Maternity Pay Calculator

Understanding Statutory Maternity Pay (SMP)

Statutory Maternity Pay is a fundamental employment right in the UK, providing financial support during maternity leave for eligible employees. SMP is paid for up to 39 weeks and consists of two distinct periods: the first six weeks at 90% of average weekly earnings, followed by 33 weeks at the standard rate (£184.03 for 2025-26) or 90% of weekly earnings if lower. Understanding these calculations is crucial for financial planning during pregnancy and early parenthood.

SMP Calculation Period and Rates

Your average weekly earnings for SMP purposes are calculated using the 8-week period ending with the last payday before the end of the 15th week before your expected due date (known as the qualifying week). This calculation includes overtime, commission, and bonuses paid during this period, ensuring the SMP rate reflects your actual earnings pattern rather than just basic salary.

Maternity Leave and Pay Entitlements

All employees are entitled to 52 weeks of maternity leave regardless of length of service or earnings. However, SMP eligibility requires specific criteria: earning at least £123 per week on average, continuous employment for at least 26 weeks by the qualifying week, and still being employed during the qualifying week. Understanding these distinctions helps clarify the difference between leave entitlement and pay entitlement.

The earliest you can start maternity leave is 11 weeks before your due date, though you can work right up until your due date if you choose. If you give birth before your intended start date, maternity leave automatically begins on the day after birth. This flexibility allows you to maximize your time at full pay while ensuring you have adequate time off after birth.

Enhanced Maternity Pay Schemes

Understanding Enhanced Schemes

Many employers offer enhanced maternity pay that exceeds statutory minimums, recognizing the value of supporting employees through major life transitions. Enhanced schemes typically provide full or partial salary for extended periods, significantly improving financial security during maternity leave. These schemes are contractual benefits that often require you to return to work for a specified period or repay enhanced payments if you resign.

Statutory Sick Pay (SSP) Entitlements

SSP Rates and Duration

Statutory Sick Pay provides basic income protection for employees unable to work due to illness. For 2025-26, SSP is £116.75 per week, paid from the fourth consecutive day of illness for up to 28 weeks. This represents significantly less than most salaries, highlighting the importance of enhanced sick pay schemes or personal income protection insurance for comprehensive financial security.

SSP eligibility requires average weekly earnings of at least £123, making it accessible to most part-time and full-time employees. However, the low payment rate means SSP alone is insufficient for most households to maintain their standard of living during extended illness periods. Understanding your employer's enhanced sick pay policy is crucial for financial planning and risk management.

Enhanced Sick Pay Arrangements

Enhanced sick pay schemes vary significantly between employers, with some offering full salary for several months while others provide graduated reductions over time. Common arrangements include full pay for the first 1-3 months of illness, followed by half pay for an additional period, then SSP only. Understanding your specific entitlements helps inform decisions about additional income protection insurance needs.

Financial Planning for Family Leave

Budgeting for Reduced Income

Planning for maternity leave requires careful budgeting to manage the significant reduction in household income. Even with enhanced schemes, take-home pay typically drops by 30-50% during extended leave periods. Start budgeting early in pregnancy to build savings, reduce discretionary spending, and ensure essential expenses remain manageable on reduced income.

Consider the additional costs associated with having a baby, including equipment, childcare for return to work, and increased household expenses. These costs can offset some of the income reduction benefits, making comprehensive financial planning essential. Many parents find that creating separate budgets for pre-birth, maternity leave, and return-to-work periods helps manage the transition effectively.

Tax and Benefit Considerations

Maternity and sick pay have specific tax implications that affect net income calculations. Both SMP and enhanced maternity pay are subject to income tax, National Insurance, and student loan deductions. However, reduced annual income during leave periods may result in lower effective tax rates and potential refunds if overpaid tax is not automatically adjusted.

Shared Parental Leave and Pay

Understanding Shared Parental Leave

Shared Parental Leave allows eligible parents to share up to 50 weeks of leave and 37 weeks of pay between them, providing flexibility for modern families to balance career and childcare responsibilities. This system recognizes that different families have different needs and allows parents to optimize their arrangement based on career priorities, financial considerations, and personal preferences.

To be eligible for Shared Parental Leave, both parents must meet specific employment and earnings criteria, and the arrangements must be agreed with both employers. The complexity of these arrangements requires careful planning and clear communication with employers, but the flexibility can provide significant benefits for families who can access enhanced pay schemes through multiple employers.