Maternity rights: Pay

Pregnant employees who meet qualifying conditions based on their length of service and average earnings and give the correct notice are entitled to receive from their employers up to 39 weeks’ Statutory Maternity Pay (SMP).

Employers may offer more generous terms but must apply them equally to all staff to avoid potential discriminatory practices.

Statutory Maternity Pay

To claim SMP the employee must:

Have been employed by the same employer without a break for at least 26 weeks into the 15th week before the EWC. Part weeks count as full weeks
Earn on average, before tax £97.00 a week.

SMP is calculated by the employer over a set period. This is usually the 8 week period up to and including the 15th week before the EWC.

If the employer awards a pay rise, which is effective at any time from the start of the set period used to work out the SMP and the end of maternity leave, the employer must recalculate the SMP taking any increase into account.

SMP is paid by the employer and is subject to tax and National Insurance. Employers who are liable to pay SMP may be able to reclaim some or all of the amount they pay from HM Revenue and Customs. This will depend on the amount of Class 1 National Insurance Contributions paid a year.

The HM Revenue and Customs website (www.hmrc.gov.uk) provides a tool to help employers calculate SMP recovery.

Businesses may be eligible to claim back 104.5% of the money they pay out in SMP if their total National Insurance Liability in the previous tax year was £45,000 or less, or 92% where payments are more than £45,000.

From 4 April 2010 the rates for SMP are:

90% of average weekly earnings for the initial 6 weeks
£124.88 per week for the subsequent weeks, or
90% of average weekly earnings, if this is less than £124.88 per week
The standard rate of SMP is reviewed every April

Maternity Allowance

Women who do not qualify for Statutory Maternity Pay, may be eligible to claim Maternity Allowance (MA). MA is also available to women who are registered self-employed or have done some employed or self-employed work in the 15 months, before the week the baby is due.

To qualify, they must have been employed or self-employed for 26 weeks out of the 66 weeks before the EWC and have average weekly earnings of at least £30 over any 13 weeks within the test period. MA is paid by the Benefits Agency, for up to 39 weeks.