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How to Calculate Statutory Maternity Pay (SMP) and Leave

Welink Legal

Welink Legal

SMP & Leave

 

When you’re working and planning to have a family, it’s important to be informed about the process of calculating Statutory Maternity Pay (SMP) and Leave. This is the process that determines the appropriate payment and leave duration allowed for employees who are expecting a child.

 

There is a quick and easy way to get an approximation of SMP and Leave: the Government Calculator. However, this article provides a more comprehensive overview of the principles that are involved in calculating the Statutory Maternity Pay and Leave.

 

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Summary:

 

  1. What is Statutory Maternity Pay (SMP) and Leave?
  2. What is the difference between Statutory Maternity Pay and Maternity Allowance?
  3. Eligibility and Requirements for Statutory Maternity Pay and Statutory Maternity Leave
  4. Principles of Calculating Statutory Maternity Pay
  5. Employment Rights on Statutory Maternity Leave
  6. Returning to Work


1. What is Statutory Maternity Pay (SMP) and Leave?

 

Statutory Maternity Pay (SMP) is a benefit provided to an employee who is pregnant during the time of her employment, throughout her maternity leave. Statutory Maternity Leave is set at 52 weeks, but the employee is not bound to take 52 weeks off compulsorily. However, in all cases, the employee must take a mandatory 2 weeks of leave (or 4 weeks if she works in a factory) after the baby is born.

 

2. What is the difference between Statutory Maternity Pay and Maternity Allowance?

 

There is a difference between Statutory Maternity Pay and Maternity Allowance. Maternity Allowance is usually paid to an employee who does not qualify for SMP. In either case, the amount an employee receives depends on her eligibility for either of these compensations. 

 

3. Eligibility and Requirements for Statutory Maternity Pay and Statutory Maternity Leave

 

Requirements for Statutory Maternity Pay

 

Maternity Pay and Leave are similar concepts, but there is a slight distinction between them when it comes to the criteria of eligibility. To qualify for Statutory Maternity Pay, the following requirements must be fulfilled:

 

1. Earning requirement

 

The earning requirement for the reception of SMP is at least £120 a week. In the event the employee is earning less than the required income, she may still be able to acquire maternity leave. The minimum earning limit is not a requirement to qualify for leave but to qualify for payment.

 

2. Correct notice

 

The employee has to provide a 28 days notice to the employer to qualify for SMP, which the employer has 28 days to confirm. 

 

3. Proof of pregnancy

 

In addition to the respect of notice delays, the employee is also required to provide the employer with proof of pregnancy. If the employee is unable to provide proof of pregnancy, the employer may decide not to provide her with SMP. Proof of pregnancy must be provided within 21 days of the start of the SMP date. Proof of pregnancy either includes a letter from the doctor/midwife or a MATB1 certificate which is usually provided by the doctor/midwife no more than 20 weeks before the due date. In circumstances where the employee is expected to have an early birth, proof of pregnancy may be provided as early as possible.

 

In cases where the employer thinks that the employee is not eligible for SMP, the employer is entitled to give the employee an SMP1 form. This must be given within 7 days of the decision made by the employer and include the explanation for not providing the employee with SMP.

 

Requirements for Statutory Maternity Leave

 

There are two requirements to be eligible for Statutory Maternity Leave:

 

1. Must be an employee, not a worker

 

The person applying for the leave must be considered an employee, not a worker i.e. she must be working under an employment contract. A worker on the other hand does not have such a contract and is therefore only entitled to select employment rights.

 

2. Must hand in the correct notice to the employer

 

This refers to the notice given to the employer at least 15 weeks before the due date. Proof of pregnancy is not required to receive Statutory Maternity Leave. However, it is required for the employee to be able to qualify for Statutory Maternity Pay. Within 28 days of the notice, an employer must provide the employee with the leave dates.

 

The earliest an employee can begin leave is 11 weeks before the expected week of birth. In case the birth occurs earlier than expected, the leave may start immediately on the day after the baby is born. To determine the expected week of pregnancy, a particular method is adopted, one in which the week starts on a Sunday and ends on a Saturday. 

 

4. Principles of Calculating Statutory Maternity Pay

 

SMP starts once an employee takes maternity leave. As mentioned above, maternity leave can be taken for 52 weeks; however, SMP is only paid for 39 weeks. SMP for an employee’s 39 weeks is as follows:

 

  1. The first 6 weeks an employee will receive 90% of her average weekly earnings before tax.
  2. The next 33 weeks she will receive £151.97 or 90% of her average weekly earnings (whichever is lower).

 

The amount for SMP mentioned above represents the minimum. However, the employer may pay more than the minimum SMP depending upon the terms and conditions laid out in the employment contract. In addition to this, the employer may also provide the employee with some form of maternity benefits. SMP is paid in the same way as wages. This means that if wages are paid monthly, then SMP will also be paid monthly. 

 

5. Employment Rights on Statutory Maternity Leave

 

When on maternity leave, the employee’s employment rights are fully protected. These employment rights include pay raises, holiday accrual,  and the right to return to work. 

 

6. Returning to Work

 

The start and end dates for the maternity leave are determined once a notice is given to the employer. However, if an employee intends to return to work later or earlier than the end date, she must give the employer 8 weeks’ notice. Returning to work is a right under the Statutory Maternity Leave and it may be exercised by the employee without any prejudice. However, it is reasonable to provide the employer with any change of mind concerning the right of returning to work.

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