pay (SAP);
- Statutory Paternity Pay (SPP);
- Statutory Parental Bereavement Pay (SPBP);
- Statutory Neonatal Care Pay (SNCP); and
- Statutory Shared Parental Pay (ShPP)
Claiming the SER means that rather than reclaiming 92% of the value of the above payments, the Scheme can reclaim 100% + 8.5% National Insurance Compensation (NICs Comp), i.e. 108.5%. The reclaim is done via the Employment Payment Summary (EPS) and should be automatic if the Scheme is flagged as being ‘small’ in payroll software.
On 21 January 2026, HMRC advised software developers that from 6 April 2026, the rate of NICs Comp will increase from 8.5% to 9%. Qualifying employers will be able to reclaim 109% from HMRC.
For Bookkeepers
Note that when performing the National Insurance calculation, ignore any reductions given by claiming the Employment Allowance.
Changes to Statutory Paternity Leave from April 2026 may have the consequence of bringing more people into payment (as Statutory Paternity Pay). Therefore, the increase, albeit small, is welcome.
