How is maternity pay calculated?

Make sure you know how maternity pay is calculated well in advance of going on maternity leave, especially now the rate has gone up

A couple holding and smiling at their baby

If you’re due to start maternity leave in the coming months, it’s vital to understand how maternity pay is calculated and how much you will get. 

Knowing how much maternity pay you'll receive can help ensure you budget properly while you’re off work. This is particularly important at a time when finances may be tight.

Community manager at childminder agency tiney, Lisa Holmes, told us: “Having certainty about your income during this time can help new parents to budget more effectively, plan ahead, and make decisions about timings like when to head back to work – especially with childcare costs increasingly disrupting the return of mothers to the workforce. Familiarity with maternity pay entitlement will also make sure you’re fully informed of the process for claiming it.”  

It's also worthwhile checking whether you are eligible for the Sure Start Maternity Grant, which can give you money to put towards all the essentials you need to buy as an expectant parent. The Healthy Start Scheme should also be considered as it can provide money for healthy food and milk, as well as free vitamins for pregnancies or infant children.

How is maternity pay calculated?

Your maternity pay will be calculated and paid by your employer, but it’s a good idea to understand how those calculations work. This way you know what to expect and can spot any mistakes once payments start.

For the first six weeks, statutory maternity pay (SMP) is paid at a rate of 90% of your average weekly earnings. And this is where it can get a bit fiddly. Your average weekly pay is based on the amount you have been paid over the eight weeks (often known as the ‘reference period’ or ‘relevant period’) leading up to the end of your ‘qualifying week’. This is the 15th week before you are expected to give birth – so basically when you’re 25 weeks pregnant. 

The calculation is reasonably straightforward if you’re paid weekly. You'll need to dig out your payslips. Add up your gross weekly earnings (before tax is deducted) in the eight weeks before the end of your qualifying week. Then divide the total by eight.

If, on the other hand, you’re paid monthly, the calculation is slightly different. You need to take your last two payslips and add your pre-tax earnings together. Then divide that figure by two. This will give you an average of your gross earnings. Multiply that figure by 12 to get your annual earnings. Then divide it by 52. This is your weekly gross earnings.

After the first six weeks, your rate of SMP drops to the lower of £184.03 or 90% of your average weekly earnings each week. This is paid for a further 33 weeks, after which point payments stop. 

This means that a woman earning £250 a week before tax (£1,000 a month or £12,000 a year approximately) would get £225 a week for the first six weeks of her maternity leave. This comes to a total of £1,350. This would be followed by 33 weeks of £184.03 a week, for a total of £6,072.99. That works out as £7,422.99 over the course of maternity leave.

If a woman earned £750 a week before tax (£3,000 a month or £36,000 a year) she’d get six weeks of £675, a total of £4,050. This would be followed by 33 weeks at £184.03, which would work out at £6,072.99. This works out as £10,122.99 over the course of maternity leave.

However, not every woman will be eligible for SMP. Childcare expert Lisa Holmes says: “You can claim SMP if you earn an average of at least £123 a week, supply proof of your pregnancy (e.g. a letter from your doctor), inform your employer within the appropriate time frame, and have worked for your employer continuously for at least 26 weeks continuing into the ‘qualifying week’.”

Also, bear in mind that how much SMP you get is set by the government. But like other forms of statutory pay, it is generally increased each year to reflect the rising cost of living.

New rates come into force in April each year – and as of April 2024, the weekly rate of SMP rose from £172.48 to £184.03. If you happen to be receiving SMP at this time you will start getting the new rate straightaway.

It’s also worth noting that a pay rise can affect the amount you receive. Professional support lawyer at Birketts, Liz Stevens, explains: “If a pay rise is awarded after the start of the 8 week reference period and before the end of the statutory maternity leave period, the employee’s weekly earnings for SMP purposes must be recalculated for the full period of the SMP entitlement. This means that the employee will be entitled to receive a backdated sum to reflect the pay rise.”

What if you aren't eligible for Statutory Maternity Pay?

All is not lost if you aren't eligible for statutory maternity pay, as money expert at ABC Finance, Gary Hemming explains: “If you’re ineligible for SMP, you can instead claim Maternity Allowance, which is paid for up to 39 weeks, starting from 11 weeks before the baby is born. 

“The amount you get will depend on your income, with a maximum potential payment of £184.03 per week, if this is more than 90% of your average weekly income. If not, you’ll get 90% of your average weekly earnings.”

To get Maternity Allowance you need to have worked for 26 weeks (the equivalent of around six months) during the 66 weeks running up to your due date. This is known as the ‘test period’. You also need to have earned at least £30 a week in at least 13 of those weeks.

The calculation is more complicated if you’re self-employed, with the rate you get depending on your National Insurance contributions (NICs). You’ll be eligible for the full £184.03 if you’ve paid 13 weeks of Class 2 NICs, if not you’ll get less.

What if you can get an enhanced maternity package?

If you’re lucky and get an enhanced maternity package from your employer, you’ll have to check with HR to find out how your maternity pay is calculated.

Antonio Fletcher, head of employment at law firm Whitehead Monckton, says: “Some employers may offer enhanced maternity pay, also known as company maternity pay, which is maternity pay that exceeds entitlement under SMP. Employees will need to check their employment contracts and any staff policies relating to maternity pay to see if their company offers this benefit, and if so, establish what entitlement if any, they are eligible for.” 

Maternity pay is based on your salary

Both SMP and any enhanced maternity pay you get from your employer will be based on your salary. Maternity Allowance is either paid at a flat rate or based on your salary, depending on how much you earn and whether you’re self-employed.

If you’re only getting SMP, that will be paid as 90% of your average weekly earnings for the first six weeks, but drops to the lower of 90% of your weekly earnings or £184.03. If your employer offers an enhanced package, that will likely be calculated as a proportion of your salary. This may be, for example, full or half pay.

Your employer will pay your maternity pay during your period of maternity leave. You’ll receive it in the same way as you get your normal pay. However, your employer can reclaim statutory maternity pay from the government via HMRC. If it’s suffering from cash flow problems, it can apply for advance funding.

If you claim Maternity Allowance, that is paid by the government. Any employers that offer enhanced maternity pay will have to cover the cost themselves.

Why is maternity pay different each month?

There are multiple reasons your pay may differ each month. Differing rates throughout your maternity leave will lead to fluctuations. Even when you’re expecting the pay rate to be the same for a period of months, you may notice that there are some small variations between payslips. This might be because maternity pay is often calculated on a weekly basis and you are paid monthly.

Let’s say your maternity leave started on a Wednesday. You might find there are four Wednesdays in some months and five in others, which would make a small difference to the pay that you receive. If you’re left feeling confused, it’s worth asking HR to help you work out exactly how much you’ll get each month. 

Lisa Holmes of childminder agency tiney adds: “If your employer offers their own enhanced maternity pay, remember this may be subject to change over the course of your maternity leave e.g. you may receive enhanced pay for the first part of your leave which may then be reduced to the statutory amount after a certain amount of time. Make sure you know exactly when and by how much your pay will change over the course of the 39 weeks so you don’t face any unpleasant surprises.

“Employers should provide a payment schedule showing all weekly payments so that those receiving maternity pay can easily monitor their expected income.”

How much maternity pay will I get if I work part-time?

Whether or not you get maternity pay will usually come down to your earnings and how long you’ve been in the job. How many hours you work shouldn’t come into it.

Childcare expert Lisa Holmes says: “As long as you meet the qualifying criteria previously mentioned, your eligibility for SMP won’t be affected by the number of hours you work.”

In other words, you’ll be eligible for Statutory Maternity Pay as long as you have worked for your employer continuously for at least 26 weeks up to the qualifying week and earn an average of at least £123 a week. 

If you get enhanced maternity pay, your employer might specify that you need to have been working for the company for a certain period of time. But again, whether you work full or part time hours shouldn’t affect your eligibility for maternity pay.

If you are taking time out of work to raise a family, make sure you are aware of how the motherhood penalty could impact you in later life.

Rachel Wait, personal finance expert
Rachel Wait

Rachel is a freelance personal finance journalist who has been writing about everything from mortgages to maternity pay for over a decade. Rachel has written for numerous websites and national newspapers, including The Mail on Sunday, The Observer, The Sun and Forbes. She is passionate about helping consumers become more confident with their finances, giving them the tools they need to take control of their money and make savings.

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Personal finance expert

As well as being a mum, Rachel Lacey is a freelance journalist with more than 20 years' experience writing about all areas of personal finance and retirement planning. After 17 years at Moneywise magazine as both writer and editor, Rachel now writes for a variety of websites and newspapers as well as corporate clients. She is passionate about financial education and simplifying money matters for all.

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