Is The Income From Statutory Maternity Leave Taxable?

Statutory Maternity Pay (SMP) is a legal minimum that employers must pay to employees when they become pregnant and decide to take maternity leave. SMP lasts up to 39 weeks, consisting of six weeks receiving 90 of your average weekly pay (before tax), and 33 weeks receiving either £184.03 or £156.66 per week. All employees have the right to 52 weeks of maternity leave, and most women can qualify for 39 weeks’ Statutory Maternity Pay or Maternity Allowance.

Meanwhile, SMP is taxable, as an employee receives deductions for tax and National Insurance on their SMP. If an employee earns at least £123 a week, their average wage is likely to be based on their maternity pay. For the 2023/24 tax year, employees will receive similar amounts to SMP – either £156.66 per week or 90 of their average weekly earnings (before tax), whichever is less.

SMP is paid in the same way as wages, such as monthly or weekly, and tax and National Insurance contributions are deducted. If an employee cannot get SMP, they may be eligible for a tax refund. State benefits that are taxable include Bereavement Allowance (previously Widow’s pension), Maternity benefit for people receiving an earnings-based benefit, Adoptive Benefit, and Health and Safety Benefit (including any increases for dependants). Payments of SMP count as earnings, and employees must deduct tax and National Insurance contributions (NIC) from them in the usual way.

Is 35 weeks too early to go on maternity leave?

Week 35 is a crucial period for many women, as they begin their maternity leave and prepare for the baby’s arrival. Some choose to work until the birth. Yellow stains in the bra indicate colostrum, an early milk rich in antibodies. Some pregnant women breastfeed weeks or months before birth to protect the baby from infections. Around 3 to 5 days after birth, milk arrives and breasts appear larger.

Is 30 weeks too early for maternity leave?

The Family and Medical Leave Act (FMLA) permits the commencement of maternity leave prior to the birth of the infant if a parent elects to utilize the leave for reasons such as prenatal appointments, severe morning sickness, bedrest, or other complications, given that each pregnancy, labor, and delivery is inherently distinctive.

How soon before your due date should you start maternity leave?

Maternity leave can be taken a week to a month before the expected birth, depending on discomfort or the desire for time to prepare. The FMLA requires employers to provide at least 30 days’ notice of unpaid family time. To make maternity leave the best possible for both you and your employer, consult with your human resources department, discuss your budget with your partner, start communication with human resources and those affected by your leave after completing your first trimester, and provide your boss with suggestions and strategies to address your duties while you are gone.

Some employers may be less friendly to pregnancy, so it’s important to consider the best time to share the news. Additionally, provide your boss with insights on your projects and co-workers to meet your responsibilities while on leave.

Does SMP count as earnings?

SMP is treated as earnings, allowing employers to deduct income tax and NI contributions, as well as deductions from pay like trade union subscriptions and pension contributions. If expecting multiple babies, the SMP will be the same as if expecting only one. Even if you don’t plan to return to work, you can still qualify for SMP, and your employer must pay it to you even if you leave employment.

Can I start maternity leave after my baby is born?

If one intends to continue working until the birth of one’s child, there is no need to make any alterations to one’s current situation. Should one desire to commence maternity leave at an earlier date, one may request such from one’s employer. In the event that one has a partner, the latter’s paternity leave commences at the time of the infant’s birth. In the event that the contract is due to expire during the period of maternity leave, the employer is not obliged to renew it.

How do I report maternity?

To receive statutory maternity pay, inform your employer of your pregnancy, confirm it with a doctor or midwife’s form or letter at least 15 weeks before your due date, and give your employer 28 days’ notice of when you want your maternity pay to start. This is the standard type of maternity pay, which comes from your employer. To get it, confirm your pregnancy with a form or letter from your doctor or midwife at least 15 weeks before your due date.

How many weeks pregnant should I go on maternity leave?

Maternity leave can be started any day from 11 weeks before the due date, with the start earlier if the baby comes early or if you work more hours than your employer. You have the right to take up to a year of leave, regardless of your employer’s tenure, pay, or work hours. Maternity leave is separate from maternity pay, with different rules for eligibility. You can check your entitlements and share your leave with your partner.

How many months pregnant can you start maternity leave?

The Act, originally allowing a 12-week maternity leave, was amended in 2017 to allow 26-week leave for all women. This leave can be taken 8 weeks before delivery and 18 weeks after delivery. For women with two children, the leave is only 12 weeks for the third and subsequent children. The amendment also grants 12 weeks of leave to women who legally adopt a child under three months of age and a commissioning mother, who uses her egg to create an embryo. This 12-week leave starts from the day the child is given to the commissioning or adoptive mother.

How to report pregnancy on universal credit?

Pregnant women are required to receive their Maternity Certificate (MAT B1 form) from their midwife at 20 weeks, which should be reported on their journal. If not working, they are expected to continue job searching until 29 weeks pregnant, unless it risks their health or the baby’s. To find help from grant-giving charities, use the Turn2us Grants Search. Turn2us cannot provide individual advice, so users can find an adviser in their area to discuss their situation.

Does maternity pay affect Universal Credit?

The Universal Credit Regulations of 2013 categorize maternity benefits as “unearned income,” which is subsequently deducted from the Universal Credit disbursements. Conversely, statutory maternity pay is regarded as “earnings,” and is partially disregarded due to the work allowance.

What happens to maternity leave if baby comes early?

Maternity leave and pay cannot be extended if a baby is born prematurely. However, alternative options for taking more time off work include sick leave, annual leave, unpaid leave, or Parental Leave. If you are not well enough to return to work after maternity leave, you are entitled to take sick leave, following your employer’s normal reporting procedures. If your employer provides contractual sick pay, you are entitled to it in the usual way. Statutory Sick Pay (SSP) may not qualify if you return to work after unpaid leave, and your sickness period must begin after maternity leave ends.