In the UK, there are six different types of leave available for parents: maternity leave, adoption leave, paternity leave, ordinary parental leave, shared parental leave and parental bereavement leave depending on their circumstances.
To support you in meeting your responsibilities as an employer, we will be looking at maternity leave and what you need to provide for staff.
Maternity leave allows employers to take time off work both during their pregnancy and following the birth of their child to recover and adapt to being a new parent.
Employers must ensure that they comply with their legal obligations and look to reclaim any Statutory Maternity Payments that they make.
There are also new redundancy protections for pregnant and new parents, which came into force on 5 April 2024 and, therefore, employers should seek advice if they are making redundancies.
What are employees entitled to?
All pregnant employees are entitled to take 26 weeks’ ordinary maternity leave followed immediately by 26 weeks’ additional maternity leave, which provides a total entitlement of 52 weeks.
Unless the baby is born early, maternity leave can start from the Sunday at the beginning of the 11th week before the expected week of childbirth.
Employees must take at least two weeks off after the birth, or four weeks if they work in a factory.
Pregnancy and maternity is a protected characteristic under the Equality Act 2010 (s.4). An employee with this characteristic is protected against discrimination during the protected period. This means that pregnant employees or those on maternity leave cannot be treated unfavourably.
How much should staff be paid?
Eligible employees are entitled to 39 weeks Statutory Maternity Pay (SMP). To qualify for SMP:
- they must have been continuously employed for at least 26 weeks at the end of their qualifying week1.
- they are still pregnant 11 weeks before the start of your expected week of childbirth (EWC)2 (or have already given birth);
- they have provided you with a MAT B1 form confirming their expected week of childbirth.
- they have stopped working; and
- their average weekly earnings are not less than the lower earnings limit for national insurance contributions (currently £123 per week for 2024-25) in the 8 weeks (or two months) before their qualifying week.
1 qualifying week is the 15th week before the employees expected week of childbirth. These always begin on a Sunday and end on a Saturday.
2 Expected Week of Childbirth (EWC) begins on the Sunday before their due date and ends on the Saturday after their due date. If their due date is on a Sunday the EWC begins on the same day.
SMP can be paid for up to 39 weeks, paid at the rate of:
- First six weeks: 90% of their average weekly earnings (AWE) before tax
- 33 weeks: at the rate set by the Government for the relevant tax year(currently £184.03 for 2024-25) or 90% of their AWE (whichever is lower) for the remaining 33 weeks Statutory maternity pay is treated as earnings and is therefore subject to PAYE and national insurance deductions.
You can usually reclaim 92% of your payments even if you pay over the statutory amount. Employers who qualify for Small Employers’ Relief (that have paid £45,000 or less in Class 1 National Insurance – ignoring any reductions like Employment Allowance) can reclaim 103%. You get this if you paid £45,000 or less in Class 1 NI in the last complete tax year.
Some employers choose to pay enhanced maternity pay which is more generous than SMP but this is at the discretion of each individual employer.
Pay increases: If the employee becomes eligible for a pay rise between the start of the original calculation period and the end of their maternity leave, their statutory maternity pay will need to be recalculated to take account of their pay rise, regardless of whether statutory maternity pay has already been paid. This means that their statutory maternity pay will be recalculated and increased retrospectively, or that employees who were not entitled to SMP at the outset, may qualify for statutory maternity pay if they did not previously. In these circumstances, they should be paid a lump sum to make up any difference between statutory maternity pay already paid and the amount payable as a result of the pay rise.
Keeping correct records
To ensure compliance with HM Revenue & Customs (HMRC), you must keep records of maternity leave taken by staff.
This includes:
- Proof of pregnancy
- The date SMP began
- Your SMP payments and dates
- The SMP you have reclaimed
- Any weeks you did not pay and why
These records must be kept for 3 years following the end of the tax year they relate to. Doing this ensures tax compliance as well as legal compliance.
Employees who are not eligible
If your employee does not meet the eligibility requirements for SMP, they may qualify for Maternity Allowance from the government .
The employer should provide the employee with an SMP1 form so that they are able to pursue a claim for maternity allowance. Employers should provide the form explaining why the employee is not eligible within 7 days of making their decision.
If you are unsure whether your employee is entitled to maternity leave and SMP, it may be helpful to seek the advice of an employment law expert.
If you would like more advice on providing parental leave for your staff and the payroll implications of doing this, get in touch with our team today.