Are you compliant with statutory payment requirements?
It’s important for your firm to remain at the forefront of financial compliance.
A significant element of this concerns statutory payments, particularly as they have increased following the start of the 2024/25 financial year.
Stay up to date with current rates of statutory payments in order to remain compliant with regulations and maintain relationships with staff and other partners.
Statutory payments – current rates
As an employer, you may be expected to offer statutory payments to employees under certain circumstances when they cannot work for a sustained period of time, such as maternity or adoption leave.
Statutory payments have received a small boost for 2024/25, covering all types of parental pay and sick pay.
Most significantly, pay for parental leave and leave due to illness has risen.
The Statutory Sick Pay (SSP) rate has increased to £116.75 per week.
A new parental pay rate of £184.03 (up from £172.48) has also been introduced and applies to:
- Statutory Maternity Pay (SMP)
- Statutory Adoption Pay (SAP)
- Statutory Paternity Pay (SPP)
- Statutory Shared Parental Pay (ShPP)
- Statutory Parental Bereavement Pay (SPBP)
Managing cash flow when making statutory payments
As an employer, you’ll be responsible for paying statutory payments to employees as well as paying for any additional staff to cover absences.
This can result in challenges to your cash flow, particularly if your firm is relatively small or lacks cash reserves to meet additional costs.
As you know, statutory payments are mandatory for qualifying employees, so it’s important that you plan ahead and build a strategy to support your cash flow during times when you are making these payments.
This could include:
- Improving invoicing processes – By streamlining your billing system, you can reduce the time between performing a service and receiving payment. This could involve more frequent billing cycles, using automated billing software, and implementing stricter follow-up procedures for late payments.
- Reviewing expenditures – Controlling your operating expenses can significantly improve your cash flow, such as through negotiations with suppliers, adopting energy-efficient practices and reducing non-essential costs.
- Optimising necessary cover – Managing your workflows and reallocating work may mean that you can bring in cover staff on a part-time basis.
What is most important is that you ensure you are able to meet the requirements of statutory payments before the need arises, as this could land you in some hot water!
For advice on planning your cash flow and meeting staff costs, contact our expert team today.