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What is statutory maternity pay?

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.

What is statutory maternity pay?

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.

QuestionDetail
1. Does the employee have a contract of employment?The employee must have done some work under that contract.
2. Does the employee earn at least £123 per week?If the employee is paid an irregular amount the average weekly earnings for the last eight weeks must be calculated.
3. Has the employee worked for you continuously for at least 26 weeks up to the qualifying week?The qualifying week is the 15th week before the expected week of childbirth.
4. Has the employee given you the correct notice?This is the 15th week before the expected week of childbirth. You, the employer must write to confirm the employee’s start and leave dats with 28 days. 
5. Has the employee given you proof of their pregnancy?Proof of pregnancy is either in the form of a doctor’s letter or maternity certificate (MATB1).

A form called SMP 1 must be completed if the employee is not eligible. The employee may receive the Maternity Allowance instead.

How much is statutory maternity pay?

SMP can be paid for a maximum of 39 weeks.

  • For the first six weeks the amount is 90% of the employee’s average weekly earnings.
  • For the remaining 33 weeks the amount is the lower of:
    • £184.03, or
    • 90% of the employee’s average weekly earnings.

This GOV.UK tool will help you to calculate statutory maternity pay.

When do I have to pay statutory maternity pay?

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.

How do I pay statutory maternity pay?

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:

  • proof of pregnancy
  • the date SMP started
  • the dates and amounts of the SMP paid
  • the SMP which has been reclaimed
  • any weeks that SMP was not paid and the reasons why.

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.

Can I reclaim statutory maternity pay?

As an employer you can claim back part of all of the SMP you have paid:

Large employers

92% of the SMP paid can be reclaimed.

Small employers

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).

Claiming back

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 for an application.
Large employers

92% of the SMP paid can be reclaimed.

Small employers

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).

Claiming back

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 for an application.

What do I do if the employee isn’t eligible for statutory maternity pay?

A form called SMP 1 must be completed if the employee is not eligible. The employee may receive the Maternity Allowance instead.