Statutory Maternity Pay Guide for Employers (2012-2013)

Statutory Maternity Pay Guide for Employers (2012-2013)

Your employee has more than one job with you

If all the employee’s earnings have to be added together to work out Class 1 NICs they have to be added together to work out the employee’s AWE, and the employee can only get one lot of SMP.

If Class 1 NICs are worked out separately on the employee’s earnings, then you must work out their AWE separately, and the employee can get more than one lot of SMP. For more information on how to work out Class 1 NICs for employees with more than one job see the booklet CWG2 (2012) Employer Further Guide to PAYE and NICs.

Overpayment/underpayment of earnings made during the relevant period

Where an overpayment or underpayment of wages was made within the relevant period, it is this overpaid or underpaid amount that must be included in the AWE calculation for deciding if SMP is due. For more information see How to Recalculate your employee’s AWE to find out about pay rises.

Salary sacrifice

If an employee has entered into a salary sacrifice with you their AWE is calculated using the amount of earnings actually paid to them during the relevant period. SMP cannot be sacrificed, it must be paid in full. For more information on the rules for salary sacrifice see www.hmrc.gov.uk/specialist/salary_sacrifice.htm

Contractual benefits

For the purposes of calculating AWE for SMP the calculation is based on earnings which are subject to NICs. More information is available on the treatment of childcare vouchers and other contractual benefits and expenses, go to www.hmrc.gov.uk/paye/reporting-az.htm

Some schemes for childcare support provided by you and made available to your employees may be exempt from PAYE tax and Class 1 NICs.

The value of the childcare vouchers provided during the Maternity Pay Period may not be deducted from the SMP.

Where an employee agrees to accept childcare vouchers as part of a salary sacrifice their SMP entitlement will be assessed on their gross earnings on which NICs are payable.

Employee does not qualify and some of their earnings are included in a PAYE Settlement Agreement

If your employee has AWE of less than:

  • £102.00 for babies due between 17 July 2011 and 14 July 2012, or
  • £107.00 for babies due between 15 July 2012 and 13 July 2013

and they received any expense payments or benefits in kind in the relevant period, which were included in a PAYE Settlement Agreement, you must recalculate their AWE.

For more information on PAYE Settlement Agreements and whether something is liable for Class 1 NICs, see the CWG2 (2012) Employer Further Guide to PAYE and NICs.

Some of the employee’s earnings are included in a PAYE Settlement Agreement and SMP is recalculated to take account of a backdated pay rise

If you had to recalculate your employee’s earnings because they did not qualify and:

  • some of their earnings were included in a PAYE Settlement Agreement, and
  • they then get a backdated pay rise that is effective during or before the start of the relevant period which you had not included in the original calculation

you must recalculate their AWE as shown below. If they do not intend to return to work after the birth they may still be entitled to benefit from the pay rise.

You should check the terms of their old contract of employment with you.

You take over a business in the relevant earnings period

If you:

  • take over a business between the dates in 4 and 3 (inclusive) of the Checksheet for monthly paid, and
  • have worked out that the employee has been employed by you and the previous employer long enough to get SMP, see You take over a business. You must still add together all her earnings in between the dates in 4 and 3 (inclusive) even where some of them were paid by the previous employer.
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