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Your employee may be entitled to Ordinary Statutory Paternity Pay (OSPP) if their partner has a baby or adopts a child. This replaces their normal earnings and helps them take time off to care for the child or support the mother.
As their employer, whether you have to pay them OSPP depends on how long they've worked for you, how much they earn and when the baby is due or the date of adoption. They'll also have to provide you with a declaration covering family commitment and give you notice of when they want you to start paying their OSPP.
Payments of OSPP count as earnings. You must deduct tax and National Insurance contributions (NICs) from them in the usual way.
You'll normally be able to recover some or all of the OSPP you pay.
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Your employee may be entitled to ordinary paternity leave and OSPP for birth if they have responsibility for the baby's upbringing, are taking time off to support the mother or care for the baby and they're either:
Where a couple adopts a child, the partner, male or female, who's not claiming Statutory Adoption Pay (SAP) may be able to claim OSPP. Your employee may be entitled to ordinary paternity leave and OSPP for adoption if they’re either:
In this situation, the adoption must also be being arranged through an adoption agency in the UK, or for adoption from abroad the adopter has to have received Official Notification.
Your employee is entitled to ordinary paternity leave if both of the following apply:
The date an adopted child is expected to be placed is shown on the matching certificate from the adoption agency.
Your employee is entitled to take one or two weeks' ordinary paternity leave within 56 days of the date of the baby's birth or the date an adopted child is placed with the adopter. They can't take odd days off and if they take two weeks they must take them together.
If your employee is entitled to ordinary paternity leave they may also be entitled to OSPP for the period of their leave. They'll be entitled to OSPP if they have average earnings at least equal to the NICs Lower Earnings Limit (LEL) - £102 a week or £442 a month for 2011-12.
Your employee should tell you that they'll be taking ordinary paternity leave by the 15th week before the date the baby's due, or within seven days of the date the adopter was told they'd been matched with a child. And they should give you 28 days' notice of when they want their OSPP to start.
If your employee is entitled to OSPP, you must pay them the lower of:
You'll be able to recover at least 92 per cent of the OSPP you have to pay. If your total National Insurance payments are £45,000 or less a year, you'll be able to recover 100 per cent of the OSPP and an additional amount of 3 percent of the OSPP you have to pay from 6 April 2011. This is to compensate you for the employer's NICs you have to pay on the OSPP.
You can recover OSPP by deducting it from your monthly PAYE (Pay As You Earn) payments. Or you can ask HM Revenue & Customs (HMRC) for funding in advance.
If your employee's earnings are below the LEL, or they're not entitled to OSPP for some other reason, they may be entitled to other financial support from the Department for Work and Pensions (DWP).
Get help with statutory payments funding
HMRC's guide on dealing with calculating and recovering OSPP explains in detail how to calculate, pay and recover statutory pay. There's a link to it at the end of this section.
If you use payroll software, it may help you decide if OSPP is due and make the calculations for you. Or you can use HMRC's free statutory pay calculator in the Basic PAYE Tools package - which is available on the Business Link website.
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A set of Basic PAYE Tools are now available to download straight to your computer. In addition to calculators for statutory payments, the tools include:
Download Basic PAYE Tools from the Business Link website (Opens new window)
Calculating and recovering OSPP
There are various forms that you'll need to use for dealing with OSPP:
You should use one of these forms to tell your employee about the terms and conditions that apply for OSPP. Each form includes a tear-off statement where the employee must tell you about dates and leave. There is also a declaration they must sign confirming that they're entitled to ordinary paternity leave and OSPP.
Bear in mind that although you can allow ordinary paternity leave without a signed statement you mustn't pay OSPP without it.
Go to form SC3 Becoming a parent
Go to form SC4 Becoming an adoptive parent
Go to form SC5 Ordinary Statutory Paternity Pay and paternity leave when adopting from abroad
If you determine that your employee isn't entitled to be paid OSPP, you must tell them about your decision. You can do this using form OSPP1.
Go to form OSPP1 Non-payment of Ordinary Statutory Paternity Pay (OSPP)
You'll need to keep a record of the OSPP you pay and any changes in dates. You can use this form for keeping your record.
Go to form OSPP2 Ordinary Statutory Paternity Pay Record Sheet
The records you'll need to keep include:
As well as recording payments on OSPP2, you must also use the following to keep records of the payments of OSPP you make and the amounts you recover:
Remember that almost all employers are required to file their Employer Annual Return (form P35 and forms P14) online to HMRC. For more information, including details of the exemptions that apply, follow the link at the end of this section.
If you use the Simplified Deduction Scheme for domestic employees there are different forms to use:
You must keep all these records for at least three years after the end of the tax year they relate to.
You can find out more about the forms you'll need for dealing with OSPP and about using your own forms in HMRC's publication E19, 'Employer Helpbook for Ordinary and Additional Statutory Paternity Pay'. You'll also find information on record keeping.
Download E19, 'Employer Helpbook for Ordinary and Additional Statutory Paternity Pay' (PDF 270K)
Payroll calculations and records: an introduction
Filing your Employer Annual Return online: P35 and P14s
Simplified PAYE for domestic employees
If you determine that your employee isn't entitled to OSPP you must explain the reason for your decision to them. You can do this using form OSPP1. Make a copy of your employee's declaration - form SC3, SC4 or SC5 - and give the original back to them.
If your employee doesn't agree with you, they have the right to ask you for a written statement showing:
Your employee can ask for a written statement at any time. If the request is reasonable you must give them the statement within a realistic time - for example, within seven days of being asked for it.
If you and your employee can't agree how much OSPP you should pay, you can ask HMRC for guidance by calling the Employer Helpline - you'll find a link to their contact details in 'Help and advice' below. Your employee can also ask HMRC for a decision if you can't agree.
Go to form SPP1 Non-payment of Ordinary Statutory Paternity Pay (OSPP)
You can find quick answers to the most commonly asked questions about OSPP by following the link below.
Quick answers to common questions on OSPP
If you still can't find what you need, you can ask a question through HMRC's email query service.
Use the OSPP email query service
Alternatively you can get advice from HMRC's Employer Helpline.
Find contact details for HMRC's Employer Helpline
You'll find detailed guidance on OSPP in HMRC's publication E19, 'Employer Helpbook for Statutory Paternity Pay'.
Download E19, 'Employer Helpbook for Ordinary and Additional Statutory Paternity Pay (PDF 270K)
There's an interactive tool on the Business Link website that can help you make the right decisions about what leave, pay and other benefits your employee is entitled to and your obligations regarding their return to work. By answering a few simple questions, you'll get a clear idea of your responsibilities and some best practice guidance.
