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HMRC internal manual

Statutory Payments Manual

Paying and Recovering - SMP/SAP/SPP/ShPP: offsetting against other payments

An employer can treat an employee’s wages or any occupational maternity, adoption, paternity or sick payments as payments towards SMP/SAP/SPP/ShPP, or the other way round if:

  • they continue to pay wages for a week in which SMP/SAP/SPP/ShPP is due, even though the employee did not do any work for them, or
  • they make a payment from their own occupational pay scheme for the same week as SMP/SAP/SPP/ShPP.

If these payments are less than the SMP/SAP/SPP/ShPP due the employer must make up the difference.

Jointly funded or employee funded scheme

Payments funded by employees cannot be offset against an employer’s liability to pay SMP/SAP/SPP/ShPP.

If payment is paid from a jointly funded scheme, and it counts as earnings for NICs purposes, that part of the payment funded by the employer can be offset against the employer’s SMP/SAP/SPP/ShPP liability.