Small Business Accounting

What is Statutory Maternity Pay?

By

Chris Andreou

What is Statutory Maternity Pay? guide

Contents

Statutory Paternity Pay is the amount of money that must by law be paid to the mother of a new baby while she is away from her job.

Statutory Maternity Pay (SMP) is a form of financial support provided by the UK government to help working mothers take time off work to have a baby. It is designed to help working mothers cover some of their lost income while they are away from work.

The amount of SMP that a mother is entitled to depends on her income and length of service with her employer. Generally, it is paid for up to 39 weeks, with the first six weeks being paid at 90% of the mother's average weekly earnings. The remaining 33 weeks are paid at a flat rate of £151.20 per week, or 90% of the mother's average weekly earnings, whichever is lower.

In order to be eligible for SMP, a mother must have been employed by the same employer for at least 26 weeks by the end of the 15th week before the expected week of childbirth. She must also have earned an average of at least £118 per week in the eight weeks leading up to the 15th week before the expected week of childbirth.

For those setting up a business or who have only recently started a business, it is important to be aware of the rules and regulations surrounding SMP. Employers must provide SMP to eligible employees, and must pay the SMP to the employee for up to 39 weeks. Employers are also responsible for paying National Insurance contributions on the SMP payments.

It is important to note that SMP is not the same as Maternity Allowance, which is a benefit paid by the Department for Work and Pensions. Maternity Allowance is available to those who do not qualify for SMP, such as the self-employed, or those who have not been employed for long enough to qualify.

For those setting up a business or who have only recently started a business, it is important to be aware of the rules and regulations surrounding SMP. Employers must provide SMP to eligible employees, and must pay the SMP to the employee for up to 39 weeks. Employers are also responsible for paying National Insurance contributions on the SMP payments.

In addition, employers must inform the HMRC of their SMP payments, and must provide the employee with a written statement of their SMP entitlement. Employers must also keep records of all SMP payments, including the date of payment, the amount paid, and the name of the employee.

Finally, employers should be aware that SMP payments are taxable, and should be included in the employee's tax return. Employers must also deduct tax and National Insurance contributions from the SMP payments, and must pay these to the HMRC.

In conclusion, Statutory Maternity Pay is an important form of financial support provided by the UK government to help working mothers take time off work to have a baby. For those setting up a business or who have only recently started a business, it is important to be aware of the rules and regulations surrounding SMP, and to ensure that all payments are made correctly.

<p>Statutory Paternity Pay is the amount of money that must by law be paid to the mother of a new baby while she is away from her job.</p>

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