To get SMP an employee’s average weekly earnings in their ‘set period’ must reach at least the Lower Earnings Limit (LEL) which applies on the Saturday of their Qualifying Week (QW). The set period is their last eight weeks pay before the Saturday of their QW. The average weekly earnings are also used to calculate the rate of SMP payable. Details of how to work out AWE can be found in the Employer Helpbook E15.
Any expense payments or benefits in kind that are included in a PAYE (Pay As You Earn) Settlement Agreement but that would ordinarily have attracted Class 1 NICs liability. Any earnings included in a PAYE Settlement Agreement are liable for Class 1B NICs.
An employer can delay maternity leave if the notification is given outside the time limits and if the employer does not accept there was good cause for delay the Maternity leave must start no later than the day following the birth of the baby.
Average weekly earnings should include all earnings paid in the 'set (or relevant) period' that attract a Class 1 NIC liability, or would if they were high enough.
Including Statutory Adoption Pay (SAP), Statutory Paternity Pay (SPP), SMP and Statutory Sick Pay (SSP).
If your employee’s earnings are lower than the LEL, you may need to add in enough of any earnings subject to Class 1B NICs within the ‘set period’ to bring their earnings up to the LEL need to.
The amount of SMP paid for the first six weeks of the maternity pay period. It is 90 per cent of the average weekly earnings.
The amount the employee is due to receive before any deductions are made.
Where it is not reasonably practicable for your employee to give you statutory notice, they must do so as soon as it is. You will need to decide if it was reasonably practicable for the employee to have given the you notice on time. You should be flexible about notice because there is often a difference between the expected date of birth and the actual date of birth. If the baby is born early you must accept that notification was on time.
If your employee doesn’t notify you at least 28 days before they want to start to be paid SMP and you feel there was good cause for delay, you must accept that the notification is in time.
If you are not satisfied there was a good reason for the delay in notifying you the employee may be able to delay the start of their maternity leave and SMP but maternity leave must start no later than the day following the birth.
Legal custody means detained, arrested or in prison. It doesn’t include voluntarily helping the police with enquiries, serving a suspended sentence or being on bail. If the employee is taken into legal custody the employer should send them form SMP1.
For SMP your employee must be employed by you continuously for 26 weeks ending with the QW. Details can be found in the Employer Helpbook E15.
This is the minimum level of earnings that an employee needs to qualify for
For SMP it is the LEL which applies on the Saturday of the QW that must be used. Details of the LEL can be found in the Employer Helpbook E15
The form gives the date the baby is due. It is signed by a doctor or midwife and issued after the 20th week of pregnancy. The expectant mother must give you this form to confirm that she is pregnant. You must not pay SMP without it or similar evidence.
Statutory maternity leave can start on any day of the week as it depends on:
For and Expected Week of Confinement (EWC) on or after 1 April 2007, SMP can start on any day of the week to align with the start of the maternity leave.
For SMP purposes these are the Class 1 NICs paid by employers and their employees. Both the employer and the employee must be liable to pay Class 1 NICs or would be but for the level of earnings or employee’s age.
For SMP recovery or funding purposes, they are the employer’s total gross employer’s secondary plus all their employees’ primary Class 1 NICs liability in all the employers PAYE schemes.
Time limits for your employee to notify you of their intended dates for pay and leave.
The qualifying tax year for deciding the LEL appropriate to an employee’s average weekly earnings for SMP entitlement is the tax year that in which the on the Saturday of the employee’s QW falls.
The Qualifying Tax year for deciding whether or not an employer is a Small Employer for recovery or advance funding of SMP is the tax year immediately before the tax year in which the QW Saturday falls.
The 'set period' or 'relevant period' is needed to establish the earnings to be used and the number of days, weeks or months to divide those earnings by. All earnings paid in the 'set period' are divided by the number of days, weeks or months in that 'set period'.
Regulations define the 'set period' as the period between:
should include all the earnings paid on, or after Date 2, up to and including those paid on Date 1.
The 'set period' ends with the last normal payday on, or before the Saturday in the 15th week before the week baby is due and starts with the day after the last normal payday at least eight weeks before that.
Details the reasons why you cannot pay your employee SMP.
SMP record sheet which you can use to maintain a record of payments made.
An amount of compensation paid to a small employer for the NICs they pay on the SMP if their total Class 1 NICs liability in all their PAYE schemes is £45,000 or less in the 2006-07 or 2007-08 tax year. The compensation rate for both tax years is 4.5 per cent of the total SMP paid to the employee in each tax month.
The SER scheme enables small employers whose total gross Class 1 NICs under all their PAYE schemes, including primary (employee) and secondary (employer) liability, is at or below a set annual threshold (£45,000 or less in the 2006-07 or 2007-08 tax year) to recover 100 per cent of the SMP paid plus an additional compensation payment.
The standard rate to pay for SMP pay weeks starting on, or after Sunday 6 April 2008 is £117.18. The amount the employer actually pays to their employee is the lesser of the standard rate and the earnings related rate (90 per cent of the employee’s average weekly earnings), the remainder of the SMP pay period following the first six weeks is paid at the earnings related rate.
SMP is a legal entitlement to a certain amount of pay to help a mother take time off around the time of birth.
Tax months start on the sixth of each month and finish on the fifth of each following month. The first tax month each year is 6 April to 5 May and is known as the April tax month.
Includes England, Scotland, Wales and Northern Ireland and the various islands but does not include the Channel Islands or the Isle of Man.
For working out SMP entitlement and payment, a week is a period of seven days which can begin on any day of the week.