How to calculate and recover Statutory Adoption Pay

You may be able to recover some or all of the Statutory Adoption Pay (SAP) you pay. How much you can recover depends on the amount of Class 1 National Insurance contributions (NICs) you pay a year.

Your payroll software may work out your SAP payments and how much you can recover. Or you can use a SAP calculator provided by HM Revenue & Customs (HMRC).

You can also work out SAP manually using the SAP tables, but using payroll software or one of HMRC's SAP calculators saves time and helps avoid mistakes.

On this page:

Information you'll need to work out SAP

Whichever method you use to work out SAP and recovery of SAP you'll need to gather together the same information.

Information needed to calculate SAP

Before you can start to calculate your employee's SAP, you'll need:

  • a copy of the matching certificate - or in the case of an adoption from abroad, a copy of the Official Notification from the relevant UK authority that they've agreed that your employee is suitable to adopt a child from overseas
  • the date the child's expected to be placed with your employee or to enter the UK
  • your employee's gross pay and the dates it was paid in the 'relevant period' - for a definition please read HMRC's publication E16, 'Employer Helpbook for Statutory Adoption Pay' - link below
  • the date your employee started working for you
  • confirmation that your employee's gross earnings are liable to employers' Class 1 NICs

Download E16, 'Employer Helpbook for Statutory Adoption Pay' (PDF 381K)

Information needed to work out what you can recover

To work out how much of the SAP payments you can recover you'll need to know:

  • the amount of SAP you're liable to pay - this is worked out automatically if you use HMRC's SAP calculator or commercial software that has its own SAP calculator
  • how much your Class 1 NICs (employer's and employees') were for the 'relevant tax year' - you can get this figure from your Employer Annual Return form P35

To decide which is the 'relevant tax year' for working out the total NICs you pay in a year, see the section in this guide ' Calculate SAP recovery manually'.

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Calculating and recovering SAP using HMRC's calculators

Online calculator

HMRC's online SAP calculator works out how much SAP you'll have to pay and how much you can recover. It's easy to use and does everything for you. The online calculator will work out for you:

  • whether your employee is entitled to be paid SAP
  • the amount of SAP you should pay
  • how much you can recover

You can print the figures worked out by the SAP calculator so they're ready to enter in:

  • the P11 Calculator that comes as part of HMRC’s Basic PAYE Tools package
  • your commercial software - but this may have its own SAP calculator
  • a paper form P11

Downloadable calculator

A set of Basic PAYE Tools are now available to download straight to your computer. In addition to calculators for SAP and other statutory payments, the tools include:

  • an employer database on which you can record your employees' details
  • a P11 calculator that will work out and record your employees' tax, NICs and student loan deductions every pay day with a linked P32 Employment Payment record that works out what you need to pay to HMRC
  • interactive forms such as P11D working sheets
  • a Learning Zone - including interactive learning material on SAP

Use the online SAP calculator

Download Basic PAYE Tools from the Business Link website (Opens new window)

Payroll calculations and records: an introduction

Download E16, 'Employer Helpbook for Statutory Adoption Pay' (PDF 381K)

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Calculating SAP manually

If you want to calculate your SAP payments manually you'll have to know how to work out:

  • whether your employee has worked for you long enough
  • whether they earn enough
  • how much to pay them

Your employee is entitled to SAP for up to 39 weeks. You must pay them the lower of:

  • £128.73 - from 3 April 2011
  • 90 per cent of their average weekly earnings

You'll find guidance on how to work out average weekly earnings in HMRC's publication E16, 'Employer Helpbook for Statutory Adoption Pay'. Read the section 'Quick method for calculating Average Weekly Earnings (AWE)'.

Download E16, 'Employer Helpbook for Statutory Adoption Pay' (PDF 381K)

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Calculate SAP recovery manually

How much SAP you can recover depends on the total amount of employer and employee Class 1 NICs you pay in the 'relevant tax year'.

The 'relevant tax year' is the tax year immediately before the tax year in which your employee's 'matching week' falls (this being the week in which they were told they'd been matched with a child).

You'll find the total of your employer and employee NICs for the tax year on your copy of form P35 Employer Annual Return.

If your annual liability for Class 1 NICs is £45,000 or less

If your Class 1 NICs are £45,000 or less in the relevant tax year, you can recover 103 per cent of your SAP payments made in the same tax month. For 2011-12 this is made up of:

  • 100 per cent of the SAP
  • 3 per cent of the SAP - this is an additional amount as compensation for the employer's Class 1 NICs you'll have paid on the SAP

If your annual liability for Class 1 NICs is more than £45,000

If your Class 1 NICs are more than £45,000 in the relevant tax year, you can recover 92 per cent of the total of all payments of SAP made in the same tax month.

You might have paid no Class 1 NICs in the relevant tax year - or only paid them for part of it. In this case, you'll need to check to see if you were paying them at the rate of more than £45,000 a year. You do this by working out your average monthly payment and multiplying that by 12.

You'll find a full explanation of how to work out how much SAP you can recover in HMRC's publication E16, 'Employer Helpbook for Statutory Adoption Pay' - read the section 'Recovering SAP'. This explains what period to use to work out your average monthly payment if you paid no NICs for the relevant year, or if you only paid them for part of it.

Download E16, 'Employer Helpbook for Statutory Adoption Pay' (PDF 381K)

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Advance funding for SAP

If you don't have sufficient payroll deductions available to cover the SAP you're entitled to recover, you may be able to apply for funding from HMRC. Follow the link below for more information.

Get help with statutory payments funding

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SAP and salary sacrifice schemes

If you provide benefits to your employees under a salary sacrifice scheme, this can have an impact on SAP. Follow the link below for guidance on this issue.

Salary sacrifice: an overview for employers

Find out about the impact of salary sacrifice arrangements on SAP (PDF 133K)

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Help and advice

Follow the links below to find out more about SAP.

Statutory Adoption Pay - an overview

Download E16, 'Employer Helpbook for Statutory Adoption Pay' (PDF 381K)

Quick answers to common questions on SAP

If you still can't find what you need, you can ask a question through HMRC's email query service.

Use the SAP email query service

Alternatively you get advice from HMRC's Employer Helpline

Find contact details for HMRC’s Employer Helpline

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