Continuing in our series of questions linked to Payroll, we look at maternity pay.

One of my nurses is pregnant and wants to know about maternity pay. What is maternity pay?

First, let’s look at what exactly Statutory Maternity Pay (SMP) is and whether she will be eligible.

SMP is a legal entitlement to a certain amount of pay to help a mother take time off around the time of birth. It lasts for up to 26 weeks.

• Employed by you in the qualifying week which is the 15th week before the week your baby is due.
• Employed by the same employer without a break for at least 26 weeks into the 15th week before the week your baby is due. Part weeks count as full weeks.
• Earning before tax an average of £84.00 a week. This is called the Lower Earnings Limit for National Insurance Contributions (NI) and is the amount your employee has to earn to qualify for benefits.

The earliest date that SMP can start is from the 11th week before the week your baby is due and the latest from the day following the birth.

If she continues to work after the 11th week before the week her baby is due she can choose when she wants her SMP to start. SMP will start from any day she chooses, once she has stopped work to have her baby. This means that her SMP should start from the first day of her maternity leave.

For the first 6 weeks, SMP will be 90% of her average weekly earnings with no upper limit.

For the remaining 33 weeks, she will get the standard rate (currently £108.85) or a rate equal to 90% of her average weekly earnings.

You will need to pay whichever is lower.

The amount you get back depends on your total gross, employers’ plus employees’, Class 1 National Insurance contributions in the appropriate tax year.

If your annual liability for Class 1 National Insurance contributions is £45,000 or less you are entitled to

• 100% of the SMP, and
• an additional amount as compensation for the NICs you pay on the SMP/SPP. The compensation rate for payments made on or after 6 April 2006 is 4.5%.

If your annual liability for Class 1 National Insurance contributions is more than £45,000 you are entitled to 92% of the SMP.

Use the money you have to pay over to HM Revenue & Customs consisting of PAYE tax and National Insurance contributions