When an employee needs time away from work, the employer has two connected tasks: managing the absence fairly and calculating any pay correctly. Those tasks overlap, but they are not identical. An employee’s right to leave and eligibility for statutory pay can depend on different conditions. Your own employment terms may also provide enhanced pay beyond the statutory scheme.
In this article
- Record the leave request and dates
- Check eligibility and required evidence
- Plan payroll and staff cover
- Review payments as circumstances change
Good preparation starts with the circumstances and dates, not a remembered payment rate. Different arrangements apply to sickness, maternity, paternity, adoption, shared parental leave, parental bereavement and neonatal care. Identify the relevant scheme, check its current rules and keep a record of the decision.
Start with a confidential fact sheet
Ask the employee for the information relevant to the particular leave request. That might include the expected date of childbirth, placement information, requested leave dates or the dates of sickness. Do not collect a detailed medical history simply because payroll needs to calculate pay.
Record who received the notice, when it arrived and what evidence is still required. Nominate one person to coordinate employee communication so the employee does not receive competing answers from a manager, the owner and payroll.
| Preparation task | Practical output |
|---|---|
| Identify the scheme | Correct official eligibility guidance and forms |
| Review leave and pay separately | Documented decisions rather than one assumed entitlement |
| Check employment terms | Explanation of statutory and enhanced pay components |
| Confirm dates and evidence | A dated schedule and restricted evidence file |
| Give payroll approved instructions | Start dates, planned payments and review points |
| Plan operational cover | Staffing arrangements independent of the pay calculation |
For maternity, the employer guide explains that leave and pay have different qualification conditions and identifies the evidence needed for pay. Use GOV.UK’s maternity eligibility guidance rather than assuming that every employee receiving leave also qualifies for Statutory Maternity Pay.
Check rules for the actual start date
Statutory rules can change between tax years. Sickness arrangements are particularly vulnerable to outdated checklists copied from an earlier year. Use the current Statutory Sick Pay employer guide and eligibility guidance for the absence being processed, including any transitional arrangements relevant to its dates.
Under the current SSP rules, eligible employees can receive SSP from the first full qualifying day of sickness; the previous waiting-day approach should not be reused. There is no minimum earnings threshold for eligibility. The weekly payment is the lower of the statutory weekly amount and 80% of average weekly earnings, payable for up to 28 weeks. Check the current entitlement rules and eligibility guidance when assessing the absence.
Neonatal care is also a distinct scheme. Employers should check the circumstances, notice requirements and eligibility using the neonatal care pay and leave guide. It should not simply be coded as ordinary holiday because a payroll team has not encountered it before.
If the case involves overlapping schemes, an unusual working pattern or uncertain eligibility, obtain advice before finalising the calculation. A general checklist cannot replace a review of the actual facts.
Turn the decision into a payroll plan
Prepare a schedule showing expected payments by payroll period. Distinguish statutory pay, contractual top-ups and any agreed unpaid period. Explain whether enhanced pay includes statutory pay within the total or sits alongside it, according to the employment terms. That distinction prevents double counting.
Check the calculation inputs, including the relevant earnings history where the scheme requires it. A recent salary change or variable earnings may matter. Have payroll identify the correct reference period rather than substituting the employee’s latest salary automatically.
Also review pensions, benefits and holiday arrangements with the appropriate adviser or provider. The treatment can depend on the type of leave, whether it is paid and the terms of the scheme. Avoid promising that every deduction and contribution simply stops during absence.
Reconcile any statutory-pay recovery separately from the employee’s payment. Unlike recoverable statutory family payments, employers generally cannot reclaim SSP from HMRC; see HMRC’s explanation of statutory payments. HMRC describes using an Employer Payment Summary to claim a reduction in the amount payable to HMRC in its payroll overview. A recovery calculation should be checked against the applicable scheme; it is not a reason to delay pay that is due to the employee.
Illustrative example: planned leave with variable earnings
Suppose a small retailer receives a maternity leave request from an employee whose earnings include occasional overtime. This hypothetical example does not establish anyone’s eligibility.
The employer records the notice and expected dates, obtains the required evidence and asks payroll to assess statutory-pay eligibility using the correct earnings period. The manager separately organises cover. Payroll then prepares a schedule distinguishing statutory pay from the retailer’s contractual enhancement.
Before leave begins, the employee receives a clear explanation of expected pay dates, whom to contact about changes and what happens when the planned arrangements need review. The business includes the payment schedule and any verified recovery in its cash forecast, without treating them as occurring on the same day.
Keep communication and records useful
Give the employee the decision in understandable terms. If statutory pay is unavailable, check the relevant official procedure and required form rather than replying with an unexplained “not eligible”. For changes to the expected return date or leave arrangement, keep a dated record and issue a revised payroll instruction.
Restrict access to supporting evidence. Payroll normally needs the approved information that affects pay; wider circulation of sensitive documents creates unnecessary exposure. Keep a record of calculation reviews and submissions so someone covering payroll can understand the position.
A useful final check is to ask: have we explained the leave decision, the pay decision, the expected payment pattern and the next action? Missing one of those can leave an employee anxious even when the calculation itself is correct.
To discuss payroll administration for employee absences, contact EPOS Accountancy with the scheme involved, expected dates and your existing arrangements. Calculation, reporting and any specialist employment advice should have an agreed scope. Fee information is available on the pricing page.