How to Calculate Maternity Pay

This guide offers a comprehensive overview of the intricacies involved in calculating your eligibility for Statutory Maternity Pay (SMP) and Maternity Allowance (MA).

Sections in this article:

Establishing Your Qualifying Week
Calculating Statutory Maternity Pay
Calculating Maternity Allowance

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1. Establishing Your Qualifying Week

To establish maternity pay entitlement, the first crucial step is determining the expected week of childbirth and the corresponding qualifying week. It’s important to note that these weeks always commence on a Sunday and end on a Saturday.

The expected week of childbirth coincides with the week of your estimated due date. It commences on the Sunday before your due date and concludes on the Saturday after your due date. In case your due date falls on a Sunday, your expected week of childbirth starts on the same day.

You can readily locate your estimated due date on your MATB1 certificate or consult your GP or midwife. Regardless of whether you intend to deliver your child earlier or later than the due date, as in the case of a caesarean section, the calculation remains the same.

Your qualifying week falls on the 15th week preceding your expected week of childbirth. To determine your qualifying week, count back 15 weeks from the first day of your expected week of childbirth.

2. Calculating Statutory Maternity Pay

Calculating your eligibility for Statutory Maternity Pay (SMP) hinges on two key factors:

The duration of your service with your employer.
Meeting the earnings threshold during the 8 weeks (or two months) before your qualifying week, referred to as the ‘relevant period.’

a. Length of Service: For SMP qualification, you must have maintained continuous employment with the same employer for a minimum of 26 weeks by the end of your qualifying week. Typically, this implies that you became pregnant after commencing your employment with the same employer. To pinpoint this date, simply count back 26 weeks from the last day of your qualifying week (Saturday).

b. Earnings Threshold: To be eligible for SMP, your regular weekly earnings should not fall below the lower earnings limit (£123 per week in 2023/24) for national insurance contributions during the reference period. This encompasses gross earnings, comprising wages, overtime, commissions, bonuses, as well as any statutory family pay (such as paternity pay, shared parental pay, or adoption pay).

SMP is computed by averaging your earnings over a span of at least 8 weeks, concluding with the last payday prior to the qualifying week.

For monthly-paid employees, the average is determined using the last two pay slips before the qualifying week. Add these two payslips together, divide by two, multiply by 12 for an annual figure, and then divide by 52 for the weekly average.
For weekly-paid employees, the calculation entails averaging the last eight pay slips preceding the qualifying week. Add up the total amount earned during this period and divide it by the number of weeks it represents (usually eight).

During the initial six weeks, SMP amounts to 90% of your regular earnings during the reference period. Over the subsequent 33 weeks, it equals 90% of your regular earnings or the flat rate, depending on which is lower.

This article provides a thorough understanding of maternity pay calculations, but it’s important to stay updated with the latest regulations and guidelines, as these may evolve over time. Always consult official sources, such as the UK government website or your employer’s HR department, for the most current information.

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