Becoming a parent is a life-changing experience, and understanding your rights and entitlements to statutory maternity pay (SMP) is crucial for planning your maternity leave and finances.
SMP is a financial benefit provided by the government to eligible employees during their maternity leave period. In this guide, we’ll walk you through everything you need to know about SMP so you can plan properly.
Eligibility criteria
To qualify for SMP, you must meet certain eligibility criteria:
- Employment status: You must be an employee, not a worker or self-employed.
- Continuous employment: You should have been working continuously for the same employer for at least 26 weeks by the end of the 15th week before your expected week of childbirth. This is referred to as the ‘qualifying week’.
- Average earnings: You must have earned an average of at least £120 per week in the eight weeks leading up to the end of the qualifying week.
- Notice: You need to provide your employer with the correct notice and proof of pregnancy.
- Maternity leave: You must take at least two weeks off work after childbirth (or four weeks if you work in a factory).
How much SMP will you receive?
The amount of SMP you receive depends on your average weekly earnings before tax. You will get:
- 90% of your average weekly earnings (before tax) for the first 6 weeks.
- £172.48 or 90% of your average weekly earnings (whichever is lower) for the next 33 weeks.
Eligible employees can take up to 52 weeks of maternity leave. The first 26 weeks are known as ‘ordinary maternity leave’, the last 26 weeks as ‘additional maternity leave’.
The earliest that you can take your leave is 11 weeks before the expected week of childbirth, unless your baby is born early. You then have to take at least 2 weeks off after the birth (or 4 if you’re a factory worker).
The notification and claim process
To claim SMP, you need to inform your employer at least 28 days before the expected week of your child’s birth. You’ll also need to provide proof of your pregnancy, such as a maternity certificate (MATB1) from your midwife or GP. Your employer will then confirm your eligibility and begin SMP from the appropriate date.
Returning to work
After your maternity leave, you have the right to return to the same job on the same terms and conditions as before. If the job is no longer available, your employer has to offer you a suitable alternative on terms and conditions that are no less favourable.
We’re here to help
Navigating the complexities of SMP can be challenging, especially when you have to juggle the excitement of nearing parenthood. While we’ve hopefully given you a helpful overview, seeking personalised advice from a qualified accountant can offer invaluable support.
An experienced accountant such as FMA Accountants can provide tailored guidance on maximising your entitlements, ensuring compliance with regulations, and optimising your finances during maternity leave. They can also help you understand the intricacies of SMP calculations, explore potential tax implications, and devise strategies for managing your budget effectively.
Talk to us about financial planning.
