Statutory Adoption Pay: eligibility, forms and records

Your employee may be entitled to Statutory Adoption Pay (SAP) if they adopt a child. This replaces their normal earnings to help them take time off around the time that the child is placed with them.

Whether you’ll have to pay them SAP depends on how long they have worked for you, how much they earn and when the child was placed for adoption. They’ll also have to provide you with evidence related to the adoption and give you notice of when they want you to start paying their SAP.

Payments of SAP count as earnings. You must deduct tax and National Insurance contributions from them in the usual way.

You’ll normally be able to recover some or all of the amounts you have to pay out as SAP.

SAP – an overview

Statutory Adoption Pay (SAP) is paid for 39 weeks and usually covers the first 39 weeks of an employee’s adoption leave. The amount you must pay to eligible employees is the lower of:

• the standard weekly rate – £135.45 from 1 April 2012
• 90 per cent of their average weekly earnings

Joint and individual adoptions

If an employee is adopting on an individual basis, they’ll be eligible for SAP if they meet the relevant criteria outlined in the rest of this guide. Their partner (regardless of gender) may be eligible for Ordinary Statutory Paternity Pay (OSPP).

Where a couple is adopting on a joint basis, then they can choose which partner will take SAP and which will take OSPP.

Ordinary Statutory Paternity Pay: eligibility, forms and records

SAP and adoption leave

An employee doesn’t necessarily have to be eligible for adoption leave in order to qualify for SAP. This is the case for some agency workers, for example. This is because the meaning of ’employee’ for SAP purposes covers anyone for whom you pay secondary Class 1 National Insurance contributions (or would pay them if their earnings were high enough).

Adoption leave and pay

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SAP eligibility – UK adoptions

A person qualifies for Statutory Adoption Pay (SAP) when adopting a child from within the UK provided they have:

• worked for you continuously for at least 26 weeks into the week that the adoption agency told the adopter they had been matched with the child
• average weekly earnings at least equal to the lower earnings limit for National Insurance contributions – £107 a week for 2012-13

Your employee must give you documentary evidence to show that they’re adopting a child through an adoption agency. This is usually a matching certificate or can be a letter from the agency confirming that your employee or the adopter has been matched with a child.

The evidence your employee gives you must show:

• the name and address of the adoption agency and of your employee
• the date the child is expected to be – or was – placed for adoption
• the date the adopter was told by the adoption agency that they’d been matched with a child

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SAP eligibility – overseas adoptions

A person qualifies for Statutory Adoption Pay (SAP) when adopting a child from overseas provided they have:

• worked for you continuously for at least 26 weeks into the week that the adoption agency told the adopter they had been matched with a child
• average earnings at least equal to the lower earnings limit for National Insurance contributions – £107 per week for 2012-13

An employee adopting a child from overseas must give you the following evidence to prove their entitlement to SAP:

• a copy of the Official Notification from the relevant UK authority that they have agreed that your employee is suitable to adopt a child from overseas
• a declaration that they are claiming SAP, and not Statutory Paternity Pay – they can use form SC6 for this purpose
• evidence of the child’s date of entry into the UK, such as a plane ticket or copies of entry clearance documents – you should keep a copy for your records

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If an employee doesn’t qualify for SAP

If your employee doesn’t qualify for Statutory Adoption Pay (SAP) you must give them form SAP1, ‘Non-payment of SAP’.

Find form SAP1 on the HM Revenue & Customs (HMRC) website – Opens in a new window

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Paying and recovering SAP

If you use commercial payroll software, it will help you decide if Statutory Adoption Pay (SAP) is due and do most of the calculations for you. Or you can use HM Revenue & Customs’ (HMRC’s) free SAP calculator – which is part of their Basic PAYE Tools package. This will:

• tell you if your employee’s entitled to be paid SAP
• work out how much SAP is due
• work out how much SAP you can recover – including compensation, if you’re entitled to it

Where to get HMRC’s free SAP 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, National Insurance contributions (NICs) and Student Loan deductions every pay day with a linked P32 Employment Payment record that works out what you need to pay HMRC
• interactive forms such as P11D Expenses and benefits form and working sheets
• a Learning Zone – including interactive learning material on SAP

Using HMRC’s Basic PAYE Tools

Calculating and recovering SAP

You’ll be able to recover at least 92 per cent of the SAP you have to pay. If your total National Insurance payments are £45,000 a year or less, you are entitled to recover 100 per cent and an additional amount of 3 per cent of the SAP you have to pay. This is to compensate you for the employer’s NICs you have to pay on the SAP.

You can recover SAP by deducting it from your monthly PAYE payments. Or you may be able to ask HMRC for funding in advance. For more information, read our guide get help with statutory payments funding.

Our guide on calculating and recovering SAP explains in detail how to calculate, pay and recover SAP.

How to calculate and recover Statutory Adoption Pay

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If your employee stops working for you

These rules apply regardless of whether an employee decides voluntarily to stop working for you or whether you have dismissed them.

UK adoptions

If you have already started payment of Statutory Adoption Pay (SAP) when an employee’s employment with you ends, you must continue to pay it unless the person starts work for another employer.

If the employee’s employment with you ends before your payment of SAP to them begins, then you must still pay it. Payments should begin on the later of:

• the day following the employee’s last day at work
• 14 days before the child’s placement

Overseas adoptions

If you have already started payment of SAP when an employee’s employment with you ends, you must continue with payments unless the person starts work for another employer.

If the employee’s employment with you ends before your payment of SAP to them begins, you must still pay SAP provided both the following apply:

• the adopted child enters the UK within 26 weeks of the end of the employment
• the employee doesn’t begin work with another employer

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SAP and ‘keeping in touch’ days

Your employee can work for you for up to ten days during their Statutory Adoption Pay (SAP) period without losing any of their SAP entitlement. These are known as ‘keeping in touch’ or KIT days.

However, if the employee does any work for you during the SAP period once these ten days have been used up, then you must not pay SAP for the week(s) in which this additional work is done.

For more information, see the page on contact and work during adoption leave in our guide on adoption leave and pay.

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When to stop paying SAP

Normally, you stop paying Statutory Adoption Pay (SAP) after 39 weeks. You must stop earlier than this if any of the following applies to your employee:

• they return to work for you within their 39-week SAP period (unless these are ‘keeping in touch’ days – see the page in this guide on SAP and ‘keeping in touch’ days) – however, if they stop work again while still in the SAP period, you must resume SAP payments
• they work for another employer, who didn’t employ them during the matching week
• they’re arrested or put in prison
• they die

You must also stop paying SAP if the adopted child dies or stops living with the main adopter. However in these cases, you must wait for eight weeks before ending payments of SAP, unless the employee has returned to work.

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SAP forms and records

There are various forms that you’ll need to use for dealing with Statutory Adoption Pay (SAP) – SAP1, SAP2 and SC6. You can use your own forms instead of these, but they must include the same information and declarations. You can get copies of all HM Revenue & Customs (HMRC) adoption forms by downloading them using the link below.

Form SAP 1 is also included in the Basic PAYE Tools package.

Find employer forms on the HMRC website – Opens in a new window

Form SAP1 Non-payment of SAP

If you determine that your employee isn’t entitled to be paid SAP, you must tell them about your decision. You can do this using form SAP1.

Form SAP2 Statutory Adoption Pay record sheet

You’ll need to keep a record of SAP. You can use this form for keeping your record.

Form SC6 Statutory Adoption Pay and adoption leave when adopting from abroad

You should use this form to tell your employee the terms and conditions for SAP when they’re adopting the child jointly with their partner. It includes a declaration they must sign to say that they don’t want to receive paternity leave and Ordinary Statutory Paternity Pay. Your employee should give this to you as part of the evidence you’ll need before you can pay SAP.

Find form SC6 Statutory Adoption Pay and adoption leave when adopting from abroad on the HMRC website – Opens in a new window

Record keeping

The records you’ll need to keep include:

• the evidence from the adoption agency that your employee gave you – or a copy if you handed it back with form SAP1
• the payment dates and amount paid – you can use form SAP2
• the date the pay period began
• any weeks in the 39 week period when SAP wasn’t paid and the reason why

As well as recording payments on SAP2, you must also use the following to keep records of the payments of SAP you make and the amounts you recover:

• form P11 or an equivalent employee payroll record (either electronic or paper) – if you’re using a paper form P11 complete column 1j and include the SAP in gross pay in column 2 for each week or month that you pay SAP
• form P14 End of Year Summary – you only have to show the SAP paid to each employee in months when you recovered some or all of it
• form P35 Employer Annual Return – you only have to show the total amount of SAP recovered in the year and any amount of National Insurance contributions compensation you received

Remember that almost all employers are required to file their Employer Annual Return (forms P35 and P14) online to HMRC. For more information, including details of the exemptions that apply, see our related guide ‘File your Employer Annual Return: P35 and P14’.

If you use the Simplified Deduction Scheme for domestic employees there are different forms to use:

• P12 Simplified Deduction Card – if you’re recovering some or all of the SAP, record all the payments of SAP you make to your employee each week or month
• P37 Employer Annual Return

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 SAP and about using your own forms in HMRC’s publication E16, ‘Employer Helpbook for Statutory Adoption Pay’. You’ll also find information on record keeping.

Download E16 Employer Helpbook for Statutory Adoption Pay on the HMRC website (PDF, 473K) – Opens in a new window

Payroll calculations and records: an introduction

File your Employer Annual Return: P35 and P14s

Simplified PAYE for domestic employees

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If an employee disagrees with your SAP decision

You may determine that your employee isn’t entitled to Statutory Adoption Pay (SAP). You must explain the reason for your decision to your employee. You can do this using form SAP1. Make a copy of the evidence from the adoption agency that your employee gave you and give the original back to your employee with form SAP1. You must do this within 28 days of the seven day period that starts on the date the adopter was notified as being matched with a child.

If your employee doesn’t agree with you, they have the right to ask you for a written statement showing:

• the days – if any – for which you think you should pay SAP
• how much SAP you think your employee is entitled to
• why you don’t think you should pay SAP for other days in the pay period

Your employee can ask for a written statement at any time. If the request is reasonable you must give them the statement within a reasonable time – for example, within seven days of being asked for it.

If you and your employee can’t agree how much SAP you should pay you can ask HM Revenue & Customs (HMRC) for guidance. You’ll find the phone number to call on the page in this guide on help and advice. Your employee can also ask HMRC for a decision if you can’t agree.

Find form SAP1 ‘Non-payment of SAP’ on the HMRC website – Opens in a new window

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SAP help and advice

You can ask a question through HM Revenue & Customs’ (HMRC’s) email query service.

Use HMRC’s email query service to send a question about SAP

Alternatively you can call the HMRC Employer Helpline on Tel 08457 143 143 – Opens in a new window.

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