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.

Real-world examples across industries

Small employer — enhanced recovery

A small nursery with total employer Class 1 NI liability below the qualifying threshold in the previous tax year pays an employee £3,000 in Statutory Maternity Pay over a month and, as a small employer, is entitled to reclaim 103% of it under Small Employers' Relief. Once HMRC pays the reclaim across, the entry is a debit of £3,090 to 1200 (Bank Current Account) and a credit of £3,090 to 7011 (SMP Reclaimed) — no VAT involved, since this is a payroll reclaim rather than a trading transaction. The extra 3% compensates a small employer for the administrative burden of running the scheme, and childcare, care and education providers see this code used more often than most simply because their workforce is predominantly female.

Larger employer — standard rate, and SSP's near-dormant twin

A larger logistics firm above the Small Employers' Relief threshold pays the same £3,000 of SMP to an employee but can only reclaim at the standard rate of 92%, so £2,760 is debited to 1200 and credited to 7011 (SMP Reclaimed) once received — the remaining £240 is a genuine net cost of the maternity leave, not just a timing difference. Code 7010 (SSP Reclaimed) sits alongside it but rarely carries any entry at all today: the general scheme letting employers reclaim Statutory Sick Pay was withdrawn in 2014, and the temporary Coronavirus SSP Rebate Scheme that briefly reopened it has since closed. For most employers, whatever their size or sector, SSP paid to staff is now simply an unrecoverable cost sitting in the ordinary wages codes.

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.