Managing Adoption – Calculating Adoption Pay

Written by Andrew Johnson, Founder and CEO HRGuide - Thu 24th Oct 2024

Employees who qualify for adoption leave will also qualify for statutory adoption pay provided that their average weekly earnings are not less than the lower earnings limit for national insurance contributions. Statutory adoption pay is payable for up to 39 weeks at the standard rate or at 90% of the Employee’s average weekly earnings, whichever is lower. Statutory adoption pay is treated as earnings and is therefore subject to PAYE and national insurance deductions.

An employee’s entitlement to Adoption Pay will depend on a number of factors, including their length of service with the Company and their average earnings in the eight weeks prior to the adoption agency has told them they had been matched with a child. They will be entitled to Statutory Adoption Pay (SAP) if:

  1. They have completed 26 weeks continuous employment with the Company into the week that the adoption agency told the adopter they had been matched with a child.
  2. They have average weekly earnings of LEL for the period of 8 weeks ending with the date the adoption agency had told them they have been matched with a child and
  3. They have notified the Company of their entitlement to SAP (see Notification Requirements below).

Adopters who have average weekly earnings below the Lower Earnings Limit for National Insurance Contributions do not qualify for SAP. They should contact their adoption agency as they may be able to receive financial support in relation to their adoption payment. Additional financial support may be available through Housing Benefit, Council Tax Benefit or Tax Credits.

What will you pay and when?

The maximum entitlement to SAP is 39 consecutive weeks payment as follows:

  1. For the first 6 weeks of Ordinary Adoption Leave, you will pay 90% of their usual earnings (that is their average earnings in the 8 weeks ending with the date the adoption agency had told them they have been matched with a child) or SAP, whichever is the lower.
  2. For the remaining 33 weeks you will pay them either 90% of their usual earnings (as above) or SAP, whichever is the lower.
  3. The Adoption Pay Period (APP) may start on any day of the week. (This means the employee will start to receive their adoption pay at the beginning of their adoption leave.
  4. An employee on adoption leave can do some work for you (the employer) while you are paying them SAP during their adoption pay period under their contract of service without losing SAP for that week. They can work for up to 10 days, whether consecutive or not. This allows your employee to undertake odd days training or to go into work to ‘Keep in Touch’ (KIT).
  5. Your employee would not lose their SAP for the week in which the work is done or need to end their adoption leave. Whether your employee comes into work for one hour or a
  6. whole day, it should be still counted for KIT purposes.

IMPORTANT: Both the employer and the employee must agree that these days may be worked and the arrangements including what work they will be doing and how much they will be paid. You have no right to demand that any such ‘KIT’ is undertaken, and your employee has no right to undertake such work.

  1. All earnings are subject to statutory deductions (for income tax and national insurance) if they apply.
  2. If they return to work before the end of their Ordinary Adoption Leave, their entitlement to SAP ends.
  3. Pay the employee their SAP in the same way on the same day as you normally pay them.