What is statutory maternity pay? A 2026 Guide to Eligibility

Statutory Maternity Pay, or SMP, is something you pay to an eligible employee through your payroll when they go on maternity leave. The crucial part? You can reclaim 100% of it from HMRC, so it's not a direct cost to your business in the long run.

A Guide to Statutory Maternity Pay

For many business owners, the rules around Statutory Maternity Pay can feel like a maze of jargon and legal duties. It's easy to get bogged down in the details, but at its heart, the concept is quite simple.

Think of it this way: the government funds this support for new parents, but it uses your company’s payroll as the vehicle to deliver it. Your legal responsibility is to handle the administration—paying the right amount at the right time. The key takeaway is that this is money you are fronting, not losing. When managed correctly, SMP is financially neutral for your business, apart from a temporary dip in cash flow.

The Core Components of SMP

Getting SMP right really just comes down to understanding a few key moving parts. Here's a quick look at what we'll cover, breaking the process down into manageable steps.

• Payment Duration: SMP runs for up to 39 consecutive weeks. It's a significant period of support for your employee.
• The Two-Tier Pay Rate: The amount paid isn't a flat rate. It starts at a higher level before settling into a standard weekly payment.
• Employee Eligibility Rules: Not everyone qualifies for SMP. There are specific rules tied to their earnings and how long they've worked for you.
• Your Payroll and Reclaiming Duties: There’s a clear process for paying SMP, reporting it to HMRC, and claiming back every penny.

Statutory Maternity Pay isn't just another box-ticking exercise. It's a cornerstone of how the UK supports working families. Getting a firm grip on the process helps you meet your obligations confidently while keeping your business's finances on track.

The payment structure is probably the most important detail for getting your payroll calculations right. It's split into two distinct phases.

To give you a clear picture, here's how the rates are structured for the 2025/2026 tax year.

Statutory Maternity Pay at a Glance for 2026

This table gives a quick reference to the key figures and timeframes for SMP in the 2025/2026 tax year, helping you understand the payment structure instantly.

This two-part system is designed to give the employee a bigger financial cushion right after their baby arrives by linking the initial payments directly to their normal salary. After that, it switches to a predictable, standard rate for the rest of the paid leave period.

Once you understand these basics, you're in a much stronger position. An employee's maternity leave announcement no longer has to be a source of stress or uncertainty. Instead, you'll have a clear plan ready to go.

Confirming Employee Eligibility for SMP

Before you even think about running the numbers for Statutory Maternity Pay, the first step is always the same: checking if your employee is actually eligible. This isn't a matter of discretion; there's a clear, government-mandated checklist you must follow. Getting this right from the start saves a world of headaches and keeps you compliant.

Think of it as a series of gates. Your employee has to pass through each one to qualify for SMP. Let's walk through them together.

The Continuous Employment Rule

The first gate, and often the trickiest, is what's known as the continuous employment rule. It all comes down to specific dates.

To qualify, your employee must have worked for you, without a break, for at least 26 weeks leading up to the 15th week before their baby’s expected due date. This crucial 15th week is called the 'qualifying week'.

Here’s how to work it out:

• Find the Due Date: Grab the employee’s MAT B1 certificate (their proof of pregnancy) and find the expected week of childbirth.
• Count Back 15 Weeks: The Sunday of that 15th-week-before period is the end of the qualifying week.
• Count Back Another 26 Weeks: To pass the test, your employee must have been on your payroll on or before this date.

Let's make that real. Say an employee's baby is due on 10th August. The qualifying week starts in late April. They would need to have been employed by you for 26 weeks before that point, meaning a start date sometime in the previous October. If you need a hand tracking these details, our guide on creating a new employee starter checklist is a great place to start building good record-keeping habits.

The Earnings Threshold

Next up, we need to look at what they earn. Just being an employee isn't enough; their pay must meet a minimum level.

An employee’s average weekly earnings (AWE) must be at least the Lower Earnings Limit (LEL) during a specific timeframe called the 'relevant period'. For the 2025/2026 tax year, the LEL is set at £125 per week. This relevant period is typically the eight weeks just before the qualifying week we mentioned earlier.

Crucial Insight: This calculation is based on an employee's gross pay – the amount before any tax or National Insurance deductions. Even if their hours and pay fluctuate, you have to average it out over this eight-week window to see if they make the cut.

If their average earnings dip below this threshold, they won't be eligible for SMP, even if they have more than enough continuous service.

The Notification Requirement

Finally, the ball is partly in the employee’s court. They have to give you the right paperwork on time.

This boils down to two simple things:

1. Proof of Pregnancy: The employee must provide you with their MAT B1 certificate. A doctor or midwife usually issues this around the 20-week mark and it officially confirms their due date.
2. Sufficient Notice: They need to tell you when they want their SMP payments to begin, giving you at least 28 days' notice. They can change their mind later, but they still have to give you 28 days' notice of any new date.

The flowchart below shows what happens once an employee meets all these criteria and their SMP payments begin.

As you can see, the pay is higher for the first six weeks and then settles at a standard rate for the remaining 33 weeks. If your employee doesn’t tick all three boxes—continuous employment, earnings, and notification—they won’t qualify. In that case, you have a legal duty to give them an SMP1 form within seven days of your decision, clearly explaining why.

How to Calculate Statutory Maternity Pay Accurately

When it comes to payroll, getting Statutory Maternity Pay (SMP) right is crucial. Not only does it ensure you’re meeting your legal obligations, but it also provides vital support for your employee. The calculation itself isn't a single flat rate; it's split into two distinct periods, each with its own way of working things out.

For the first six weeks of maternity leave, your employee is entitled to 90% of their Average Weekly Earnings (AWE). This AWE figure is the foundation for everything that follows, so calculating it correctly is the most important first step.

After that initial period, the rate changes for the remaining 33 weeks. Your employee will receive either a standard weekly rate set by the government or 90% of their AWE—whichever of the two is lower.

Determining an Employee’s Average Weekly Earnings

Before you can work out any SMP payment, you need to establish the employee's Average Weekly Earnings (AWE). This isn’t as simple as looking at their last payslip. Instead, it’s a specific calculation based on what they earned during a set eight-week "relevant period."

This relevant period usually ends just before the 'qualifying week' (which is the 15th week before the baby's due date). To get the AWE, you need to:

1. Pinpoint the relevant period. The exact dates will depend on how you pay your employee—weekly, monthly, or on another schedule.
2. Add up their total gross earnings. You'll need to total everything they were paid during that eight-week window. This means their basic salary plus any commission, bonuses, or overtime. It’s their total pay before any tax or National Insurance deductions.
3. Find the average. Simply divide that total by the number of weeks in the period (which is almost always eight). The result is their AWE.

This AWE figure is the number you'll use for both phases of the SMP calculation, so it pays to be precise.

The Two-Tier Payment Structure

Once you have the AWE sorted, you can calculate the weekly SMP payments. Think of it in two stages:

• First 6 Weeks: This is straightforward. The payment is AWE x 0.90. Your employee gets 90% of their average weekly pay.
• Following 33 Weeks: For the rest of the maternity pay period, you’ll compare two figures and pay the lower one: either the government’s statutory weekly rate or 90% of their AWE.

As an employer in the UK, you pay the SMP and then reclaim the cost from HMRC. For the 2025/26 tax year, which starts on 6 April 2025, the statutory rate is set to rise to £187.18 per week. This is the amount you'll likely pay for the final 33 weeks, unless 90% of your employee's AWE is less than this. You can check all of the latest statutory payment increases on the government's site.

To qualify for SMP at all, an employee's AWE must be at least the Lower Earnings Limit. For 2025/26, this is £125 per week. If their earnings fall below this threshold, they won't be eligible for SMP, even if they've worked for you long enough.

A Worked Example of an SMP Calculation

Let's walk through a real-world example to see how it all fits together. Imagine your employee, Sarah, earns a steady £2,000 per month and has met all the other SMP eligibility rules.

1. Calculate Her Average Weekly Earnings (AWE):
First, we need to turn her monthly salary into a weekly average.
(£2,000 x 12 months) / 52 weeks = £461.54 AWE

2. Calculate the First 6 Weeks' Payment:
This is simply 90% of her AWE.
£461.54 x 0.90 = £415.39 per week

3. Calculate the Following 33 Weeks' Payment:
Now, we compare 90% of her AWE (£415.39) with the 2025/26 statutory rate (£187.18). The statutory rate is lower, so that's what she'll receive.
Payment = £187.18 per week

4. Calculate the Total SMP:
Let's add it all up for the full 39 weeks.

• First 6 weeks: 6 x £415.39 = £2,492.34
• Next 33 weeks: 33 x £187.18 = £6,176.94
• Total SMP Payable: £2,492.34 + £6,176.94 = £8,669.28

By breaking it down like this, you can confidently work out what your employee is owed, ensuring everything is handled correctly and by the book.

Your Duties for Payroll and HMRC Reporting

Once you’ve confirmed an employee is eligible for Statutory Maternity Pay (SMP) and they've started their leave, your role shifts from planning to administration. It's now about managing the payments through your payroll and, just as importantly, reporting it all correctly to HMRC.

Think of it like this: you're temporarily handling the government's money. You'll pay out the SMP on your employee's usual payday, whether that’s weekly or monthly. And just like a normal salary, SMP is subject to PAYE tax and National Insurance deductions.

This means you must run the payment through your payroll software as standard earnings, applying all the usual deductions. If you need a refresher on the nuts and bolts, our guide explains in detail what PAYE is for employers. Getting this right keeps the employee's tax record straight and ensures you're compliant.

Reclaiming SMP Payments from HMRC

Here’s the part that really matters for your business's finances: getting the SMP back. The good news is you aren't meant to foot this bill yourself. The government reimburses you for every penny of SMP you pay out.

This is where your payroll reporting plays a vital role. You reclaim the funds simply by telling HMRC how much SMP you’ve paid during a pay period.

You do this by sending an Employer Payment Summary (EPS) to HMRC. This report details the SMP you've paid out, and that amount is then deducted from your total PAYE bill for the month. For instance, if you owed HMRC £1,000 in tax and NI but paid £800 in SMP, you would only need to pay HMRC the £200 difference.

This process is a lifeline for cash flow. By reporting SMP correctly via an EPS, you reduce your immediate outgoings to HMRC, effectively reclaiming the money in real time rather than waiting for a distant refund.

This system is a huge deal. To give you some perspective, the UK government's spending on SMP was forecast to hit a massive £2.8 billion in the 2023/24 financial year. It’s a core part of supporting working families, and your accurate reporting is what ensures you recover your business’s slice of that total promptly.

Essential Record Keeping for Compliance

Keeping good records isn't just good practice; it's a legal requirement. HMRC can request your records at any time to check that your SMP calculations and payments are correct, and not having them can lead to penalties.

You must keep the following records for at least three years from the end of the tax year they relate to:

• The employee’s MAT B1 certificate as proof of pregnancy.
• A record of the date the employee gave you notice of their leave and their intended start date.
• Clear documentation showing every SMP payment made.
• The worksheets or software logs showing how you worked out their Average Weekly Earnings (AWE).
• Copies of every Employer Payment Summary (EPS) you submitted to HMRC.

To make these tasks more manageable and less prone to error, many businesses rely on robust HR software solutions with integrated payroll functionality. These tools can automate AWE calculations, generate payment figures, and prepare the EPS for you. This dramatically cuts down on administrative time and the risk of mistakes, leaving you free to support your employee while knowing the paperwork is being handled correctly.

SMP vs. Other Types of Maternity Pay: What's the Difference?

While Statutory Maternity Pay (SMP) is the foundation of maternity support in the UK, it’s not the whole story. For both employers shaping their company policies and employees planning for their leave, it's crucial to understand where SMP sits alongside other options.

Think of SMP as the legal baseline—the minimum financial support that every eligible employee is entitled to receive. Some employers choose to build on this foundation with more generous packages, while the government provides a different safety net for those who don't meet the SMP criteria. Let's break down how it all fits together.

Enhanced or Contractual Maternity Pay

Many businesses, especially those wanting to stand out and keep their best people, offer what’s known as Enhanced or Contractual Maternity Pay. This is simply a company's own, more generous maternity pay scheme that tops up the statutory minimum.

Why would a company offer more than they legally have to?

• It makes them a more competitive employer, helping to attract top talent.
• It fosters employee loyalty and can significantly reduce staff turnover after maternity leave.
• It helps build a supportive, family-friendly culture that people want to be a part of.

This kind of pay is defined entirely by the business and should be clearly laid out in the employment contract or company handbook. A typical enhanced package might offer, for instance, 12 weeks of full pay followed by a period on half pay, before the employee transitions to the standard SMP rate. The crucial thing to remember is that this is a discretionary company benefit, not a government requirement.

Maternity Allowance: The Alternative Path

So, what happens if an employee doesn’t qualify for SMP? Maybe they’re a newer team member and haven’t been with you for the required 26 weeks, or their average earnings are just below the Lower Earnings Limit. They aren't left without help; this is where Maternity Allowance (MA) comes in.

Maternity Allowance is a benefit paid directly from the government via Jobcentre Plus, completely separate from your company’s payroll. If you determine an employee isn’t eligible for SMP, you are legally required to give them form SMP1 within seven days. They’ll need this form to apply for MA.

This is a critical distinction for employers. Your role is to manage SMP through your payroll. With Maternity Allowance, your only responsibility is to confirm the employee's ineligibility for SMP. MA is specifically designed for people who are:

• Employed but don’t qualify for SMP.
• Self-employed and therefore not on a company payroll.
• Recently employed or have stopped working.

Understanding this difference allows you to guide your employees correctly. Even if they don’t qualify for SMP, you can point them in the right direction for support. It’s just like knowing the difference between maternity leave and other absences, which we cover in our guide on what is Statutory Sick Pay. Getting a wider perspective can also be useful; looking at broader Paid Family Leave policies shows how different systems provide statutory support for new parents.

Comparing SMP, Contractual Pay, and Maternity Allowance

To make things crystal clear, it helps to see the three main types of maternity pay side-by-side. This table breaks down who pays, who it’s for, and what your employee can generally expect from each.

Ultimately, whether you're an employer deciding on your policy or an employee figuring out your entitlements, knowing these three pathways is key. It ensures everyone understands their rights and obligations, paving the way for a smoother, less stressful maternity leave experience.

Navigating Tricky SMP Scenarios: Your Questions Answered

Even with a good grasp of the basics, real-life situations with Statutory Maternity Pay can throw up some tricky questions. Let's walk through some of the most common queries we see from employers, so you can handle them with confidence and keep everything compliant.

Think of this as your go-to guide for those "what if?" moments.

What Happens if an Employee Leaves During Maternity Leave?

This is a question that trips up a lot of employers, but the answer is surprisingly clear-cut. Once an employee has qualified for SMP, you are legally required to pay it for the full 39-week period. This holds true even if they resign or are made redundant after their qualifying week.

It helps to think of it this way: the moment they qualify, their SMP entitlement becomes a separate legal obligation, detached from their employment contract. You'll need to keep processing their SMP on their normal pay schedule and continue reclaiming it from HMRC until the 39 weeks are up.

Can an Employee Work While Receiving SMP?

Yes, they can, but within strict limits. Employees can work for up to 10 'Keeping in Touch' (KIT) days during their maternity leave without losing their SMP for that week.

A KIT day isn't just about coming into the office. It can be any work-related activity, like attending a training course, joining a crucial team meeting, or completing a specific task. The key thing to remember is that KIT days are completely voluntary and must be agreed upon by both you and the employee—neither of you can insist on them.

If an employee works more than their 10-day allowance, they will forfeit their SMP for any week in which they do that extra work. So, if they work on the 11th day, the entire week's SMP for that week is lost.

What if My Business Cannot Afford the SMP Payments?

First things first: paying SMP is a legal requirement. However, HMRC understands that for many businesses, especially smaller ones, fronting these payments can put a real strain on cash flow.

If you can see a shortfall on the horizon, don't panic. You can apply to HMRC for advance funding to cover the SMP you need to pay out. Better yet, if your business's total National Insurance contributions were £45,000 or less in the last tax year, you can reclaim 103% of your SMP payments. This gives you a little extra back to help cover the administrative side of things. The most important step is to act quickly—if you anticipate a problem, speak to HMRC or your accountant straight away.

Managing complexities like Statutory Maternity Pay can quickly eat up your time and add a layer of stress you just don't need. At Stewart Accounting Services, we handle these payroll burdens for you, ensuring everything is accurate, compliant, and hassle-free. Let us give you back your time, improve your bottom line, and provide peace of mind by managing it all for you at https://stewartaccounting.co.uk.