In this section:
- Statutory Sick Pay: an overview
- Calculating and recovering Statutory Sick Pay
- Statutory Maternity Pay: an overview
- Calculating and recovering Statutory Maternity Pay
- Statutory Paternity Pay: an overview
- Calculating and recovering Statutory Paternity Pay
- Statutory Adoption Pay: an overview
- Calculating and recovering Statutory Adoption Pay
Calculating and recovering Statutory Maternity Pay
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.
You may be able to recover some or all of the SMP you pay. How much you can recover depends on the amount of Class 1 National Insurance contributions (NICs) you pay a year.
Payroll software will usually work out your SMP payments and how much you can recover. Or you can use the SMP calculator on HMRC’s Employer CD-ROM and website.
You can also work out SMP manually using the SMP tables. But using
payroll software or HMRC’s calculator saves time and helps avoid mistakes.
On this page:
- Information you’ll need to work out SMP
- Calculating SMP and SMP recovery using an HMRC calculator
- Calculating SMP manually
- Calculating SMP recovery manually
- Advance funding for SMP
- SMP and salary sacrifice schemes
- Help and advice
Information you'll need to work out SMP
Whichever method you use to work out SMP and recovery of SMP you'll need to gather together the same information.
Information needed to calculate SMP
Before you can start to calculate your employee’s SMP you’ll need:
- the date the baby’s due - from your employee's MATB1 form
- your employee's intended date for starting her maternity leave, if she’s given you one
- your employee's gross pay and the dates she was paid in the ‘set period’ (for a definition please read E15, ‘Employer Helpbook for Statutory Maternity Pay’)
- the date your employee started working for you
- confirmation that your employee's gross earnings are liable to employer’s Class 1 NICs
Check a definition of ‘set period’ in E15, ‘Employer Helpbook for Statutory Maternity Pay’
Information needed to work out what you can recover
To work out how much of the SMP payments you can recover you’ll need to know:
- the amount of SMP you’re liable to pay - this is worked out automatically if you use HMRC's SMP calculator or commercial software that has its own SMP calculator
- how much your Class 1 NICs (employer’s and employees’) were for the ‘relevant tax year’ - you can get this figure from your Employer Annual Return form P35
The later section ‘Calculating SMP recovery manually’ explains how to decide which is the ‘relevant tax year’ for working out the total NICs you pay in a year.
Calculating and recovering SMP using an HMRC calculator
HMRC's SMP calculator works out how much SMP you’ll have to pay and how much you can recover. It’s easy to use and does everything for you. You’ll find it:
- on the Employer CD-ROM
- on HMRC's website
Both the CD-ROM and the online version of the calculator work in the same way.
They’ll work out for you:
- whether your employee is entitled to be paid SMP
- the amount of SMP you should pay
- how much you can recover
You can print the figures worked out by the SMP calculator so they're ready to enter in:
- the P11 Calculator on the CD-ROM
- your commercial software (but this may have its own SMP calculator)
- a paper form P11
HMRC sends you the Employer CD-ROM when you register as an employer and issues updates, usually twice a year. You can use HMRC's online ordering service to order further copies - simply enter how many you need, complete your contact details and click on ‘Order’.
Always check that you’re using the latest version of the CD-ROM, with up-to-date tables.
Find out how to record payments and deductions on form P11
Calculating SMP manually
To calculate your SMP payments manually you work out:
- whether your employee has worked for you long enough
- whether they earn enough
- how much to pay them
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:
- £123.06 - from 6 April 2009
- 90 per cent of their average weekly earnings
You’ll find guidance on how to work out average weekly earnings in E15, ‘Employer Helpbook for Statutory Maternity Pay’. Read the section ‘Quick method for calculating Average Weekly Earnings (AWE)’. This tells you how to work out weekly earnings for both monthly and weekly paid employees.
Go to E15, ‘Employer Helpbook for Statutory Maternity Pay'
Calculating SMP recovery manually
How much SMP you can recover depends on the total amount of employer’s and employees’ Class 1 NICs you pay in the ‘relevant tax year’.
The ‘relevant tax year’ is the tax year immediately before the tax year in which the qualifying week falls - this being the 15th week before the baby is due.
| Due date of baby | Qualifying week (15 weeks before the baby’s due date) |
Relevant tax year (precedes the tax year of the qualifying week) |
|---|---|---|
| 4 July 2009 | 17 March 2009 | 2007-08 |
| 1 January 2010 | 15 September 2009 | 2008-09 |
You’ll find the total of your employer’s and employees’ NICs for the tax year on your copy of form P35 Employer Annual Return.
If your annual liability for Class 1 NICs is £45,000 or less
If your Class 1 NICs are no more than £45,000 in the relevant tax year, you can recover 104.5 per cent of your SMP payments. For 2009-10 this is made up of:
- 100 per cent of the SMP
- 4.5 per cent of the SMP - this is an additional amount as compensation for the employer’s Class 1 NICs you’ll have paid on the SMP
You can recover 104.5 per cent of the total of all payments of SMP made in the same tax month.
If your annual liability for Class 1 NICs is more than £45,000
If your Class 1 NICs are more than £45,000 in the relevant tax year, you can recover 92 per cent of the total of all payments of SMP made in the same tax month.
You might have paid no Class 1 NICs in the relevant tax year - or only paid them for part of it. In this case, you’ll need to check to see if you were paying them at the rate of more than £45,000 a year. You do this by working out your average monthly payment and multiplying that by 12.
You’ll find a full explanation of how to work out how much SMP you can recover in E15, ‘Employer Helpbook for Statutory Maternity Pay’ - read the section ‘Recovering SMP’. This explains what period to use to work out your average monthly payment if you paid no NICs for the relevant year, or if you only paid them for part of it.
Read E15, ‘Employer Helpbook for Statutory Maternity Pay’
Advance funding for SMP
If you don't have sufficient payroll deductions available to cover the SMP you’re entitled to recover, you may be able to apply for funding from HMRC. Follow the link below for more information.
Get help with statutory payments funding
SMP and salary sacrifice schemes
If you provide benefits to your employees under a salary sacrifice scheme, this can have an impact on SMP. Follow the link below for guidance on this issue. The guidance also provides details of the non-cash benefits employers are required to provide to employees on statutory maternity leave.
Find out about the impact of salary sacrifice arrangements on SMP (PDF 134K)
Help and advice
Follow the links below to find out more about SMP.
Statutory Maternity Pay - an overview
Read E15, ‘Employer Helpbook for Statutory Maternity Pay’
Quick answers to common questions on SMP
If you still can’t find what you need, you can ask a question through HMRC’s email query service.
Alternatively you get advice from HMRC’s Employer Helpline on Tel 08457 143 143 (open from 8.00 am to 8.00 pm from Monday to Friday and from 8.00 am to 5.00 pm on Saturday and Sunday)
