Statutory Maternity Pay explained for employers

Statutory Maternity Pay runs for up to 39 weeks and follows a two-tier structure: 90% of average weekly earnings for the first 6 weeks, then £194.32 a week (or 90% of earnings if lower) for the following 33 weeks ^[1]. Most employers recover 92% of what they pay, and smaller employers recover 109% ^[2].

Every UK employer with a pregnant employee has to operate SMP correctly, because the payment flows through payroll, attracts PAYE and National Insurance, and is reclaimed from HMRC rather than absorbed in full. Getting the eligibility test, the average-earnings calculation or the recovery rate wrong is a common and costly error for owner-managed businesses.

This article sets out who qualifies for SMP, how the 90% then flat-rate structure works in practice, the earnings test an employer must apply, how SMP is reported through Real Time Information, and exactly what proportion an employer can claim back. It also explains where Maternity Allowance fits for employees who do not qualify.

Key takeaways

• SMP is paid for up to 39 weeks: 6 weeks at 90% of average weekly earnings, then 33 weeks at the lower of £194.32 or 90% of earnings.
• To qualify, an employee needs 26 weeks of continuous service by the qualifying week and average weekly earnings at or above the Lower Earnings Limit of £129.
• Employers recover 92% of SMP, or 109% under Small Employers' Relief if Class 1 National Insurance for the previous tax year was £45,000 or lower.
• SMP is subject to PAYE and Class 1 National Insurance and must be reported in the Full Payment Submission.
• Employees who do not qualify for SMP may claim Maternity Allowance from the Department for Work and Pensions instead.

How Statutory Maternity Pay is structured

SMP is not a single flat payment. It is split into two phases across a maximum of 39 weeks, and the leave period itself can run longer than the pay. Maternity leave lasts up to 52 weeks (26 weeks of Ordinary Maternity Leave followed by 26 weeks of Additional Maternity Leave), so the final 13 weeks of leave are typically unpaid by statute ^[3].

The pay structure splits into a higher first phase and a flat-rate second phase. The table below shows how the two phases compare.

The first 6 weeks are always 90% of earnings with no upper limit, so a higher earner receives more in this phase ^[4]. From week 7, the payment is capped at the flat statutory rate of £194.32 for the 2026-27 tax year, unless 90% of the employee's average weekly earnings is lower than that figure, in which case the lower amount applies ^[5].

Employers running this in-house need to track the phase transition precisely, because the drop from 90% to the flat rate happens automatically after the sixth week. Most modern UK payroll software applies the two-tier rate without manual reconfiguration, which removes a frequent source of underpayment or overpayment.

How SMP compares with other statutory parental pay

SMP is one of several statutory parental payments, and the second-phase rate is shared across the family. The flat weekly rate of £194.32 applies identically to maternity, paternity, adoption, shared parental, parental bereavement and neonatal care pay for the 2026-27 tax year ^[6]. What sets SMP and Statutory Adoption Pay apart is the initial 6-week phase at 90% of earnings, which the other payments do not carry ^[7].

The table below sets out how the statutory family payments line up.

This shared structure means a payroll team that handles SMP correctly already understands most of the mechanics for the wider statutory family suite.

Who qualifies for Statutory Maternity Pay

SMP is available only to employees, not to self-employed contractors or workers without employee status. To qualify, an employee must have been continuously employed for at least 26 weeks up to and including the qualifying week, which is the 15th week before the expected week of childbirth ^[8]. They must also still be pregnant 11 weeks before the expected week of childbirth and provide proof of pregnancy.

The second test is an earnings test. The employee's average weekly earnings must be at or above the Lower Earnings Limit, which is £129 a week for the 2026-27 tax year ^[9]. Average weekly earnings are calculated over the 8 weeks (or two months) up to and including the last payday before the end of the qualifying week ^[10].

The qualifying conditions are summarised below.

An employee who passes both the service test and the earnings test qualifies regardless of whether they intend to return to work after leave ^[11]. Employers running multi-client payroll often rely on a payroll bureau platform that flags eligibility per scheme so the qualifying week and the earnings test are not missed across a portfolio.

What an employer must do once notice is given

The employee must give notice at least 15 weeks before the expected week of childbirth, stating the due date and the intended leave start date, and supply a MATB1 certificate as proof of pregnancy ^[12]. The MATB1 is issued by a midwife or doctor from around 20 weeks into the pregnancy.

Once notice is received, the employer must confirm the leave start and end dates in writing within 28 days ^[13]. The employer continues to accrue the employee's holiday entitlement and maintain pension contributions throughout the leave, because the contract of employment remains live. A small business taking on this responsibility for the first time can produce a compliant payslip for each SMP week through an instant payslip generator without setting up a full scheme.

How employers recover SMP from HMRC

Unlike Statutory Sick Pay, which employers absorb in full, the cost of SMP is largely reclaimed from HMRC. The recovery is processed through the Employer Payment Summary, the monthly Real Time Information submission that reports amounts an employer can reclaim or offset against its PAYE bill ^[14].

The recovery rate depends on the size of the employer, measured by its National Insurance bill. The threshold and the two rates are set out below.

A larger employer recovers 92% of the SMP it pays, leaving 8% as a net cost ^[15]. A smaller employer, defined as one whose total Class 1 National Insurance for the previous tax year was £45,000 or lower, recovers 109%: the full 100% of the SMP plus an extra 9% compensation to offset the employer National Insurance paid on the statutory amount ^[16]. The compensation element rose to 9% on 6 April 2026.

This makes SMP unusual among employer costs: a small employer paying SMP can finish marginally ahead of the gross amount paid. Software that holds the HMRC Recognised badge calculates the recovery automatically and reflects it on the Employer Payment Summary, so the employer does not have to reconcile the figure by hand. Accountants handling this across a portfolio typically use multi-client payroll dashboard tooling that applies the correct rate per employer based on each client's prior-year National Insurance.

How SMP is reported through Real Time Information

SMP is treated as earnings, not as a separate benefit. It is included in the employee's gross pay in the Full Payment Submission and is subject to both PAYE income tax and Class 1 National Insurance in the normal way ^[17]. The employer deducts tax and National Insurance from the SMP as it would from ordinary wages.

The recovery, by contrast, is claimed separately on the Employer Payment Summary rather than the Full Payment Submission ^[18]. The two submissions work together: the Full Payment Submission reports what the employee was paid, and the Employer Payment Summary reports what the employer reclaims. An HMRC-recognised payroll engine submits both automatically at the end of each payrun, which keeps the gross pay and the recovery in step. Platforms embedding UK payroll into their own product can call an HMRC-recognised payroll API to handle both submissions without building Real Time Information logic from scratch.

Where Maternity Allowance fits

Not every pregnant employee qualifies for SMP. An employee who fails the 26-week service test, or whose average weekly earnings fall below the £129 Lower Earnings Limit, cannot receive SMP from the employer. The same applies to self-employed people, who have no employer to pay SMP at all ^[19].

For these cases, Maternity Allowance is the alternative. It is paid by the Department for Work and Pensions rather than the employer, and it runs for up to 39 weeks at up to £194.32 a week, the same flat rate as the second phase of SMP ^[20]. The amount depends on the claimant's recent employment and National Insurance record, and a self-employed claimant can receive between £27 and £194.32 a week depending on their Class 2 National Insurance contributions ^[21].

The practical point for employers is that Maternity Allowance is not their responsibility. When an employee does not qualify for SMP, the employer issues form SMP1 to explain why, and the employee then claims Maternity Allowance directly ^[22]. For owner-managed businesses checking whether their first pregnant employee qualifies, the dividing line is the service-and-earnings test, and a clear understanding of that line avoids both underpayment and an unnecessary scheme set-up. Small employers comparing options often start with payroll for SMEs to see how statutory pay is handled before the first claim arises.

Conclusion

Statutory Maternity Pay sits at the intersection of employment law and payroll mechanics. The two-tier structure, 90% for 6 weeks then a flat £194.32 for up to 33 weeks more, is straightforward once the eligibility and average-earnings tests are applied correctly, and the recovery from HMRC means most of the cost does not fall on the employer. For a small employer, the 109% Small Employers' Relief rate can even leave the business marginally ahead of the gross amount paid.

The wider direction of travel is towards more automation in this area. As statutory parental pay continues to share a common flat rate and a common recovery mechanism, the value increasingly lies in payroll that applies the right rate, the right recovery and the right Real Time Information submission on every payrun, leaving the employer free to focus on supporting the employee rather than reconciling the numbers.

Frequently asked questions

How long is Statutory Maternity Pay paid for?

SMP is paid for up to 39 weeks. The first 6 weeks are paid at 90% of average weekly earnings with no cap, and the following 33 weeks are paid at the lower of £194.32 or 90% of earnings for the 2026-27 tax year. Maternity leave itself can run for up to 52 weeks, so the final period of leave is usually unpaid by statute.

Can an employer claim back all the Statutory Maternity Pay it pays?

Most employers recover 92% of the SMP they pay from HMRC through the Employer Payment Summary. An employer whose total Class 1 National Insurance for the previous tax year was £45,000 or lower qualifies for Small Employers' Relief and recovers 109%, which is the full amount plus 9% compensation. Statutory Sick Pay, by contrast, cannot be recovered at all.

What happens if an employee does not qualify for Statutory Maternity Pay?

An employee who does not meet the 26-week service test or whose average weekly earnings are below the £129 Lower Earnings Limit cannot receive SMP. In that case the employer issues form SMP1 explaining why, and the employee can claim Maternity Allowance from the Department for Work and Pensions instead. Maternity Allowance pays up to £194.32 a week for up to 39 weeks, depending on the claimant's earnings and National Insurance record.

Is Statutory Maternity Pay taxed?

Yes. SMP is treated as normal earnings and is subject to both PAYE income tax and Class 1 National Insurance. It is reported in the employee's gross pay in the Full Payment Submission, and tax and National Insurance are deducted in the usual way. The recovery the employer claims is reported separately on the Employer Payment Summary.