Statutory maternity pay – employee rights and employer obligations Our comprehensive employer’s guide to maternity pay covers everything from how to calculate pay, contractual requirements, and terms and conditions for employees. Written by Helena Young Updated on 19 July 2023 Our experts We are a team of writers, experimenters and researchers providing you with the best advice with zero bias or partiality. Written and reviewed by: Helena Young Lead Writer Our independent reviews are funded in part by affiliate commissions, at no extra cost to our readers. The birth of a child is a wonderful time in your employee’s life. But, like any leave period, it presents various legal and HR challenges for the employer to navigate – particularly when it comes to managing payroll.Depending on their contract type, new mothers are entitled to either Statutory Maternity Pay (SMP), maternity allowance, or enhanced maternity pay. Each comes with different costs and repayment terms that must be understood by all parties.There is a great deal of sensitivity surrounding maternity leave and pay. It is important for bosses to be 100% certain of their legal obligations, to ensure staff members do not feel they have received unfavourable treatment – or worse, discrimination. With a good maternity leave policy, you can also attract and keep great talent and set out an inclusive company culture.Below, we’ve provided a simple, accessible explainer of maternity pay including how it works, who is eligible, and what the rules are for small businesses. In this article, you'll find: What is Statutory Maternity Pay? How maternity leave works in the UK Statutory maternity pay for small businesses Claiming back statutory maternity leave Enhanced maternity pay Unpaid parental leave Conclusion Maternity pay FAQs What is Statutory Maternity Pay?Statutory Maternity Pay is the minimum amount of money that a business must pay when a woman takes time off work to have a baby. It is a key part of the staff benefits package for employers. SMP is organised into two stages:In the first six weeks, the worker gets 90% of their average weekly earnings (before tax)In the next 33 weeks, the worker gets £172.48 OR 90% of their average weekly earnings (whichever is lower).If you’ve not already done the maths, that means statutory maternity pay is paid for up to 39 weeks. That said, the mum can return to work earlier than this, should they choose. They can also choose to remain on maternity leave beyond 39 weeks, but without statutory maternity pay after that point.The shortest maternity leave an employee can take is two weeks (this increases to four weeks if they are based in a potentially unsafe workplace, like a factory). Of course, a good employer should support mothers going on the length of maternity leave of their choice, and not pressurise them to change plans around company needs.Who is eligible for SMP?Naturally, to first know if the employee can claim SMP, you will first need to be aware that they are pregnant.Some employers ask for a MATB1 Maternity Certificate as proof of pregnancy. The employee receives this after the 20th week of pregnancy, and it includes the date the baby is due. However, the staff member may inform you of their pregnancy before the 20th week.Once an employee has informed you they are expecting, they will be eligible for SMP if they:Earn a minimum of £123 per week under their employment contractHave told the employer of their pregnancy at least 15 weeks before their due date (also known as the “qualifying week”)Have worked for the employer for at least 26 weeks up to the qualifying week (they cannot be an agency work, freelancer, or on a zero-hour contract)If an employee is not eligible for SMP, the business owner has seven days to explain why and provide proper reasoning. You should use the SMP1 form, available to download on the GOV.UK website, to do this.What if I’m self-employed?If the employee does not qualify for statutory maternity pay, for example if they are self-employed, they should apply for maternity allowance from HMRC.Maternity allowance is a form of government benefit. Through it, the individual is entitled to £172.48 a week or 90% of their average weekly earnings (whichever is less) for 39 weeks. If they take the full 52 weeks Statutory Maternity Leave, the final 13 weeks will be unpaid. How maternity leave works in the UKThere are three types of maternity leave available to UK employees. Here’s a quick runthrough of what they are, and what distinguishes them from the other:1. Ordinary Maternity Leave (OML): this stage refers to the first 26 weeks of maternity leave. If the woman returns to work during this period, they have the legal right to return to exactly the same job role and contract they had before leaving.2. Additional Maternity Leave (AML): this stage refers to the latter 26 weeks of maternity leave. The business has a legal right to hire a full-time replacement during this period. However, they must offer a position with similar pay and conditions to the employee who went on leave.3. Shared Parental Leave (SPL): Shared parental leave gives new parents the option to split any time taken off work between them. Workers may be eligible for shared parental leave (SPL) of up to 50 weeks and Statutory Shared Parental Pay (ShPP) of up to 37 weeks.This needs to be taken in the first year after the birth or adoption of a child. It can be taken in blocks or in one go. Birth parents are eligible if they:Share responsibility for the child at birthHave been employed by their respective companies continuously for 26 weeks by the time the application is submittedDo not leave their respective companies while they are on SPL or accepting ShPPEarn at least £116 a weekHow much maternity leave can an employee take?Because of how the above leave types are organised, the total maximum amount of time that an eligible employee can take for maternity leave is up to 52 weeks (if they use both OML + AML).As we’ve explained, maternity pay does not have to be distributed after 39 weeks. Legally, this means an employer does not have to offer maternity pay for the whole length of time a person is on leave – although it might be advisable for the business to do so.It is important to note that your employee is still entitled to all maternity rights, including Statutory Maternity Pay, if the baby is born early, is stillborn (after the 24th week of pregnancy), or dies after birth.When does maternity leave start?Eligible women can start their maternity leave any day from 11 weeks before the due date. The leave will start automatically if:The baby arrives early, orThe employee goes off work with an illness related to their pregnancy in the four weeks before the week of the due dateSo, because the employee must notify the employer of their pregnancy at least 15 weeks before their baby is due to be born, the business will have at least four weeks to prepare.Keeping in touch (KIT) daysYour employee may want to carry on working for you whilst they are on maternity leave. They can work a maximum of 10 paid keeping in touch (KIT) days without their maternity leave or pay being cut.It is for the employer to determine their policy with regards to payment for KIT days, however as a minimum this must be at least national minimum wage for the relevant age of the employee. They cannot demand KIT days and you cannot force them to take them.Mums can use these days to come in and talk about their return to work, and receive any updates on how the organisation is developing. They don't have to work a whole day, even a one hour meeting would count. KIT days can also be used for training.If the employee does work more than ten days, they will not receive maternity pay for the weeks that they work.Promotion opportunities and restructuresWhatever type of leave your employee is on, and regardless of when they choose to return to full-time work, you must inform them about the following circumstances:If there is an opportunity for them to be promoted, you must give them sufficient notice to applyOrganisational restructuring that could affect them once they have returned from leave Can I ask a pregnant manager about her post-maternity leave plans? Q: A key member of my management team is about to take maternity leave. It would help if we could establish on what basis she wants to return to work before she goes. Is there any way that I can approach her about this, formally or informally?A: Derek Kemp of Liquid HR, says: “This is a very delicate situation and you must ensure that you proceed with caution. You can’t insist the manager tell you what her return to work intentions are, or ask for an application for flexible working prior to her taking leave.“I think it’s reasonable to agree with the manager about a process of communication throughout her maternity leave period. Be aware that this communication should be reasonable and not give any cause for concern on behalf of the employee. A thorough handover prior to the beginning of her leave must also be agreed to ensure the smooth ongoing management of the senior manager’s role.“This is a great opportunity for both you and your manager to discuss all of the available options and prompt a decision regarding any intention to alter her working pattern.” Statutory maternity pay for small businessesBecause it is a legal requirement, SMEs face a civil penalty from HMRC if they fail to pay the correct amount. That’s why it is important to be clear in your employment contracts how much maternity pay employees will receive, how long for, and under what conditions.How do small businesses calculate SMP?Calculating Statutory Maternity Pay is a complicated process with a lot of jargon involved. To help, we’ve broken it down into three, easy-to-follow steps.Step 1. Gather your informationTo work out how much SMP a staff member will be due, the employer needs four pieces of information:Due date (from the MATB1 form or as told to you by the employee)Your employee’s intended start date for SMP, if they have given you oneYour employee’s gross pay and the dates they were paidConfirmation that the employee pays Class 1 NIC on their salary and bonusStep 2. Calculate average earningsThe next step is to calculate the employee’s average weekly earnings. These should be based on pay received during the ‘relevant period’ (eight weeks before the qualifying week).The end of the relevant period is the last normal payday on, or before, the Saturday of the qualifying week.The average weekly earnings in the relevant period must not be less than the Lower Earnings Limit for National Insurance contributions, otherwise the employee will not be eligible for SMP. In 2023, the limit is £123 per week.GOV.UK example: An employee is paid weekly and the baby is due on 23 March 2024:QualifyingPaydayLast payday 8 weeks before the end of the relevant periodLast payday on or before the Saturday of the qualifying weekRelevant period3 December 2023 to 9 December 2023Tuesday13 October 20238 December 202314 October 2023 to 8 December 2023Business owners should add up all the earnings paid during the relevant period and divide by eight (the number of weeks in the relevant period).If the employee is paid monthly, the calculation will look a bit different:Qualifying weekPaydayLast payday 8 weeks before the end of the relevant periodLast payday on or before the Saturday of the qualifying weekRelevant period3 December 2023 to 9 December 2023Last day of the month29 September 202330 November 202330 October 2023 to 30 November 2023Business owners should add up all the earnings paid during the relevant period and divide them by 2 (number of months in the relevant period).Then, multiply the figure by 12 (number of months in the year), and finally divide it by 52 (number of weeks in the year).Step 3. Start issuing maternity payOnce you know the employee’s average weekly earnings, you’ll be able to work out SMP and pay this to the individual as you would their wage slip.SMP is a weekly payment. Payments start on the first day of maternity leave. If the employee leaves work on a Wednesday, they will be paid on a recurring basis every Wednesday until they return from mat leave.Example: An employee’s average weekly earnings are £230. For their first six weeks on mat leave, they will receive 90% of this amount, or £207, every Wednesday. For the remaining weeks they will receive the statutory amount of £172.48 every Wednesday.How do small businesses pay SMP?Maternity pay should be paid out at the same time the employee would have received a wage packet – whether that’s monthly or weekly. As SMP is based on average earnings, not salary, any bonuses or commission form part of that calculation.They should start from the day the employee chooses to begin their maternity leave. Tax and National Insurance should also be deducted as normal. Claiming back statutory maternity leaveFor small businesses with few employees and limited resources, a staff member going on maternity leave can feel like a bundle of not-so-joy. But don’t worry, you can reclaim most or all SMP back from HMRC.Businesses of any size are entitled to reclaim 92% of an employees’ SMP from HMRC. You can use payroll software to calculate how much you’ve paid in statutory pay and how much you are able to claim back.This amount goes up to 103% if your business is eligible for Small Employers’ Relief. You are entitled to this support package if you have paid less than £45,000 in Class 1 National Insurance contributions in the complete tax year before the qualifying week.To claim the money back, HMRC will require you to produce an Employer Payment Summary (EPS). This must be submitted each month by the 19th of the proceeding month that you’re reclaiming pay for (eg. a claim for SMP issued in the month of July would need to be submitted before August 19th).HMRC’s basic PAYE tools can help you do this if you have fewer than ten employers. You can also use HR software to track and manage the files.What if I can’t afford to make payments?HMRC has a support channel in place in case your business cannot afford to make SMPs. The business owner must submit an application online or via post, up to four weeks before the first payment is due.🚨 Be aware that if you make a mistake on your application form, HMRC could charge you a maximum civil penalty of £3,000 per employee.If the company has become insolvent, HMRC will cover all leave payments (including for Statutory Maternity Pay) if the employee was on maternity leave when the company became insolvent. Enhanced maternity payWe’ve been discussing statutory requirements on maternity pay. But there are no rules barring you from offering over this amount to women on mat leave – in fact, it’s something more companies are choosing to do as part of Enhanced Maternity Pay (EMP).Statutory vs Enhanced Maternity PayEnhanced Maternity Pay is awarded to workers on top of statutory maternity pay. The most popular form of enhanced maternity leave, offered by 42% of UK firms, was found to be full pay for six weeks. This is then followed by the standard statutory rate for the remaining weeks of leave.However, the business could choose to pay its employees full pay for three months, six months, or even the entire period of maternity leave. The policy should be introduced to your benefits and perks package, based on what you feel comfortable the company can afford.Because of how expensive EMP can be, most organisations choose to have a qualifying period of service ranging from 6 months to 12 months before employees are eligible to apply for EMP.Some also introduce a clawback clause stipulating certain terms and conditions to qualify for the payment.For example, an employee might be given a minimum length of time they must return to the business to receive the full EMP. Clawbacks should be handled delicately, however. Any policies that pressurise the person to return to work before they are ready could backfire.Do employers have to offer Enhanced Maternity Pay?Employers are under no obligation to offer EMP. Particularly for cash-strapped SMEs, it might make more sense to stick to statutory payments if you are worried about the impact EMP could have on balance sheets.However, having an EMP policy adds an attractive feather to your company’s cap. It tells job seekers that you are a generous employer with a supportive company culture.Not to offer these kinds of policies could prove detrimental in the long-term. The average age that people become parents in the UK is increasing, meaning parents are increasingly likely to be in senior or mid-level roles.Most businesses choose to offer EMP so they can more easily attract these experienced staff members and hold onto their talent. In fact, research by XpertHR in 2022 found that 65% of UK organisations now pay some form of EMP.Flexible workingHaving a child can be a stressful period for new parents. There are hospital appointments to go to, sleepless nights, and often childcare difficulties.One of the easiest ways for businesses to help smooth the transition back to the office is to offer flexible working. Flexible work arrangements give the employee more control over how long, where, when and at what time they work.Parents can make use of these practices to better juggle care responsibilities and work commitments. Examples include remote working, hybrid working, flexitime, or part-time work.The government recently unveiled its Flexible Working Bill, which will come into effect this year. Under the new regulation, all employees now have the right to request flexible working from day one.You must deal with every flexible working request in a reasonable manner. This means you must assess the advantages and disadvantages of the application, and meet with the employer to discuss the application. If you say no, you must offer an appeal process.A return to work mother has a legal entitlement to request a flexible working arrangement but not to be granted one. Employers can reject an application for any of the following reasons:It will create extra costs that will damage the businessThe work cannot be reorganised among other staffPeople cannot be recruited to do the workFlexible working will affect quality and performanceThe business will not be able to meet customer demandThere’s a lack of work to do during the proposed working timesThe business is planning changes to the workforce Can I say no to part-time? Q: One of my regional sales managers returned from maternity leave two months ago and has requested to go part-time. I’d love to help her, but I need someone who’s motivating the sales team and building client relationships full-time. How do I justify saying no without losing goodwill and where do I stand legally?Yasmin Halai-Carter, of First Impressions Last Longer writes: “It isn’t easy balancing full-time work and motherhood. Think very carefully about letting your employee go. Motherhood may bring a whole new edge and dynamism to her performance. Think about how demotivating her leaving could be.“If you’re adamant it won’t work, then be honest with her. Let her know that the role demands a full-time commitment and senior staff working part-time isn’t the vision you have for the company. She may surprise you and come up with an alternative.“As an employer, we run the risk of litigation if we don’t look for ways it could work for both the organisation and the employee. As a mother, we need to remember how important it is for us to be accepted at work without feeling penalised for having had a baby.” Unpaid parental leaveAn employee is entitled to 18 weeks of unpaid parental leave (per child or adopted child) up to the child’s 18th birthday. Unless you agree otherwise, this is limited to four weeks in a year for each parent.There is no specific reason why a parent should take parental leave, but it might be used to spend more time with their children in school holidays. As a rule, 21 days notice must be given in advance of the start date, or 21 days before the adopted child is expected.Unpaid parental leave must also be taken in whole weeks rather than individual days (unless you allow otherwise, or if the child is disabled). To be eligible, the parent must:Have worked at the company for more than one yearBe named on the child’s birth or adoption certificateNot be self-employed, an agency worker or contractorNot be a foster parent (unless they’ve agreed parental responsibility in court)An employee is entitled to 18 weeks unpaid parental leave if their child is entitled to receive a disability living allowance.Parents do not have to be living with the child to qualify, but the leave must be taken within a set period and leave cannot be transferred between parents. However, both parents qualify if they are both working. ConclusionStatutory Maternity Pay is a valuable benefit for the UK. Without it, the workforce would also surely suffer, as evidenced by the hundreds of thousands of working women who have relied on SMP to help them balance a career alongside care commitments.Small businesses also benefit from SMP. It can help to attract and retain talented employees, and ensure an inclusive workplace where staff feel valued and supported. Plus, the government’s reimbursement schemes means qualifying SMEs can end up claiming back more than they pay out.But, as the above guide has shown, SMP is also a confusing area of employment law. The wellbeing risks for your employees of getting it wrong, not to mention the financial risks for a business, means it is essential for business owners to understand their obligations and the processes involved. Frequently Asked Questions Do you get full pay for maternity leave? Not by law. Any individual on maternity leave is entitled to Statutory Maternity Pay (SMP). This covers 90% of average weekly earnings for the first six weeks, and then £172.48 OR 90% of their average weekly earnings (whichever is lower) for the remaining weeks. Whether you receive more than this via Enhanced Maternity Pay (EMP) is at the discretion of the employer. EMP can be up to full pay, but it’s up to the employer and not a legal obligation. How long do you have to be in a job to get statutory maternity pay? To qualify for SMP you must have been in your job role for at least 26 weeks, up to and including the week that your baby is due. You must be a full-time employee to get SMP. Agency workers, or freelancers, might not be entitled to the full payment and should instead apply for maternity allowance. Is maternity pay going up 2023? On April 1, the government increased statutory maternity pay by 10% to ensure rates keep pace with inflation. Under the changes, new mums will now receive a minimum of £172.48 per week (compared to £156.66 per week). Startups.co.uk is reader-supported. If you make a purchase through the links on our site, we may earn a commission from the retailers of the products we have reviewed. This helps Startups.co.uk to provide free reviews for our readers. It has no additional cost to you, and never affects the editorial independence of our reviews. Share this post facebook twitter linkedin Written by: Helena Young Lead Writer Helena is Lead Writer at Startups. As resident people and premises expert, she's an authority on topics such as business energy, office and coworking spaces, and project management software. With a background in PR and marketing, Helena also manages the Startups 100 Index and is passionate about giving early-stage startups a platform to boost their brands. From interviewing Wetherspoon's boss Tim Martin to spotting data-led working from home trends, her insight has been featured by major trade publications including the ICAEW, and news outlets like the BBC, ITV News, Daily Express, and HuffPost UK.