Occupational Parental Pay scheme configuration in Payroll Cloud

This guide explains how to set up OPP within the Occupational pay schemes area of Payroll Cloud.

Introduction
Setting up an occupational parental pay scheme
Entitlements
Offset statutory pay
How occupational parental pay is calculated
Scheme matching
Viewing, editing, and managing schemes
Related articles

Introduction

Occupational parental pay (OPP) allows you to pay employees above the statutory minimum during parental leave. You can configure OPP schemes to cover maternity, paternity, adoption, shared parental leave, parental bereavement, and neonatal care absences, with full control over how occupational pay interacts with statutory entitlements.

Companies can configure multiple schemes to suit different employee contracts. An employee's entitlement within a scheme depends on their length of service.

Setting up an occupational parental pay scheme

Go to Company Setup > Occupational Pay Schemes and click + Add scheme.

Complete the following details:

Name - enter a name to help you identify the scheme
Leave type - select the relevant parental leave type (Maternity, Paternity, Adoption, Shared Parental Leave, Parental Bereavement, or Neonatal Care)
Pay frequency - if provided, only employees using that pay frequency will be eligible. Leave blank to match all pay frequencies
Department - if provided, only employees in that department will be eligible. Leave blank to match all departments
Analysis fields - if configured, only employees with matching values will be eligible. Leave blank to match all

Advanced settings

Entitlement behaviour - for parental schemes this must be set to Start of absence. The entitlement is fixed on the first day of absence and does not change during the leave
Offset statutory pay - controls how the occupational top-up interacts with the statutory payment (see below)
Priority - used to determine which scheme applies in the event of a tie. A value of 1 is highest priority
Effective from date - the date the scheme becomes available. Useful for introducing a future-dated scheme or policy change and can be left blank
Effective to date - the date the scheme ends and is no longer available and can be left blank

Click Next step to set up entitlements.

Entitlements

Parental entitlements define how much occupational pay an employee receives, and for how long. You can set up multiple entitlements within one scheme using the + button.

Length of service - the minimum length of service required before this entitlement applies, measured from the employee's start date or continuous service date (continuous service date takes precedence if set)
Length of service basis - select from Days, Weeks, Months, or Years
Full weeks pay - the number of weeks the employee receives 100% top-up
Half weeks pay - the number of weeks the employee then receives 50% top-up. Half-pay weeks run immediately after full-pay weeks with no gap

Entitlements apply per pregnancy or placement and run from the first day of absence. Unlike sick pay schemes, parental schemes do not use rolling or fixed entitlement windows.

For graded entitlements (for example, a longer top-up after two years' service), add additional length-of-service tiers within the same scheme rather than creating a new one.

Offset statutory pay

This setting controls how the occupational top-up interacts with the statutory payment:

Setting	What it does
Yes - offset statutory pay (default)	The employee receives the higher of company pay or statutory pay in each statutory week, not both added together. A negative offset line (for example, SMP offset) appears on the payslip to make this visible
No - apply occupational pay cap	Company pay is added on top of statutory pay, capped so the combined total does not exceed the employee's normal weekly salary. An occupational pay cap line appears on the payslip if the cap reduces the total

The offset setting can also be applied per entitlement, specifically controlling the half-pay weeks within that entitlement. It defaults to the scheme-level setting.

How occupational parental pay is calculated

Daily rate

The occupational top-up is calculated using a consistent daily rate regardless of the employee's salary calculation method:

Company daily rate = Annual salary / 364

This means one complete week of occupational parental pay always equals annual salary / 52.

Occupational parental pay is calculated across all seven calendar days of each entitlement week, including weekends. The total for a full week is unchanged, but partial weeks at pay period boundaries will include weekend days - payslip date ranges will reflect this.

Note: This calendar-day basis applies to the occupational top-up only. The separate Parental Leave deduction (which removes the employee's normal salary during leave) continues to follow the employee's normal salary calculation method.

Week anchoring

Each week of occupational parental pay is counted from the first day of the employee's absence, not a calendar Sunday-to-Saturday week. This keeps occupational pay aligned with how statutory parental pay is anchored.

Disbursement schedule

Occupational pay is spread across pay periods using the same schedule that drives the employee's statutory pay:

Whole weeks - only full statutory weeks completing within the pay period are paid
Monthly (pro-rated) - the weekly entitlement is spread across the calendar days falling within the pay period

Statutory and occupational pay always use the same schedule.

Scheme matching

Where multiple schemes exist for the same leave type, the most precise match wins. For example, a scheme filtered by department takes precedence over one with no filters. Where schemes are equally matched, the priority field resolves the tie. If two schemes are equally precise with no priority set, the pay run will show an error - use the priority field to avoid this.

Viewing, editing, and managing schemes

Once you have set up some schemes, you will be able to view , edit , or delete the scheme.

Use the view icon to review the full scheme setup without the risk of accidental edits.

A scheme's effective date range in the Advanced section can be used to retire it on a future date, supporting planned policy changes.

To update an existing policy (for example, extending entitlement from 26 to 28 weeks), end the existing rule and add a new one dated from when the new terms apply rather than editing the existing rule directly.

Pension considerations during parental leave

Where an employee drops to statutory pay only (with no occupational top-up), their normal salary sacrifice pension contribution can no longer be deducted. At this point the full contribution must be paid by the employer. This change needs to be made manually - see linked guide below for more details.

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