SSP & SMP Reclaimed Explained: Codes 7010 & 7011

Statutory Sick Pay and Statutory Maternity Pay are paid out by the employer, but a portion — sometimes all of it, for smaller employers — can be reclaimed back from HMRC, reducing the true cost of these payments.

The codes, and what each one holds

Code 7010 — SSP Reclaimed records Statutory Sick Pay recovered from HMRC.

Code 7011 — SMP Reclaimed records Statutory Maternity Pay recovered from HMRC, typically at a higher recovery rate than SSP for eligible small employers. Both sit in Overheads but, since they reduce the overall cost of wages rather than adding to it, they're contra-expense accounts and normally carry a credit balance — the opposite of most Overheads codes.

A worked example

Say a business pays an employee £750 in Statutory Maternity Pay this month, and as a small employer is entitled to reclaim 103% of that from HMRC.

Wages (relevant code): £750 debited when the SMP is paid to the employee.

SMP Reclaimed (code 7011): £772.50 credited (103% of £750), more than offsetting the original cost once the reclaim is received.

Why this matters day to day

Recording the reclaim separately, rather than simply netting it off the wages code, keeps both the full cost of statutory pay and the amount recovered visible — useful for understanding the true net cost of an employee's absence. It's also a code worth checking regularly, since a business that's paid out SSP or SMP but forgotten to claim it back through the payroll software is quietly losing money it's entitled to.