Statutory Maternity Pay
Statutory Maternity Pay (SMP) is a legal entitlement for eligible employees who take maternity. As an employer, you are responsible for assessing eligibility, calculating payments, and ensuring compliance with HMRC regulations.
Eligibility criteria
An employee qualifies for SMP if they:
- Have been continuously employed for at least 26 weeks up to the 15th week before the expected week of childbirth
- Earn at least £123 per week (before tax) in the 8-week period leading up to the qualifying week
- Provide proof of pregnancy (e.g. MATB1 form)
- Give at least 28 days’ notice of their intention to take maternity leave
SMP payment structure
SMP is paid for up to 39 weeks:
- First 6 weeks: 90% of the employee’s average weekly earnings (AWE)
- Next 33 weeks: £187.18 per week or 90% of AWE (whichever is lower)
Average Weekly Earnings (AWE) is calculated as follows:
- Identify the relevant period: The relevant period is the 8-week period ending with the last normal payday before the end of the qualifying week. The qualifying week is the 15th week before the expected week of childbirth.
- Include all earnings: Include all gross earnings paid during the relevant period. This includes salary, bonuses, overtime, statutory payments (e.g. SSP), commission and tips (if processed through payroll). Do not include reimbursed expenses, non-cash benefits or dividends.
- Divide by the number of weeks
You can use HMRC’s SMP Calculator to help you.
SMP is subject to Income Tax and National Insurance deductions.
Maternity leave entitlement
Employees can take up to 52 weeks of maternity leave:
- Ordinary maternity leave: First 26 weeks
- Additional maternity leave: Last 26 weeks
Leave can begin 11 weeks before the expected week of childbirth. Employees must take at least 2 weeks off after birth (or 4 weeks for factory workers).
Reclaiming SMP
Employers can reclaim 92% of SMP paid. Or 108.5% if eligible for Small Employers’ Relief (paid less than £45,000 in Class 1 National Insurance in the previous tax year).
This is usually reclaimed though a reduction in the PAYE liability. If you cannot offset payments against current liabilities, you can write to HMRC and request repayment.
Statutory Paternity Pay (SPP)
Statutory Paternity Pay (SPP) and Leave allow eligible employees to take time off to support their partner following the birth, adoption, or surrogacy of a child. Employers are responsible for assessing eligibility, processing payments, and maintaining compliance with HMRC regulations.
Eligibility criteria
This is similar criteria to SMP. They should provide notice and a completed SC3 form at least 15 weeks before the baby is due.
SPP also applies in cases of:
- Adoption
- Surrogacy
- Stillbirth after 24 weeks or if the baby dies after birth
Leave entitlement
- Employees can take 1 or 2 weeks of paternity leave
- Leave must be taken in whole weeks, either consecutively or separately
- Leave cannot start before the birth and must end within 52 weeks of the birth
Payment amount
Eligible employees are entitled to:
- £187.18 per week, or
- 90% of their average weekly earnings (whichever is lower)
SPP is subject to Income Tax and National Insurance deductions.
Reclaiming SPP
This is done in the same way as for SMP, as described above.
If you would like to discuss this in more detail relating to your business, please feel free to book a free online meeting.
