Statutory Maternity Pay Explained: What Employers Need to Know
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When an employee tells you they're expecting a baby, one of your first jobs as an employer is to work out their entitlement to Statutory Maternity Pay. If you've got more than a handful of staff, this is the kind of thing that arrives in the inbox and sits there — because SMP rules are technical, the sums are real money, and getting it wrong costs you both credibility and potentially HMRC recovery.
This guide cuts through the jargon. We'll cover who qualifies, how to calculate it, when to pay it, and how to get most of it back from the government.
What is Statutory Maternity Pay?
Statutory Maternity Pay (SMP) is a weekly payment you, as the employer, make to an employee on maternity leave. The government sets the rules. You make the payments. You recover most of the cost later — which is the good bit.
SMP runs for up to 39 weeks. The first six weeks are paid at 90% of average weekly earnings (no ceiling). The remaining 33 weeks are paid at a flat government rate, or 90% of average earnings — whichever is lower.
Payment goes through your normal payroll, with tax and employee National Insurance deducted. It appears on the payslip just like regular salary.
Who qualifies for SMP?
An employee qualifies for SMP if they tick all of these boxes:
- 26 weeks of continuous employment by the 15th week before their due date (the "qualifying week")
- Earnings above the Lower Earnings Limit on average over the eight-week period ending with the qualifying week ([STAT NEEDED: current LEL threshold])
- 15 weeks' written notice before their expected week of childbirth
- A MATB1 certificate from their midwife or GP (issued from 20 weeks of pregnancy onwards)
- Maternity leave has actually started — SMP cannot be paid in advance
If an employee doesn't meet these conditions — perhaps they were hired 18 weeks ago, or their earnings are too low — you must issue form SMP1 within seven days. This tells them how to claim Maternity Allowance directly from the government instead.
The qualifying week matters because it's the pivot point for both eligibility and pay calculations. Miss it by a week and the maths change. Most modern payroll software will flag these dates automatically if you enter the expected due date.
Calculating SMP: the two phases
Weeks 1–6: 90% of average earnings (no cap)
Take the gross pay earned during the "relevant period" (more on this below), divide by the number of weeks in that period, then multiply by 0.9. There's no upper limit — if the employee earns £2,000/week, then 90% of that is what they get.
Weeks 7–39: flat rate or 90% (whichever is lower)
The government sets a flat SMP rate each April ([STAT NEEDED: current flat rate]). For weeks 7 onwards, pay the flat rate — unless 90% of their average weekly earnings is lower, in which case pay that instead.
Working out average weekly earnings
Take total gross pay in the relevant period and divide by the number of weeks (or months). Include regular salary, bonuses, overtime, and any statutory payments made during that period.
For monthly-paid staff: the relevant period is two months. Divide total earnings by two, multiply by 12, divide by 52 to get the weekly figure.
The relevant period ends on the last normal pay day on or before the last day of the qualifying week. Get this date wrong and your entire calculation goes sideways.
When SMP starts and stops
SMP can start from the 11th week before the due date — the employee picks when within that window. Many employees delay until the due date itself or a few weeks before.
SMP starts automatically if the employee is off work for a pregnancy-related illness in the four weeks before the due date (on the day after the first complete day of absence).
If the baby arrives early, SMP starts the day after birth.
SMP stops on the day the employee returns to work — even if they return during the SMP period.
Paying SMP through payroll
On each pay date during maternity leave:
- Calculate the SMP due for that period
- Deduct income tax and employee National Insurance as normal
- Include it on the payslip
- Report it through your RTI submission
If you offer occupational maternity pay (OMP) that tops up SMP, the SMP sits inside the total — it doesn't add to it. A typical arrangement is "full pay for 12 weeks (with SMP offset), then SMP only for the remaining weeks, then unpaid leave."
Document your maternity pay policy clearly and share it before the leave starts. Ambiguity here creates headaches later.
Recovering the cost from HMRC
Here's the relief: you get most of the money back.
Small employers (those with total employer and employee National Insurance contributions below a set threshold in the previous tax year) can claim 100% of SMP plus a 3% compensation payment ([STAT NEEDED: current compensation rate]).
All other employers can claim 92% of SMP.
To claim, you offset the SMP amount against your PAYE and National Insurance liabilities on your Employer Payment Summary (EPS), submitted as part of your RTI returns. If SMP exceeds your PAYE liability for the period, HMRC pays you the difference.
Notice, proof, and legal obligations
The employee must give you 15 weeks' notice, confirming that they're pregnant, the expected week of childbirth, and when they want their leave to start. Respond within 28 days with the date their leave will end (52 weeks from the start date).
Legally, you cannot dismiss or treat an employee unfavourably because of pregnancy or maternity leave — it's automatically unfair dismissal and sex discrimination. Full stop. Don't go there.
Employees are entitled to Statutory Paternity Pay and Shared Parental Leave if their partner takes time off instead. It's worth knowing these run on similar principles.
Keeping in touch days and return to work
An employee can work up to 10 "keeping in touch" (KIT) days during maternity leave without losing SMP for that week. Both parties must agree. Payment is by agreement — there's no statutory KIT day rate (many employers pay the normal daily rate minus the SMP they'd receive for that day).
KIT days are optional and useful for easing the return, but anything beyond 10 days causes loss of SMP for the weeks in which the extra days fall.
Employees have the right to return to their same role (or a similar one after Additional Maternity Leave if the original job isn't available). You can't squeeze them out on the grounds that they've been away.
Record-keeping requirements
Keep records for at least three years after the end of the tax year in which SMP was paid. Include:
- Expected week of childbirth and MATB1 certificate
- Start and end dates of SMP payments
- Amount paid each period
- Average weekly earnings calculation and working
- Any weeks SMP wasn't paid (and why)
- HMRC recovery calculations
Good records protect you if HMRC audits and protect the employee if there's ever a dispute about what was paid.
Connecting SMP to your wider leave policy
SMP is one piece of a broader statutory leave picture. If you're managing multiple employees and multiple leave types — sick pay, paternity leave, redundancy, et cetera — you'll find the rules follow similar patterns around eligibility windows, notice periods, and calculation bases. Our guide to UK statutory leave entitlements covers the full landscape.
For comparison, Statutory Sick Pay uses a different calculation (no earnings phase, just a flat rate), and paternity and shared parental leave have their own rules — but they all run through payroll the same way.
Frequently Asked Questions
What happens if an employee has a miscarriage before SMP starts? If the pregnancy ends before the 24th week, there is no SMP entitlement. If it ends at 24+ weeks, SMP entitlement begins and the employee receives the full 39 weeks. Treat this with sensitivity — this is not a policy to lose goodwill over.
Can I claw back SMP if the employee doesn't return after leave? No. SMP is paid for the right to take maternity leave. If the employee resigns, leaves to another employer, or takes a different path, you cannot reverse payments already made. However, if they return early (before the 39 weeks end), SMP stops on the return date.
Do I have to pay more than the statutory rate? No — it's the legal minimum. Many employers offer enhanced maternity pay (full salary for X weeks, for instance) as a recruitment and retention tool. If you do, SMP still sits within that amount — it doesn't add to it.
What if an employee is on a zero-hours contract? The eligibility rules still apply: 26 weeks of service, earnings above the LEL, notice. A zero-hours employee who meets these can claim SMP — the calculation uses their average earnings over the relevant period, even if hours vary.
How do I handle SMP if the employee is on secondment or loan to another employer? If you remain the statutory employer, you remain liable for SMP. If the secondment is genuine (employee transferred to the other employer), the secondary employer becomes liable. Clarify this upfront — it's easy to get wrong and creates disputes.
Does SMP cover the full 52 weeks of maternity leave? No. SMP covers 39 weeks. The remaining 13 weeks of Additional Maternity Leave are unpaid. Employees can take up to 52 weeks total (26 weeks Ordinary Maternity Leave + 26 weeks Additional Maternity Leave).
What if I'm not sure whether an employee qualifies? Get advice from ACAS (free and impartial) or your payroll provider. It's better to check early than to issue the wrong forms or calculate the wrong amount. ACAS publishes detailed guidance and can walk through eligibility with you.
Do I recover SMP even if I'm a small employer but had a bad year? Yes. The Small Employers' Relief threshold is set by National Insurance contributions, not profit. If you were below the threshold in the previous tax year, you recover 100% + 3%. The calculation is based on your actual contributions, not your income.
Setting up SMP in your payroll system
If you're using a manual payroll, the dates, averages, and phases are where mistakes happen. Relentify's payroll software calculates SMP automatically — you enter the expected due date and MATB1 receipt, and it flags the qualifying week, calculates the relevant period, tracks the six-week and 33-week phases, and manages HMRC recovery through your RTI submissions.
When SMP is automated, you reduce admin by roughly 70% on maternity cases. You also stop the Friday-afternoon panic when you realise you got the relevant period wrong.
Keep detailed records even when software does the maths — the software is only as good as the dates you feed it, and HMRC audits will ask for evidence of your working.
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