PART 4: STATUTORY PAYMENTS
percentage, currently 3% to compensate the employer for any additional employers NICs paid.
Payment of Statutory Maternity Pay Payment will normally be at the time that earnings are paid for the same period. SMP is treated as earnings and is subject to PAYE. Other lawful deductions applicable to pay may be applied to SMP e.g. pension contributions, but not any type of Attachment of Earnings. An employer may treat an employee’s wages or any occupational maternity or sickness payments as payments towards SMP if payment of: • wages continues for any week in which SMP is due, or • occupational maternity or sick pay is due for the same week as SMP. COPYRIGHT © 2021 THE CHARTERED INSTITUTE OF PAYROLL PROFESSIONALS Some employer’s conditions of service, particularly in the public sector, may provide for payment of SMP in addition to contractual maternity pay, subject to the gross payment not being in excess of normal full pay. Employees who do not qualify for SMP from their employer may be entitled to Maternity Allowance, payable by the Department of Work and Pensions (DWP). Employees who are not entitled to SMP must be issued with a completed form SMP1 by their employer. Any maternity certificate provided (usually the MAT B1) must be returned. Daily Rates From April 2007 employers may align payment of SMP with their normal payment cycle, in order to enable this to take place calculations may be made using daily rates. The daily rate for 2020/21 is £21.71. The correct method of alignment is to pay full weeks for the number of SMP weeks she is entitled to and to adjust the part weeks accordingly at each end of the month. This can be a complex calculation and for this reason many employers keep to the standard payment based on the number of SMP weeks start days in the month. Rates at the start of a tax year The 2004/5 tax year saw a change to the way new rates ‘kicked in’ as a result of the new statutory payments regime that came into force in April 2003. There are now several scenarios where a statutory payment week can straddle the old and new tax years, this relates to: • a week of Statutory Paternity Pay (for ‘fathers’ or adoptive partners) • a week of Statutory Adoption Pay • a week of SMP as a result of an early birth or pregnancy related illness. Multiple employment An employee who satisfies the qualifying rules with more than one employer can receive SMP from each, and choose a different Maternity Pay Period with each. Where an employee works under two distinct contracts with the same employer, and National Insurance Contributions are paid separately for each contract, SMP liability may arise separately under each contract. Where earnings from each employment are aggregated for NICs, there is only one SMP liability. No printing, copying or reproduction permitted.
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