Legal Article - Employment Law


SMP is treated as earnings and so is subject to deductions for tax and National Insurance contributions. It is payable for a maximum period of 18 weeks (known as the Maternity Pay Period - MPP), but cannot start earlier than the 11th week before the EWC. Otherwise, a woman can decide when to start her leave any time after that until the date of confinement, except that if she is absent due to a pregnancy related illness after the sixth week before the EWC then the employer can count the leave as starting and pay SMP rather than SSP.

Once entitlement to SMP has been established in the qualifying week, the employer must pay SMP even if the employee leaves employment before she wants her SMP to start. If for any reason an employee is not entitled to SMP, her employer should complete and give her the Department of Social Security Form SMP1 (an explanation of why SMP is not payable). This will help the employee to claim any maternity allowance which is due to her.

SMP is a weekly benefit and the benefit week begins on a Sunday. The first six weeks of SMP are paid at 90% of the employee’s average weekly earnings and the remaining weeks are paid at the same or £124.88 per week, whichever is the lower.

Small employers, those whose total gross National Insurance liability in the previous tax year was £20,000 or less, can deduct 100% of the SMP they have paid out, plus 5% to cover other costs. All other employers can deduct from their next payment of PAYE and National Insurance contributions to the Inland Revenue an amount equal to 92% of the SMP they have paid out in the preceding period.

Published: 26 May 2011


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