FINANCIAL LITERACY • 30 OCTOBER 2023 • 2 MIN READ
What is Small Employers Relief (SER)?
Small Employers’ Relief (SER) is available to qualifying employers to help fund employees’ statutory pay. Employers can usually reclaim 92% of employees’ statutory pay, including:
- Statutory Maternity Pay (SMP)
- Statutory Paternity Pay (SPP)
- Statutory Adoption Pay (SAP)
- Statutory Shared Parental Pay (ShPP)
- Statutory Parental Bereavement Pay (SPBP)
Small Employers’ Relief enables employers to reclaim 103% of employees’ statutory pay.
Who is eligible
In short, employers qualify for Small Employers’ Relief if employers’ and employee’s Class 1 National Insurance liabilities, before deducting Employment Allowance, totalled £45,000 or less in the last complete tax year before:
- For SMP, SPP and ShPP, the ‘qualifying week’ (15th week before the week of the due date)
- For SAP, the ‘matching week’ (the week the employee was told they’d been matched with a child by a UK adoption agency) or, if adopting from another country, the date of the ‘official notification’.
- For SPBP, the ‘qualifying week’ (the week before the death of the child or stillbirth).
How to claim
Claims are made through your payroll software.
At the beginning or each tax year check your eligibility for Small Employers’ Relief and set the ‘Small Employers’ Relief indicator’ to ‘Yes’.
If you’re using Xero, you can follow the steps below to claim SER, but be sure to tell Xero that you’re eligible to claim.
1. Select ‘Payroll’, and navigate to ‘Payroll Settings’.
2. Click on the ‘HMRC’ tab.
3. Where it says ‘Are you eligible for Small Employers’ Relief?’ select ‘Yes’.
4. Click ‘Save’.
You don’t need to submit an EPS to HMRC at this stage. If not already done, you can also set the indicator to ‘Yes’ before processing the first payroll that includes statutory pay.
Each time you run your payroll including statutory pay, your software will calculate the Small Employers’ Relief to reclaim and will deduct it from the total PAYE and National Insurance liability payable to HMRC.
As well as the usual FPS, you must submit an EPS to HMRC for each payroll run that includes statutory pay.
If you can’t deduct the Small Employers’ Relief amounts from other PAYE and NI liabilities, you will need to write to HMRC after the end of the tax year to request repayment.
Statutory pay can be complicated but Beany can help! Contact us today to get your payroll sorted.
Who are Beany?
We’re an online accounting firm that is always right here for you, your accounting pain relief. The most advanced technology lets us work way more closely with you than a normal accountant would. We have a dedicated team of certified accountants and a support team to take care of your business no matter where you are, so you can focus on growing your business. We take out the ‘fluff’, break down the barriers and get things done. Looking out for you is what we are all about. Get started for free today.
Kate Eastman
Senior accountant
Certified Chartered Accountant and Tax Adviser based in Surrey. I love cheese, chips, chocolate and coastal walks. I dislike horror movies, seafood and traffic jams.
subscribe + learn
Beany Resources delivered straight to your inbox.
Beany Resources delivered straight to your inbox.
Share: