SPM21035 - Statutory Maternity Pay (SMP) – Paying SMP

Offsetting SMP against other payments

An employer can treat an employee’s wages or any occupational maternity or sick payments as payments towards SMP, or the other way round if:

• they continue to pay her wages for a week in which SMP is due, even though the employee did not do any work for them, or
• they make a payment from their own occupational maternity or sick pay scheme for the same week as SMP.

If these payments are less than the SMP due the employer must make up the difference.

Jointly funded or employee funded scheme

Payments funded by employees cannot be offset against an employer’s liability to pay SMP.

If payment is paid from a jointly funded scheme, and it counts as earnings for NICs purposes, that part of the payment funded by the employer, can be offset against the employer’s SMP liability.