In this article
How to set up Maternity/Paternity Leave in Pento
FAQs & Useful Links can be found at the bottom of the page.
To set up parental leave for an employee, you will need to follow the steps below:
- Navigate to Employees from the left sidebar
- Search for the relevant employee
- Select the Maternity/Paternity tab
- You will need to enter the relevant details:
- Expected due date
This date can be found on the MATB1/SC3 form and is the expected birth date of the baby.
- Leave start date
This is the date that the employee would like to start their parental leave.
- Leave end date
This is the date that the employee would like to return to work.
Average weekly earnings
Average Weekly Earnings (AWE)
You will be able to manually input the Average Weekly Earnings if it hasn't already been automatically calculated by Pento.
You will need to calculate the AWE if you have transferred your payroll from an old provider as Pento will not have enough data to work this out for you.
If you need assistance calculating the Employee's Average Weekly Earnings, you can use HMRC's SMP/SPP calculator.
You will also have the option of including the SMP/SPP as part of the pension calculation. As an employer, you will be obligated to continue pension contributions if the employee has decided to carry on their pensions contributions whilst on parental leave. However, if the employee decides to temporarily opt-out of the pension scheme, as an employer, you can also stop your contributions.
Salary Sacrifice & SMP
As an Employer, you will be obligated to cover the Employee's usual pension contribution. This is because SMP cannot be reduced by any salary sacrifice arrangement. During the period of paid SMP, the Employer should pay the salary sacrifice amount and their normal contribution.
You also have the option to add an enhanced Company Maternity/Paternity pay policy to the Employee, you just need to toggle it on.
Note – You will need to set up your pre-defined policies at company level first. This can be setup by visiting the Policies page under Company.
Setting up Enhanced Maternity/Paternity Pay Policies
To set up an enhanced maternity/paternity pay policy, you need to follow the steps below:
- Navigate to Settings from the left sidebar
- Under the Company heading, select Policies
- Select + Create New Policy
- Select Enhanced maternity pay or Enhanced paternity pay
- Once selected, enter the details of the policy
If you require stages of enhanced pay, see the example below. There are 2 stages: 12 weeks at full pay, and 3 weeks at half pay.
You can add as many policies as you like! Once defined, you will need to add them to the respective employees on the Maternity/Paternity tab on their employee profiles.
Frequently Asked Questions
Why hasn't the AWE been calculated automatically?
You will need to calculate the AWE manually if you have transferred your payroll from an old provider, this is because Pento will not have enough data to work this out for you. You would need to have been processing payroll with Pento during the 'Qualifying weeks' pay period.
Why has Enhanced pay pulled through to the payslip, but not Statutory pay?
Please ensure you have populated the AWE. If the AWE is populated, please see the next question.
Why hasn't the Maternity/Paternity Statutory and/or Enhanced Pay pulled through to the payslip?
Pento will display a warning message, like the below, where an employee is ineligible, and where ineligible the Statutory and Enhanced Pay (if applicable) will not pull through to the payslip.
How is the Enhanced Pay Calculated?
In pay periods where the enhanced pay covers the full month, Pento will automatically top-up the SMP to the equivalent of the Employee's usual monthly salary.
In pay periods where the enhanced pay needs to be pro-rated i.e. if it is exhausted part way through a month, the enhanced pay is calculated based on your day rate method for the days it applies i.e. Calendar month or Yearly working days x applicable days.
I operate a Salary Sacrifice Pension scheme, how do I cover the Employee's contributions during their Parental Leave?
In order to remain compliant, the Employer cannot reduce SMP by any Salary Sacrifice agreement, therefore the Employer will be liable for the Employee's usual contribution, and the Employer's usual contribution. To process this in the payroll, you will need to:
- Go to 'Employees'
- Select Employee
- Go to the 'Pension tab'
- Change the Employee & Employer contributions from a % to a value £
- Set Employee's value to £0
- Set Employer's value to the sum of EE+ER's usual monetary contribution