How FreeAgent handles statutory pay

This article explains which statutory payments are currently supported in FreeAgent and how these are handled.

FreeAgent supports the reclaiming of statutory maternity pay, statutory paternity pay, statutory adoption pay, statutory parental bereavement pay, shared parental pay and statutory neonatal care pay. However, the reclaiming of statutory sick pay is not currently supported. Statutory sick pay can be entered into a payroll profile and onto a payslip in FreeAgent but will not be reclaimed.

If an employee receives the same amount of statutory payments each month, you can enter the appropriate statutory pay in their new or existing payroll profile as described below. However, if the employee will be receiving a different amount each month, you will need to edit the relevant payslip each month before filing the payroll to HMRC.

Small employers

Small employers are those that pay less than £45,000 a year in employer’s NI, excluding any reductions such as Employment Allowance. When a small employer pays statutory pay to one of its employees - which could be maternity, paternity, adoption or parental bereavement pay - HMRC will reimburse that pay plus 9%. FreeAgent supports the full 109% reclaim of statutory pay for small employers as described above.

Please note that if your business does not qualify as a small employer and can only reclaim 90% of the statutory pay, you will not be able to use FreeAgent’s payroll to reclaim the statutory pay. Instead, you will need to file your payroll outside of FreeAgent and create journal entries to record the payroll in your FreeAgent account.

Adding statutory pay to a new payroll profile

You'll add statutory pay as part of the process of creating a new payroll profile.

Navigate to the ‘My Money’ tab at the top of the screen and select ‘Payroll’ from the drop-down menu.

Select ‘Add to Payroll’ from the right-hand side of the ‘Employees’ section and select the employee’s name from the drop-down menu. If the employee’s name does not appear in the drop-down menu, select 'Create a new user' to add them as a user.

Please note that each employee should have their own payroll profile and a profile should never be updated and used for another employee.

Scroll down to the ‘Is this employee receiving statutory pay?’ section, select ‘Yes’ and enter the relevant details.

Please see below for details on adding Statutory Parental Bereavement Pay Northern Ireland (SPBPNIRE).

Once you’ve entered the appropriate statutory pay, enter the remaining information and select 'Create Payroll Profile' to complete the process. Find out more about how to create a payroll profile.

Adding statutory pay to an existing payroll profile

Navigate to the ‘My Money’ tab at the top of the screen and select ‘Payroll’ from the drop-down menu.

Select ‘Edit Profile’ on the right-hand side of the ‘Employees’ section next to the relevant employee’s name.

Scroll down to the ‘Is this employee receiving statutory pay?’ section, select ‘Yes’ and enter the relevant details.

Please see below for details on adding Statutory Parental Bereavement Pay Northern Ireland (SPBPNIRE).

To complete the process, select ‘Update Payroll Profile’ at the bottom of the screen.

Statutory Parental Bereavement Pay Northern Ireland (SPBPNIRE)

From 6th April 2026, HMRC introduced a new statutory provision of Statutory Parental Bereavement Pay for eligible employees employed in Northern Ireland who have either:

• experienced a miscarriage after 6th April 2026, or
• experienced the death of a child under 18 or a stillbirth after 24 weeks, even if they haven't had 26 weeks or more continuous employment with the business

If you're unsure whether an employee is eligible for Statutory Parental Bereavement Pay Northern Ireland, please speak to your accountant and/or HMRC.

To add this to an eligible employee's payroll profile, select 'Yes' to 'Is this employee receiving Statutory Parental Bereavement Pay?' and tick the 'This employee is employed in Northern Ireland' checkbox.

Please note that you'll be asked to provide sensitive details about the employee.

If the employee has experienced a miscarriage, select 'Yes' to 'Has the employee experienced a miscarriage?' and in the relevant fields enter the workplace postcode and amount of Statutory Parental Bereavement Pay in Northern Ireland.

If the employee hasn't experienced a miscarriage, select 'No' to 'Has the employee experienced a miscarriage?' and select whether the employee has 26 weeks or more continuous employment.

If the employee has 26 weeks or more continuous employment, they may be entitled to Statutory Parental Bereavement Pay but not Statutory Parental Bereavement Pay in Northern Ireland. Select 'Yes' and enter the amount of Statutory Parental Bereavement Pay in the field provided.

If the employee doesn't have 26 weeks or more continuous employment, select 'No' and enter the workplace postcode and amount of Statutory Parental Bereavement Pay in Northern Ireland in the fields provided.

Adding statutory pay to a payslip

If the employee will be receiving a different amount each month, you'll need to edit the relevant employee’s payslip before filing the payroll to HMRC.

Navigate to the ‘My Money’ tab at the top of the screen and select ‘Payroll’ from the drop-down menu.

Select ‘Prepare Month [X] Payroll’ in the top-right of the screen. ‘X’ will be the number of the month for which you’re filing payroll.

Select ‘Edit Payslip’ to the right of the relevant employee’s name.

Scroll down to the ‘Statutory Pay’ section and enter the relevant details.

Select ‘Save Changes’ at the bottom of the screen to complete the process. Find out more about how to review and edit payslips.

Repeat these steps each month before filing the payroll to HMRC.

How FreeAgent handles statutory pay

Once you have added statutory pay to a payroll profile or payslip, FreeAgent will automatically add the appropriate amount to the employee’s payslip when you prepare and run payroll each month.

FreeAgent will automatically reclaim the statutory pay at 109%, and file both a Full Payment Submission (FPS) and Employer Payment Summary (EPS) to HMRC for you. You’ll see confirmation of this in the ‘Payroll Summary’ panel in FreeAgent.

In the accounting reports, the small employers’ relief is adjusted automatically through the relevant Employer NICs category which reduces the total PAYE/NI liability to HMRC.

If you receive an advance lump sum payment of statutory pay from HMRC, find out how to process statutory pay received in advance.