Small Employers’ Relief sees another uplift

HMRC confirmed on 22 January 2026 that the Small Employers’ Relief (SER) compensation rate will increase to 9% for the 2026–27 tax year. This marks the second consecutive uplift, following a rise from 3% to 8.5% in 2025–26. For many small employers, this further increase will provide welcome additional support at a time when statutory payment costs continue to place pressure on cashflow.

Under the SER rules, employers with Class 1 NICs of £45,000 or less in the previous tax year can reclaim 100% of statutory payments, along with the new 9% compensation rate. This applies across maternity, paternity, adoption, shared parental, parental bereavement and, from April 2026, neonatal care pay. Employers who fall outside the SER criteria can usually reclaim 92% of statutory payments.

For eligible businesses, the increased rate represents a modest but meaningful improvement in cashflow support, particularly during periods where statutory payments are more concentrated or prolonged. It also reflects HMRC’s continued efforts to ease the administrative and financial burden on smaller employers as the statutory pay landscape evolves.

If you would like to discuss how the change may affect your organisation, or need assistance planning for the 2026–27 tax year, our specialist team is ready to support.