HMRC have issued the following (edited) information on Wednesday 21st January 2026, effective for payments from 6th April 2026.
Dear PAYadvice.UK,
Change to Small Employers Relief rate
Employers can currently reclaim 92% of employees’ Statutory Maternity, Statutory Paternity, Statutory Adoption, Statutory Parental Bereavement, Statutory Neonatal Care and Statutory Shared Parental Pay.
If a business has paid £45,000 or less in Class 1 National Insurance (ignoring any reductions like Employment Allowance) in the last complete tax year they can qualify for Small Employers Relief, and reclaim 100% of the Statutory Payment, and an additional 8.5% compensation. [This rate was introduced from 6th April 2025 having formerly being 3.5%].
From 6th April 2026, the rate of compensation will increase from 8.5% to 9%. Employers who qualify for Small Employers Relief will therefore be able to reclaim 109% from HMRC.
The new 9% compensation rate will apply to the following Statutory Payments:
- Statutory Maternity Pay (SMP)
- Statutory Paternity Pay (SPP)
- Statutory Adoption Pay SAP)
- Statutory Shared Parental Pay (ShPP)
- Statutory Parental Bereavement Pay (SPBP)
- Statutory Neonatal Care Pay (SNCP)
The Small Employers Relief threshold will remain at £45,000.
Please find attached the latest Statutory Maternity, Paternity, Adoption, Shared Parental, Parental Bereavement and Neonatal Care Pay Rates and thresholds for employers 2026 to 2027 guidance, updated to reflect the increased compensation rate. GOV.UK will be updated in due course.
Comment
For the second year in a row, the amount that can be reclaimed on Statutory parental leave payments have been increased. The change is late in the cycle of detail being readied for new tax year payroll changes.
The increases help employers with the costs of supporting parents and families.
PAYadvice.UK resources for April 2026
For more resources on the changes to payroll for April 2026, the following links to the various resources available and a downloadable guide to the changes and associated update values.
PAYadvice.UK 21/1/2026