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Statutory Maternity Pay (SMP)

If an employee is expecting a baby, she may be entitled to Statutory Maternity Pay (SMP).

At the employer’s discretion, SMP may:

  • replace the employee’s normal wages
  • be paid to the employee as part of their normal wage amount
  • be paid in addition to their normal wages

All female employees are entitled to take up to 52 weeks of maternity leave. SMP can be paid for up to 39 weeks.

In Sage One Payroll, SMP is paid by the week. In other payroll systems it may be paid by the day.


When does SMP begin?

Normally, the employee can choose (subject to providing 28 days’ notice) to start her period of SMP at any time between the following two dates:

  • the beginning of the 11th week before the baby is due
  • the day after the baby is actually born

If the baby is born before the earlier of the dates above, the SMP period begins the day after the baby is born.

If the baby is born before the date SMP was due to start, the SMP period begins the day after the baby is born.

If she leaves your employment between the earlier of the dates above, but before any date that would otherwise trigger the beginning of the SMP period (such as the SMP start date she has given the employer), she is still entitled to SMP, and must begin receiving it on the day after she leaves your employment. See ‘The employee is leaving this employment. Is she still entitled to SMP?’ below.

The start of the SMP period can also be affected by a pregnancy-related absence by the employee. See ‘Pregnancy-Related Absences from Work’ below.


Qualifying Criteria

The employee must satisfy the following criteria to qualify for SMP:

  • 26 weeks of continuous employment prior to ‘Qualifying Week’

    The employee must have been continuously employed by the same employer in the 26 weeks immediately prior to the ‘Qualifying Week’.

    The Qualifying Week is the 15th week before the baby is due to be born.
  • 11th week before due date

    At the start of the 11th week before the birth due date, the employee must either still be pregnant, or have already had the baby.

    If the baby is not already born by this week, the employee can start Maternity Leave on this week.

    (If the baby is born earlier than this, she can start her maternity leave when the baby is born.)
  • Average Weekly Earnings (AWE)

    The employee’s Average Weekly Earnings (AWE) amount must be equal to or exceed a level set by HMRC.

    See below for information about how to calculate AWE.
  • 28 Days’ notice of SMP

    Normally the employee is required to provide the employer with at least 28 days’ notice of her intention to avail of SMP.
  • Form MATB1

    The employee must complete Form MATB1 and present it to her employer as evidence of the need for Maternity Leave.

    You must retain this form for at least 3 years after the year to which it relates. This is to ensure that it’s available in the event of an HMRC audit.


If the employee does not qualify for SMP

In this case, the employer presents Form SMP1 to the employee. This form enables the employee to apply for Maternity Allowance at their local Jobcentre Plus office.


Pregnancy-Related Absences

Suppose that the employee needs to take time off work because of her pregnancy, and this absence coincides with some or all of the following span of time:

  • Start: The Sunday beginning the fourth week before her baby is due.
  • End: The baby’s due date.

This affects when the employee’s Maternity Leave begins, and when you have to begin paying SMP.

Her maternity leave is deemed to have begun the day after the first complete day of pregnancy-related absence within the span of time defined above.

And she begins to receive SMP on the same day.

For more information about this, contact your local HMRC office or the Employer Helpline on 08457 143 143.


SSP ‘Disqualifying Period’ for Pregnant Employees

An employee receiving SMP or Maternity Allowance (MA) is not entitled to receive SSP during the 39-week time during which SMP or MA is payable.

And even if the employee is not entitled to either SMP or MA, she is not entitled to SSP during the 18 weeks that begins on the earlier of the following:

  • The start of the week in which her baby is born.
  • The start of the week in which she is first off sick because of her pregnancy, if this is on or after the start of the fourth week before her baby is due.

If she is receiving SSP, her entitlement to SSP ends on the earlier of the following:

  • The date on which her baby is born.
  • The day she is first off sick because of her pregnancy, if this coincides with some or all of the following span of time:
  • Start: The Sunday beginning the fourth week before her baby is due.
  • End: The baby’s due date.

Example

Suppose that the employee returns to work in the 26th week of the SMP period.

However, in week 30 of the SMP period she has a sickness absence (a full working week lasting from Monday to Friday).

In this case Statutory Sick Pay is not payable, even though it is sick leave. Instead, SMP is payable.

The system will recognise this if you need to enter such a sickness absence. SMP pay will be applied to the employee even though you record sick pay.

The normal qualifying rules for SSP should be applied to the employee if the absence occurs after the 39-week period in which she is entitled to SMP or MA.

If the absence begins before or during the 39-week SMP period, she is not entitled to SSP until another unlinked absence occurs at least eight weeks after the end of that absence.

For example, if she phones in sick on the day she is due to start work after her SMP or MA has finished, she could be entitled to SSP if she meets the other qualifying conditions.

However, if she phones in sick during the last week of her SMP or MA and says that she will not be able to return to work because she is sick, she is disqualified from SSP throughout that particular absence.


Is a leaver still entitled to SMP?

If the employee leaves this employment, she is nevertheless entitled to SMP from this employer if she satisfies the qualifying criteria above.

The reason for her leaving does not affect this entitlement.

Neither does the fact that she will not return to this employment.

Even if she starts with a different employer before her baby is born, this employer is still liable to pay her SMP.


When does SMP start for a leaver?

If she leaves this employment before the Sunday of the 11th week before the baby is due, her SMP normally begins on that Sunday.

However, if the baby is born before that date, her SMP begins on the day after the baby is born.

The SMP begins on the day after her leaving date if the leaving date falls between:

  • the Sunday of the 11th week before the baby is due
  • any date that would trigger the beginning of the SMP period if she remained in this employment, such as the SMP start date she has given the employer


SMP Rates

For the first six weeks of maternity leave, SMP is 90% of the employee’s Average Weekly Earnings (AWE).

After the first six weeks, the SMP amount is either the weekly standard rate set by HMRC, or 90% of the employee’s AWE, whichever is less.

The AWE amount is normally calculated as follows:

@ AWE = (Total earnings in the ‘Relevant Period’) / (Number of weeks in the ‘Relevant Period’) @

The ‘Relevant Period’ is the span of time between the following two dates:

  • Start Date: The day after the last normal payday that falls eight weeks or more before the End Date.
  • End Date: The last normal payday on or before the Saturday of the Qualifying Week (QW). The QW is the 15th week before the week that the baby is due.


Recovering SMP payments from HMRC


An employer is entitled to recover certain amounts of SMP by deducting them from PAYE, NIC and Student Loan liabilities to HMRC.

The amount recoverable depends on the previous year’s Class 1 NIC contributions:

  • Employer’s annual Class 1 NIC total contribution for the previous tax year is below the threshold set by HMRC:

The employer is entitled to recover 100% of SMP payments plus an amount of compensation for any NICs the employer pays on SMP payments.

  • Employer’s annual Class 1 NIC total contribution for the previous tax year exceeds the threshold set by HMRC:

The employer is entitled to recover 92% of any SMP payments.


Further Information

For moreinformation about Statutory Maternity Pay, click here