A guide to Statutory Maternity, Paternity and Adoption Pay

infants feet being held by a womans hand resting on a gray blanket

For Employees and Employers

Becoming a parent can be stressful for many reasons, so understanding your finances during this special time is really important.

If you are planning to leave work to look after a baby, we hope you will find our explanations of the leave and allowances you are entitled to useful so that you can plan for the arrival of your bundle of joy!

Some employers will offer more generous benefits than the statutory leave and pay, so check your contract for this but we will be looking at the statutory amount everyone is entitled to.

Understanding Statutory Maternity Pay (SMP):

You may be entitled to receive SMP if you are due to have a baby. SMP usually starts when you decide to take your maternity leave, which can be any day up to 11 weeks before the due date. However, it can start automatically if the baby comes early or if you are off work for a pregnancy-related illness in the 4 weeks before the week that your baby is due. SMP is paid for for up to 39 weeks.

How much could I receive?

You are eligible to receive 90% of your average weekly earnings (before tax) for the first 6 weeks of your leave and then the lower of £172.48 (2023/24 tax year) or 90% of your average weekly earnings for the next 33 weeks.  PAYE and National Insurance will be deducted from this amount as normal if you earn enough to pay these taxes.

Mothers are also entitled to an extra 13 weeks unpaid leave, giving a total of 52 weeks leave.

You are entitled to take reasonable paid time off for antenatal appointments which have been recommended by a doctor, nurse or midwife.

You get the same amount of leave and pay if you have a multiple birth (such as twins).

How do I know if I’m eligible?

To be eligible to receive SMP, employers will need you to be on the payroll in the ‘qualifying week’, which is the 15th week before the expected week of childbirth. You will also need to have been continuously employed by that employer for at least 26 weeks up to any day in the qualifying week.

You must give the correct notice to your employer and also give proof you are pregnant, which is the MATB1 form you will get at a midwife appointment.

When can I return to work?

As a mother, you cannot return to work before the end of the compulsory 2 weeks of maternity leave following the birth (this is increased to 4 weeks if you work in a factory).

The maximum amount of leave you can take is 52 weeks, however, you do have the option to work for up to 10 ‘keep in touch days’ and these days would be paid at your normal salary rate. KIT days are optional, but they can ease you back into your return to work and provide a little extra income. They can also help you adjust to any changes or new faces in the workplace!

What is Statutory Paternity Pay (SPP)?

In contrast to Statutory Maternity Leave, fathers can only take one or two weeks leave. Statutory Paternity Pay is paid at the same rate as the second part of maternity leave, which is the lower of £172.48  per week (2023/24 tax year) or 90% of your average weekly earnings.

Paternity leave must be taken in one go, and a week is the same number of days that you normally work in a week – for example, a week is 2 days if you only work on Mondays and Tuesdays.

You are entitled to take unpaid leave to accompany a pregnant woman to 2 antenatal appointments if you are the baby’s father, in a long-term relationship with the expectant mother or are the intended parent if you are having a baby through surrogacy.

The eligibility criteria for SPP are the same as for SMP, and you will also need to provide a copy of the MATB1 form to your employer.

What if I am adopting?

When an employee takes time off to adopt a child or have a child through a surrogacy arrangement, they might be eligible for Statutory Adoption Pay and Leave.

Employees can take up to 52 weeks’ Statutory Adoption Leave and this usually starts from the day your adopted child starts living with you, or when an employee has been matched with a child to be placed with them by a UK adoption agency. The amount paid for Statutory Adoption Pay is the same as Statutory Maternity Pay.

What if a mother and father want to share leave?

If this is the case, Shared Parental Leave might be the best option for you! Shared Parental Leave is a relatively new scheme which was brought in by the government to help parents share leave when they have a baby. It can be especially useful when the mother earns more than the father as it may be more financially beneficial for her to go back to work before the father. This scheme allows fathers to be off for longer than 2 weeks, in contrast to SPP.

How can we claim Shared Parental Leave (SPL)?

You can share up to 50 weeks of leave and up to 37 weeks of pay between you as parents. You need to share the pay and leave in the first year after your child is born or placed with your family. You can use SPL to take leave in blocks or take it all in one go. You can also choose to be off work together or to stagger the leave and pay. This is a good way to ensure that parents spend equal time with newborns and share the work between them.

To be eligible for Shared Parental Leave and Statutory Shared Parental Pay, both parents must share responsibility for the child at birth and meet work and pay criteria, which can differ depending on which parent wants to use the shared leave.

If both parents want to use the leave, then they must have been employed continuously by the same employer for at least 26 weeks by the end of the 15th week before the due date and they must stay with the same employer until they start SPL.

Employees can also work up to 20 days during their Shared Parental Leave. These are called ‘shared parental leave in touch days’ or SPLIT days. These days are in addition to the 10 ‘keep in touch’ or KIT days available to those on maternity or adoption leave.

What does this mean as an employer?

When an employee tells you that they are expecting a baby, they need to tell you when they would like their leave to start and how long they plan to take off. You can then let them know the end date for their leave and their expected date to return to work. You must also keep proof of the pregnancy, which is usually the MATB1 form mentioned previously.

The maternity or paternity pay is processed through the payroll as normal and then this cost can be claimed back from HMRC by the employer. The amount that can be claimed depends on whether you are a small employer or not.

A small employer is one who has paid less than £45,000 in class one National Insurance contributions over the last tax year. These companies can claim the full cost back plus an extra 3% compensation on top which is supposed to help with the cost of finding replacement cover for the employee. Larger employers can claim back 92% of the cost.

How this works is that the amount to be claimed back is offset against the PAYE and NI that you owe to HMRC for all the other employees in that pay period. If you do not have enough employees to offset the cost against, you can apply for advance funding which will cover the payments made to the employee while they are on leave. Alternatively, you can ask for a refund after the end of the tax year.

If an employee is not eligible, you must complete form SMP1 or SPP1 and give this to them. They may be eligible for maternity allowance instead.

What if I’m self-employed?

If you are self-employed, you cannot claim Statutory Maternity Pay, however you may be eligible for Maternity Allowance. This is a benefit paid by the government and can be a valuable boost to your income if you are self-employed and taking time off to have a baby.

Maternity Allowance is tax-free, and you can get between £27 to £172.48 a week for 39 weeks if you are self-employed (2023/24 tax year).  To get the full allowance each week, you need to have paid Class 2 National Insurance contributions for at least 13 of the 66 weeks before your baby’s due date.

When class 2 NI is abolished, we assume that anyone with profits over £6,725 for the tax year will automatically be eligible.

To claim Maternity Allowance, you need to complete an MA1 form and send to HMRC. You can do this online as well as by post.

Like SMP, you cannot work while claiming Maternity Allowance, apart from the 10 keep in touch days.

Unfortunately, there is no benefit available for self-employed men hoping to go on paternity leave.

Resources and calculators:

If you are unsure of your eligibility for any of these schemes and allowances, there are calculators available online for you to check. There is a calculator for maternity/paternity leave here – https://www.gov.uk/maternity-paternity-pay-leave. This will also work if you want to see if you are entitled to maternity allowance.

There is also a calculator for employers which you can find here –https://www.gov.uk/maternity-paternity-calculator

Remember to communicate openly with your employer/employee, seek support from available resources, and prioritise your well-being as you embark on this exciting journey into parenthood.

We hope you found this helpful! Please contact us with any questions that you may have at info@futurecloud.co.uk.