Statutory Adoption Pay: An Employer's Payroll Guide for 2026/27
Administering Statutory Adoption Pay correctly protects both the business and the employee. This guide is written for employers and payroll teams, covering how to calculate SAP, how much can be reclaimed from HMRC through Small Employers' Relief, what evidence can reasonably be requested, how to handle enhanced contractual schemes, and what to do in edge cases such as a disrupted placement or an employee leaving before their leave starts.
Payroll calculates average weekly earnings over the relevant reference period ending in the employee's matching week, then pays 90% of that figure for the first six weeks of the 39-week paid period. For the remaining 33 weeks, payroll pays whichever is lower: the flat standard weekly rate — £194.32 for 2026/27 — or 90% of average weekly earnings. This mirrors the calculation used for Statutory Maternity Pay exactly, so payroll teams already familiar with SMP calculations can apply the same method and reference period logic to SAP.
SAP is processed through the normal payroll run, with Income Tax and employee National Insurance deducted under the employee's usual tax code, and it should appear on the employee's payslip in the same way as ordinary salary.
Reclaiming SAP from HMRC
Employers reclaim SAP through their regular PAYE reporting, setting the reclaimable amount off against other PAYE liabilities owed to HMRC (Income Tax and National Insurance due from the business) rather than receiving a separate cash refund. Employers whose total Class 1 National Insurance liability falls below the Small Employers' Relief threshold can typically reclaim 100% of the SAP paid plus an additional percentage towards their own employer National Insurance costs on that pay; employers above the threshold usually reclaim a smaller standard percentage without the additional National Insurance compensation.
Evidence Employers Can Request
Employers can reasonably ask for written evidence of the adoption match before paying SAP — typically the matching certificate issued by the adoption agency, confirming the expected placement date. For overseas adoptions, the equivalent evidence is usually the official notification confirming the employee is eligible to adopt from abroad. Because the qualifying event is a match or placement rather than a medical condition, employers should not request medical evidence in the way they might for sickness absence.
Couples Employed by the Same Business
Where both members of an adopting couple work for the same employer, only one can take Adoption Leave and receive SAP for a particular child. The employer should confirm early which partner is claiming, noting that the other may separately be entitled to Statutory Paternity Pay, or that the couple may later choose to convert the remaining balance of leave and pay into Shared Parental Leave and Pay — a distinct process with its own notice periods that the employer would then need to administer alongside the original adoption leave record.
Enhanced Contractual Adoption Pay
Many employers pay more than the statutory minimum through an enhanced contractual adoption pay scheme, often mirroring an existing enhanced maternity pay policy. Where an enhanced scheme is in place, the employer still only reclaims the statutory SAP element from HMRC, subject to the usual Small Employers' Relief rules; the additional contractual top-up is a cost borne entirely by the employer. Employers should apply enhanced pay policies consistently across maternity, paternity, adoption and shared parental pay where practicable, since enhancing one type of family leave pay but not an equivalent one can, in some circumstances, give rise to a discrimination claim.
Record-Keeping Obligations
Employers should retain, for each SAP claim:
The employee's written notice of intention to take Adoption Leave and the requested start date
The matching certificate or overseas adoption eligibility notification
The calculated average weekly earnings and the resulting SAP payment schedule
Records of amounts reclaimed from HMRC through PAYE reporting
HMRC can review these records as part of routine employer compliance activity, and clear documentation also protects the employer if a dispute later arises over the dates of leave or the amount paid.
Disrupted Placements
If a placement is disrupted, or an adoption does not proceed after Adoption Leave and SAP have already begun, the leave and pay already provided are treated as validly given, and the employee is not normally required to repay SAP received in good faith. Employers should seek updated guidance on how the remaining leave period should be handled in this situation, often in consultation with HR policy and, where needed, ACAS or specific HMRC guidance, since continuing leave once it is clear a placement will not proceed needs to be managed sensitively and case by case.
Employees Who Leave Before Leave Starts
If an employee's employment ends before their adoption leave is due to begin, SAP entitlement can still apply for the remaining qualifying weeks in some circumstances, in a similar way to the protection given to employees on maternity pay whose employment ends around the same time. Employers should take specific advice or check current HMRC guidance in this situation, since incorrectly withholding SAP where an employee remains entitled can expose the business to a claim.
How do employers calculate Statutory Adoption Pay through payroll?
Employers calculate average weekly earnings over the relevant reference period ending in the matching week, then pay 90% of that figure for the first six weeks. For the remaining 33 weeks of the 39-week paid period, payroll pays the lower of the flat standard weekly rate — £194.32 for 2026/27 — or 90% of average weekly earnings. SAP is processed through the normal payroll run alongside other pay, with tax and National Insurance deducted as usual, and most payroll software calculates the figure automatically once the employee's start date, average earnings and matching week are entered correctly.
How much of the SAP can an employer reclaim from HMRC?
Employers reclaim SAP through their normal PAYE reporting to HMRC, in the same way as Statutory Maternity Pay. Employers whose total Class 1 National Insurance liability in the qualifying reference period falls below the small employers’ relief threshold can normally reclaim 100% of the SAP paid, plus an additional percentage to help offset employer National Insurance costs on that pay. Employers above the threshold typically reclaim a smaller standard percentage of the SAP paid, without the additional National Insurance compensation. The reclaim is set off against other PAYE liabilities (Income Tax and National Insurance due to HMRC) rather than being paid as a separate refund.
What evidence can an employer request before paying SAP?
Employers can ask for reasonable written evidence that the employee has been matched with a child for adoption, typically the matching certificate issued by the adoption agency, along with confirmation of the expected placement date. For overseas adoptions, evidence usually consists of the official notification confirming the employee is eligible to adopt from abroad. Employers cannot demand medical evidence in the way they might for sickness absence, since the qualifying event is the adoption match or placement rather than a health condition.
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What if two employees who are a couple both work for the same employer?
Only one partner in an adoption can receive Adoption Leave and SAP for a given child, so if both partners work for the same employer, the employer should confirm with both employees which one is claiming Adoption Leave and SAP, and note that the other may separately be entitled to Statutory Paternity Pay, or the couple may later choose to convert the remaining balance into Shared Parental Leave and Pay, which the employer would then need to administer as a distinct process with its own notice requirements.
Can an employer offer more than the statutory minimum SAP?
Yes. Many employers operate an enhanced contractual adoption pay scheme that pays more than the statutory minimum, often mirroring their enhanced maternity pay policy — for example, full pay for a set number of weeks before reverting to the statutory rate. Where an enhanced scheme exists, the employer still reclaims only the statutory element from HMRC (subject to the same small employers’ relief rules); the additional contractual element is a cost borne entirely by the employer. Enhanced schemes should be applied consistently to avoid discrimination claims, particularly where maternity pay is enhanced but adoption pay is not, which can in some circumstances amount to unlawful discrimination.
What records must an employer keep for SAP claims?
Employers should retain the employee’s notice of intention to take Adoption Leave, the matching certificate or overseas adoption evidence, the calculated average weekly earnings and SAP payment schedule, and records of amounts reclaimed from HMRC. HMRC can check these records as part of routine employer compliance activity, and accurate record-keeping also protects the employer if a dispute arises over the amount paid or the dates of leave.
What happens if an employee’s adoption falls through after SAP has started?
If a placement is disrupted or an adoption does not proceed after Adoption Leave and SAP have begun, statutory guidance treats the leave and pay already provided as validly given, and the employee is not required to repay SAP already received in good faith. The employer should seek updated guidance on the remaining leave period, since continuing leave beyond a point where it is clear the placement will not proceed is handled case by case, often in consultation with HR policy and, if needed, HMRC or ACAS advice.
How does Small Employers’ Relief work for SAP reclaims?
Small Employers’ Relief allows an employer whose total Class 1 National Insurance contributions in the relevant qualifying tax year fall below the published threshold to reclaim 100% of the SAP they have paid out, plus a further percentage of that amount to help cover the employer’s own National Insurance contributions on the SAP. Larger employers above the threshold reclaim a smaller standard percentage of the SAP paid, without the additional National Insurance element. The relevant threshold and reclaim percentages are reviewed periodically, so payroll teams should check the current HMRC figures each tax year rather than assuming a fixed percentage applies indefinitely.
Do employers need to pay SAP if the employee leaves before their placement date?
If an employee’s employment ends before their adoption leave is due to start, SAP entitlement can still apply for the remaining qualifying weeks in some circumstances, similar to the protection given to employees on maternity pay who are made redundant or whose employment otherwise ends. Employers should take specific advice or check current HMRC guidance where an employment ends shortly before or during a period when SAP would otherwise be payable, since incorrectly withholding SAP in this situation can expose the employer to a claim.
Disclaimer: Statutory Adoption Pay rates, thresholds and reclaim percentages are reviewed annually and can change. Figures here reflect the general position in 2026/27. Always check the current rates and thresholds at gov.uk before relying on any specific figure.