SMALL EMPLOYERS’ RELIEF COMPENSATION RATE INCREASED FROM APRIL 2026

ASESA Solutions Ltd - SMALL EMPLOYERS’ RELIEF COMPENSATION RATE INCREASED FROM APRIL 2026

Small Employers’ Relief allows eligible employers to reclaim a higher proportion of statutory payments from HMRC.

The rate increased to 9% on 6 April 2026. Employers who qualify for Small Employers’ Relief — if they have paid £45,000 or less in Class 1 National Insurance contributions, can reclaim 100% of all statutory payments they pay, plus an additional 9% compensation. This means small employers can now reclaim 109% from HMRC. The only exception is Statutory Sick Pay, which cannot be reclaimed. 

The compensation rate applies to:

• Statutory Maternity Pay

• Statutory Paternity Pay

• Statutory Adoption Pay 

• Statutory Parental Bereavement Pay

• Statutory Neonatal Care Pay

• Shared Parental Pay

All other employers, paying Class 1 National Insurance contributions, can reclaim 92% of what they pay in these statutory payments.

Conclusion

These changes provide welcome financial relief for qualifying employers and reinforce the importance of accurate payroll management and HMRC compliance.

Reviewing payroll processes early can help businesses maximise available relief and avoid unnecessary administrative issues.