Statutory Maternity Pay: How to Calculate SMP as a UK Employer

Getting Statutory Maternity Pay (SMP) calculations right is one of those payroll tasks that trips up even experienced employers. The rules around qualifying weeks, average weekly earnings, and HMRC recovery are specific and unforgiving. Get them wrong and you face penalties, employee disputes, or paying out more than you should.

This guide walks through every step of calculating SMP for the 2026/27 tax year. No jargon, no ambiguity, just the numbers and the process.

Last updated: April 2026 to reflect the latest rates effective from 6 April 2026.

How Much Is Statutory Maternity Pay in 2026/27?

SMP is paid for up to 39 weeks in two stages:

• Weeks 1 to 6: 90% of the employee's average weekly earnings (AWE), with no upper cap
• Weeks 7 to 39: The lower of £194.32 per week or 90% of AWE

The remaining 13 weeks of the 52-week maternity leave period are unpaid (unless your company offers enhanced maternity pay beyond the statutory minimum).

For context, an employee earning £30,000 a year (approximately £576.92 per week) would receive:

• Weeks 1 to 6: £519.23 per week (90% of £576.92)
• Weeks 7 to 39: £194.32 per week (the flat rate, since 90% of AWE exceeds it)
• Total SMP over 39 weeks: approximately £9,525.54

The flat rate of £194.32 is up from £187.18 in 2025/26. HMRC updates this figure each April.

Who Qualifies for SMP? The Eligibility Checklist

Before you calculate a penny, confirm the employee meets all four conditions:

1. Continuous employment

The employee must have at least 26 weeks' continuous service with you by the end of the qualifying week. The qualifying week is the 15th week before the expected week of childbirth (EWC).

In practice, count back 15 weeks from the Sunday of the week the baby is due. The employee must have been continuously employed by you for at least 26 weeks ending with that Saturday.

2. Still employed in the qualifying week

The employee must still be employed by you in the qualifying week, even if they are off sick or on holiday. If they resign or are dismissed before the qualifying week, they do not qualify for SMP from you (though they may claim Maternity Allowance from the DWP instead).

3. Earnings above the Lower Earnings Limit

The employee's average weekly earnings must be at least £129 per week (the Lower Earnings Limit for 2026/27). This is based on gross earnings before tax and NI.

4. Proper notice given

The employee must give you at least 28 days' notice of when they want SMP to start (or, if that is not reasonably practicable, as soon as is reasonably practicable). They must also provide medical evidence of the pregnancy, typically a MAT B1 form from their midwife or GP, which is available from 20 weeks before the due date.

If the employee does not meet these conditions, issue them a form SMP1 explaining why they do not qualify. They can then apply for Maternity Allowance through the DWP.

How to Calculate Average Weekly Earnings for SMP

This is where most employers make mistakes. The AWE calculation determines both eligibility (is it above £129?) and the amount payable in weeks 1 to 6.

Step 1: Identify the relevant period

The relevant period is at least 8 weeks (for monthly-paid employees, 2 months) ending with the last normal payday on or before the Saturday of the qualifying week.

For example, if the qualifying week ends on Saturday 8 November 2026 and the employee is paid monthly on the last working day of each month:

• Last payday on or before 8 November: 31 October 2026
• Count back 2 months: 1 September to 31 October 2026
• Use the gross earnings from the September and October payslips

Step 2: Add up gross earnings

Include all gross pay from those payslips: basic salary, overtime, bonuses, commission, and any other payments subject to Class 1 National Insurance contributions. Do not include benefits in kind, expenses, or statutory payments like SSP.

If the employee received a pay rise that takes effect from the start of the qualifying week or later (but before the end of the maternity pay period), you must recalculate AWE as if the higher rate had applied throughout the relevant period. This is the pay rise protection rule.

Step 3: Calculate the average

For monthly-paid employees: divide total gross earnings by the number of months, then multiply by 12 and divide by 52.

For weekly-paid employees: divide total gross earnings by the number of weeks in the relevant period.

Worked example (monthly paid):

• September gross pay: £2,800
• October gross pay: £2,800 (includes £200 overtime)
• Total: £5,600 over 2 months
• AWE: (£5,600 / 2) x 12 / 52 = £646.15 per week

This is above the £129 LEL, so the employee qualifies. Weeks 1 to 6 pay at 90% = £581.54 per week.

Step-by-Step SMP Calculation for Employers

Once eligibility is confirmed and AWE is calculated, here is the full process:

1. Determine the SMP start date

SMP can start from the 11th week before the EWC at the earliest. The employee chooses their start date, but SMP is automatically triggered if:

• The baby is born before the chosen start date (SMP starts the day after birth)
• The employee is off work for a pregnancy-related illness in the 4 weeks before the EWC (SMP starts the day after the first day of absence)

2. Calculate weeks 1 to 6

Multiply AWE by 90%. There is no cap on this amount. High earners will receive more.

Using our example: £646.15 x 90% = £581.54 per week for 6 weeks = £3,489.23

3. Calculate weeks 7 to 39

Take the lower of £194.32 or 90% of AWE.

Using our example: 90% of AWE = £581.54, which exceeds £194.32. So the flat rate applies.

£194.32 x 33 weeks = £6,412.56

4. Total SMP liability

£3,489.23 + £6,412.56 = £9,901.79

5. Deduct tax and NI

SMP is subject to income tax and employee National Insurance contributions in the normal way. Process it through your payroll system on the employee's usual pay dates.

How to Recover SMP from HMRC

You pay SMP to the employee through your payroll, then recover most of it from HMRC by reducing your monthly PAYE payments. You do not need to make a separate claim.

Standard recovery (most employers)

You can recover 92% of the SMP you paid. Using our example: 92% of £9,901.79 = £9,109.65 recovered, leaving a net cost to you of £792.14.

Small Employers' Relief

If your total Class 1 National Insurance liability in the previous tax year was £45,000 or less, you qualify for Small Employers' Relief. This lets you recover:

• 100% of the SMP paid, plus
• An additional 9% compensation (up from 8.5% in 2025/26)

That means small employers recover 109% of SMP, making it cost-neutral (and technically a small net gain). For a small employer paying £9,901.79 in SMP, the recovery would be £10,792.95.

Advance funding

If paying SMP upfront creates a cash flow problem (the employee's SMP exceeds your PAYE bill for that month), you can apply to HMRC for advance funding. Use form PF59 or contact the HMRC payment helpline. They will send you the difference before the next payday.

This is particularly useful for small businesses where a single maternity payment can exceed the entire monthly PAYE liability.

SMP and Enhanced Maternity Pay: What Employers Need to Know

Many employers offer enhanced maternity pay beyond SMP. This might be full pay for the first 12 weeks, or 50% pay for weeks 7 to 26, for example.

Key points:

• You can only recover the SMP element from HMRC, not any enhancement above it
• Enhanced maternity pay is a contractual benefit, so once offered (or established through custom and practice), it can be difficult to withdraw
• If you offset SMP against enhanced maternity pay (the most common approach), make sure your policy states this clearly. Something like: "You will receive full pay for 12 weeks, which includes SMP"
• Keep enhanced policies consistent to avoid discrimination claims. Any variation between employees needs objective justification

The Qualifying Week: How to Calculate It

The qualifying week causes more confusion than any other part of the SMP process. Here is how to work it out:

1. Find the expected week of childbirth (EWC). This runs Sunday to Saturday and is based on the due date on the MAT B1 certificate.
2. Count back 15 weeks from the Saturday of the EWC. The week you land on is the qualifying week.
3. The employee must have 26 weeks' continuous service by the Saturday that ends the qualifying week.

Example:

• Due date: 15 March 2027 (a Monday)
• EWC: 9 to 15 March 2027 (Sunday to Saturday)
• Count back 15 weeks from Saturday 15 March: qualifying week is 24 to 30 November 2026
• Employee must have started employment by 1 June 2026 or earlier (26 weeks before 30 November)

If the employee started after that date, issue them a form SMP1 and direct them to Maternity Allowance.

What Changed Under the Employment Rights Act 2025

The Employment Rights Act 2025 introduced several changes affecting maternity rights from April 2026:

• Day one rights for maternity leave: All employees now have the right to maternity leave from their first day of employment. Previously, maternity leave was available from day one but this is now reinforced as a statutory right under the ERA 2025 framework
• Enhanced redundancy protection: Employees on maternity leave (and for 18 months after returning) now have stronger protections against redundancy. If you are making redundancies, employees in this protected period must be offered suitable alternative vacancies ahead of other candidates
• SMP qualifying period unchanged: Despite other day one rights, the 26-week continuous employment requirement for SMP remains in place. An employee who starts on Monday and announces a pregnancy on Tuesday has the right to maternity leave but may not qualify for SMP. Direct them to Maternity Allowance instead
• Paternity and shared parental leave integration: Day one rights for paternity and shared parental leave mean families have more flexibility in how they split their leave, which may affect when the mother curtails her maternity pay

Common SMP Mistakes Employers Make

These are the errors that lead to HMRC penalties and employee disputes:

1. Using the wrong reference period for AWE. The relevant period must end on or before the qualifying week. Using recent payslips instead of the correct ones produces the wrong figure.

2. Forgetting the pay rise protection rule. If the employee gets a pay rise between the start of the relevant period and the end of maternity leave, you must recalculate AWE as if the higher rate applied throughout. Backdated increases count too.

3. Not issuing SMP1 when ineligible. If the employee does not qualify, you must give them a completed SMP1 form within 7 days of making the decision. This lets them claim Maternity Allowance from the DWP. Failing to issue it on time can result in penalties.

4. Confusing maternity leave with maternity pay. Leave runs for 52 weeks. Pay runs for 39 weeks. An employee can take the full 52 weeks of leave even if SMP ends at week 39.

5. Missing the HMRC recovery window. You can only offset SMP against your current tax year's PAYE payments. If you miss the window, you need to claim directly from HMRC, which takes longer.

6. Not adjusting for irregular earnings. Commission, overtime, and bonuses paid during the relevant period must be included in the AWE calculation. Stripping them out underestimates the employee's earnings and may result in underpayment.

Is Your Maternity Pay Process Compliant?

Calculating SMP correctly is one piece of the puzzle. Your maternity policies, record-keeping, and return-to-work processes all need to work together.

The EmployeeKit Employer Audit reviews your full maternity and family leave compliance for £49, covering SMP calculations, policy wording, contractual entitlements, and ERA 2025 readiness. Cheaper than getting it wrong.

Frequently Asked Questions

Q: Can an employee qualify for maternity leave but not SMP?

A: Yes, and this catches many employers off guard. Maternity leave is a day one right under the ERA 2025 (from April 2026). SMP still requires 26 weeks' continuous service and earnings above the Lower Earnings Limit of £129 per week. If the employee does not qualify for SMP, issue a form SMP1 so they can claim Maternity Allowance (£184.03 per week in 2026/27 or 90% of AWE, whichever is lower) from the DWP.

Q: Does SMP count towards pension contributions?

A: During the first 6 weeks (90% of AWE), employer pension contributions should be based on actual earnings. During weeks 7 to 39 (flat rate), contributions depend on your pension scheme rules. Under auto-enrolment, if SMP falls below the earnings trigger (£10,000 per year), you are not required to make contributions for that period, but many schemes continue contributions based on the employee's normal salary. Check your scheme rules and take advice if unsure.

Q: What happens if the employee is on a zero-hours contract?

A: The same rules apply, but the AWE calculation is more complex. You still use the 8-week reference period ending at the last payday before the qualifying week. If the employee worked variable hours, their AWE might fall below the £129 LEL, in which case they would not qualify for SMP. The new right to guaranteed hours from autumn 2026 may change this dynamic for regular zero-hours workers.

Q: Can I ask when an employee plans to return from maternity leave?

A: The default assumption is 52 weeks. The employee does not have to confirm a return date unless they want to come back early, in which case they must give at least 8 weeks' notice. You can ask informally, but you cannot pressure them or make return a condition of anything. If they do not return, they are still entitled to the full 39 weeks of SMP already accrued.

Q: How do I handle SMP if the employee has more than one job?

A: Each employer must assess SMP eligibility independently. An employee can receive SMP from multiple employers simultaneously if they meet the qualifying conditions with each. You only consider the earnings and service with your organisation, not their other employment.

Q: What is the deadline for an employee to notify me about their pregnancy?

A: The employee must tell you about the pregnancy by the end of the qualifying week (15 weeks before the EWC) or as soon as reasonably practicable after that. They must provide a MAT B1 certificate as medical evidence. If they miss this deadline, they do not automatically lose their SMP entitlement, but late notification can affect the SMP start date. In practice, most employees tell their employer well before this deadline.