If your employee is expecting a baby, she may be entitled to Statutory Maternity Pay (SMP). This replaces her normal earnings to help her take time off around the time of the birth. She also has a statutory right to a minimum amount of maternity leave.
Whether you have to pay SMP to an expectant employee depends on how long they have worked for you and how much they earn. They’ll have to provide you with evidence of when the baby’s due and give you notice of when they want you to start paying their SMP.
Payments of SMP count as earnings. You must deduct tax and National Insurance contributions from them in the usual way.
You’ll normally be able to recover some or all of the SMP you pay.
Table of Contents
SMP eligibility and rates – overview
You must pay Statutory Maternity Pay (SMP) to your employee if they meet certain conditions. They must have:
- worked for you continuously – full or part-time – for at least 26 weeks up to and into the 15th week before the week the baby’s due
- average weekly earnings at least equal to the Lower Earnings Limit (LEL) for National Insurance contributions (NICs) – £107 a week for 2012-13 or £102 a week for 2011-12
- given you the right paperwork confirming the pregnancy and sufficient notice of when they would like the SMP payments to start
An employee doesn’t necessarily have to be eligible for maternity leave in order to qualify for SMP. This is the case for some agency workers, for example. This is because the meaning of ’employee’ for SMP purposes covers anyone for whom you pay secondary Class 1 NICs (or would pay them if the earnings were high enough).
If an employee has more than one employer they can get SMP from each of them, provided they satisfy all the eligibility criteria in each case.
SMP duration and rates
An eligible employee is entitled to receive SMP for 39 weeks. Usually you pay it during the first 39 weeks of maternity leave.
For the first six weeks you must pay your employee SMP at the rate of 90 per cent of their average weekly earnings.
For the next 33 weeks you must pay them the lower of the following:
- £135.45 – from 1 April 2012
- 90 per cent of their average weekly earnings
A flowchart illustrating when you must pay SMP can be found on page three of HM Revenue & Customs’ (HMRC’s) publication E15 ‘Employer Helpbook for Statutory Maternity Pay’.
Get help with statutory payments funding
If an employee doesn’t qualify for SMP
If you decide your employee doesn’t qualify for Statutory Maternity Pay (SMP) you must give them details of this decision and the reasons for it within seven days of the date of your decision or at least 28 days from the date your employee gave you notice of her intended maternity leave start date. You can do this by using form SMP1. They might be able to claim Maternity Allowance instead. They can find out more about claiming Maternity Allowance from Jobcentre Plus.
Find out how to contact Jobcentre Plus on the Directgov website – Opens in a new window
Paying and recovering SMP
Our guide how to calculate and recover Statutory Maternity Pay explains in detail how to calculate, pay and recover statutory maternity pay.
If you use payroll software, it will help you decide if Statutory Maternity Pay (SMP) is due and do most of the calculations to work out how much you must pay. You can also use HM Revenue & Customs (HMRC) online calculator available on our website. This will:
- tell you if your employee is entitled to be paid SMP
- work out how much SMP is due
- work out how much SMP you can recover – including compensation, if you’re entitled to it
You can recover SMP by deducting it from your monthly PAYE payments. Or you may be able to ask HMRC for funding in advance – read our guide get help with statutory payments funding.
If your total National Insurance payments are no more than £45,000 in the relevant tax year, you can recover 100 per cent of the SMP you have to pay plus an additional amount as compensation for the employer’s Class 1 National Insurance Contributions you have to pay on the SMP.
The compensation rate is:
- 3 per cent for tax years 2010-11 onwards
- 4.5 per cent for tax years 2009-10 and earlier
If your total National Insurance payments are more than £45,000 a year you can recover 92 per cent of the SMP you have to pay.
Get help with statutory payments funding
Where to get HMRC’s free SMP calculator
A set of Basic PAYE Tools are now available to download straight to your computer. In addition to calculators for SMP and other statutory payments, the tools include:
- an employer database on which you can record your employees’ details
- a P11 calculator that will work out and record your employees’ tax, NIC and Student Loan deductions every pay day with a linked P32 Employment Payment record that works out what you need to pay HMRC
- interactive forms such as P11D working sheets
- a Learning Zone – including interactive learning material on SMP
How to calculate and recover Statutory Maternity Pay
If your employee stops working for you
You are still required to pay Statutory Maternity Pay (SMP) to your employee as usual if either of the following occurs:
- she stops working for you before you have started paying SMP but after the start of the 15th week before the baby’s due date
- she stops working for you after you have started paying SMP to her
This applies regardless of whether the employee decides voluntarily to stop working for you or whether you have dismissed her.
SMP and ‘keeping in touch’ days
Your employee can work for you for up to ten days during her Statutory Maternity Pay (SMP) period without losing any of her SMP entitlement. These are known as ‘keeping in touch’ or KIT days.
However, if the employee does any work for you during her SMP period once she has used up these ten days, then you must not pay her SMP for the week(s) in which this work is done.
See the page contact and work during maternity leave in our guide on maternity leave and pay.
When to stop paying SMP
Normally, you stop paying Statutory Maternity Pay (SMP) after 39 weeks. You must stop earlier than this if any of the following applies to your employee:
- she returns to work for you within her 39-week maternity pay period (unless these are ‘keeping in touch’ days – see the page in this guide on SMP and ‘keeping in touch’ days) – however, if she stops work again while still in her SMP period, she must give eight weeks notice of when she intends to return to work
- after the baby’s birth she works for another employer, who didn’t employ her during the 15th week before the baby’s due date (this applies whether or not the employee has left your employment)
- she’s arrested or put in prison
- she dies
SMP forms and records
You’ll need a number of forms when dealing with Statutory Maternity Pay (SMP).
Form MAT B1 Maternity Certificate
Your employee gives you this form to confirm that they’re expecting a baby. It’s signed by a doctor or midwife who will give it to your employee after the 20th week of pregnancy. You mustn’t pay SMP unless you get this form or similar evidence of pregnancy from your employee.
Form SMP1
If you decide that your employee isn’t entitled to be paid SMP, you must tell them about your decision and the reasons for it. This must be either:
- within seven days from the date of your decision
- at least within 28 days from the date your employee gives you notice of her intended start date or the date she gave birth if this occurred earlier
You should do this using form SMP1.
Find form SMP1 on the HM Revenue & Customs (HMRC) website – Opens in a new window
Form SMP2 Statutory Maternity Pay record sheet
You’ll need to keep a record of SMP payments – this form is designed to help you do this.
You can use your own version of any of the above forms – except form MAT B1.
You can download forms SMP1 and SMP2. Alternatively, you can order paper copies of SMP2 from HMRC’s Employer Orderline.
Find contact details for HMRC’s Employer Orderline – Opens in a new window
Record keeping
The records you’ll need to keep include:
- evidence of pregnancy – form MAT B1, or a copy if you handed it back with form SMP1
- the payment dates and amount paid – you can use form SMP2
- the date the pay period began
- any weeks in the 39 week period when SMP wasn’t paid and the reason why
As well as recording payments on SMP2, you must also use the following forms to keep records of the payments of SMP you make and the amounts you recover:
- form P11 or an equivalent employee payroll record (either electronic or paper) – if you’re using a paper form P11 complete column 1h and include the SMP in gross pay in column 2 for each week or month that you pay SMP
- form P14 End of Year Summary – you only have to show the SMP paid to each employee in months when you recovered some or all of it
- form P35 Employer Annual Return – you only have to show the total amount of SMP recovered in the year and any amount of National Insurance contributions compensation you received
Remember that almost all employers are required to file their Employer Annual Return (forms P35 and P14) online to HMRC. For more information, including details of the exemptions that apply, see our guide file your Employer Annual Return: P35 and P14s.
If you use the Simplified Deduction Scheme for domestic employees there are different forms to use:
- P12 Simplified Deduction Card – if you’re recovering some or all of the SMP, record all the payments of SMP you make to your employee each week or month
- P37 Employer Annual Return
You must keep all these records for at least three years after the end of the tax year to which they relate.
You can find out more about the forms you’ll need for dealing with SMP and about using your own forms in HMRC’s publication E15, ‘Employer Helpbook for Statutory Maternity Pay’. You’ll also find information on record keeping in Employer Helpbook E15.
Payroll calculations and records: an introduction
File your Employer Annual Return: P35 and P14s
Simplified PAYE for domestic employees
If an employee disagrees with your SMP decision
You may decide that your employee isn’t entitled to Statutory Maternity Pay (SMP). You must explain the reason for your decision to your employee:
- within seven days from the date of your decision
- at the latest within 28 days from the date your employee gives you notice of her intended start date of maternity leave or the date she gave birth if this occurred earlier
You can do this using form SMP1. Make a copy of the evidence of pregnancy – form MAT B1 – and give the original back to your employee.
If your employee doesn’t agree with you, they have got the right to ask you for a written statement showing:
- the days – if any – for which you think you should pay SMP
- how much SMP you think your employee is entitled to
- why you don’t think you should pay SMP for other days in the pay period
Your employee can ask for a written statement at any time. If the request is reasonable you must give them the statement within a reasonable time – for example, within seven days of being asked for it.
If you and your employee can’t agree how much SMP you should pay you can ask HM Revenue & Customs (HMRC) for guidance – see the page in this guide on SMP help and advice for the phone number to call. Your employee can also ask HMRC for a decision if you can’t agree.
As an employer you cannot ask HMRC to make a formal decision on your behalf. However, you may ask for an informal opinion with regard to your employee’s entitlement to SMP.
Find form SMP1 on the HMRC website – Opens in a new window
SMP help and advice
You can find information about Statutory Maternity Pay (SMP) in HM Revenue & Customs’ (HMRC’s) publication E15, ‘Employer Helpbook for Statutory Maternity Pay’.
If you still can’t find what you need, you can ask a question through HMRC’s email query service.
Use HMRC’s email query service to send a question about SMP
Alternatively, you can get advice by calling HMRC’s Employer Helpline.
Find contact details for HMRC’s Employer Helpline – Opens in a new window
SMP – more useful links
To find out how to calculate and recover Statutory Maternity Pay (SMP) read our related guide below or you can download the Helpbook E15 for more detail on all aspects of SMP.
Calculating and recovering Statutory Maternity Pay
You can get information about maternity rights for employers and employees from the Department for Business, Innovation & Skills (BIS) website.
Follow the link below to find out about the impact salary sacrifice arrangements can have on SMP and about the non-cash benefits employers should provide to their employees during statutory maternity leave.
Salary sacrifice: an overview for employers
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Every effort has been made by the author(s) to ensure this article’s accuracy but it does not constitute legal advice tailored to your circumstances. If you act on it, you acknowledge that you do so at your own risk. We cannot assume responsibility and do not accept liability for any damage or loss which may arise as a result of your reliance upon it.
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