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All businesses that pay staff may need to pay statutory maternity pay if an employee wishes to take time off work to have a baby.
Statutory maternity pay (SMP) is an amount that is payable by employers to eligible employees. To see if an employee qualifies for SMP a YES answer is required for ALL of the following questions.
A form called SMP 1 must be completed if the employee is not eligible. The form can be found at https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/401639/smp1.pdf. The employee may receive the Maternity Allowance instead.
SMP can be paid for a maximum of 39 weeks.
The following tool may help you to calculate statutory maternity pay https://www.gov.uk/maternity-paternity-calculator
The earliest date SMP can usually be paid is 11 weeks before the expected week of childbirth.
An eligible employee can take up to 52 weeks maternity leave. However, they can only be paid a maximum of 39 weeks SMP. Therefore, an employee could be on maternity leave without receiving SMP.
SMP is payable to employees in the usual way that their salaries and wages are paid. Income tax and national insurance will be deducted under the normal rules.
What paperwork do I need to complete?
You must keep the following records for three years from the end of the tax year to which they relate:
The details can be recorded on a Statutory Maternity Pay record sheet (SMP2).
For those employees who are not eligible for SMP you must send the employee a form SMP1 within 28 days.
As an employer you can claim back part of all of the SMP you have paid:
92% of the SMP paid can be reclaimed.
100% of the SMP paid can be reclaimed. In addition a further 3% of the SMP paid can be reclaimed as National Insurance Compensation. To qualify as a small employer you must have paid £45,000 or less in Class 1 National Insurance Contributions (the total employees contributions deducted from their pay plus the total employers contributions). The £45,000 relates to the last complete tax year before the qualifying week (the 15th week before the expected week of childbirth).
Use your payroll software to calculate how much SMP can be reclaimed and reclaim the SMP by submitting an Employer Payment Summary (EPS). As an employer you are required to pay SMP to your employee and claim it back at a later date. If you can’t afford to make the payment for SMP you can apply for an advance payment. Visit the GOV.UK website here for an application.
A form called SMP 1 must be completed if the employee is not eligible. The employee may receive the Maternity Allowance instead. For a copy of the form select https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/401639/smp1.pdf.
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