Minimum Wage and Statutory Pay Obligations

2. Maternity Pay

Many pregnant women on ordinary maternity leave are entitled to statutory maternity pay (SMP).

This is treated as income and is paid net of income tax and National Insurance contributions.

2.1 To qualify for statutory maternity pay, a woman must have completed 26 weeks' service by the end of the 15th week before the week the birth is due. This is known as the 'qualifying week'.

• She must have average weekly earnings of at least £90 in the eight weeks up to and including the qualifying week.
• She must still be pregnant, or have had her baby, by the 11th week before the expected week of childbirth.
• She must have stopped working, or taken ordinary maternity leave.
• She must have provided evidence of the expected date of birth.

2.2 There are two rates of SMP.

• A woman entitled to SMP receives the higher rate, equal to 90 per cent of her average weekly earnings (if more than £117.18 per week), for the first six weeks.
• She then moves to a fixed rate of £117.18 or 90 per cent of her average earnings if lower for up to 33 more weeks. These are set rates and are not altered in the case of multiple births.
• The level of SMP has to be recalculated if a pay rise takes effect at any time between the start of the reference period and the end of the maternity leave, both ordinary and additional.

2.3 Employees not entitled to SMP may qualify for maternity allowance (see 3).

2.4 The Government compensates employers for making SMP payments.

• Small businesses can claim back more SMP than they pay out. You can claim 104.5 per cent if you are a small enterprise with total NI payments (employer's and employees' combined) of less than £45,000 a year.
• Larger employers can reclaim 92 per cent of the gross SMP paid.

2.5 SMP stops if the employee is taken into custody, or dies.

• Mothers can work for 10 days during maternity leave (known as 'keeping in touch days') without it affecting their right to SMP.

2.6 Some employers offer enhanced maternity pay to some or all of their female employees.