When is the best time to have a baby?
As your friends and relatives will tell you: “There is no right time to have a baby”. But what if there was? Planning your conception date may sound a bit severe, but it could have some healthy financial benefits! Read on…
Statutory Maternity Leave
The basics are: eligible employees can take up to 52 weeks’ maternity leave. The first 26 weeks is known as ‘Ordinary Maternity Leave’, the last 26 weeks as ‘Additional Maternity Leave’.
The earliest that leave can be taken is 11 weeks before the expected week of childbirth, unless the baby is born early.
Employees must take at least 2 weeks after the birth (or 4 weeks if they’re a factory worker).
So what will you receive?
Statutory Maternity Pay (SMP)
SMP for eligible employees can be paid for up to 39 weeks, usually as follows:
- the first 6 weeks: 90% of their average weekly earnings (AWE) before tax
- the remaining 33 weeks: £139.58 or 90% of their AWE (whichever is lower)
- Tax and National Insurance need to be deducted.
Clauses that could make or break your SMP entitlement
- You have to be pregnant
We know that sounds ridiculous but your employer will need your MATB1 form 21 days prior to your SMP start date. Receiving this notification late could result in your employer delaying your SMP start date.
2. Don’t get pregnant in your first week of employment
You must have worked for your employer continuously for at least 26 weeks up to the ‘qualifying week’ – which is the 15th week before the expected week of childbirth. Therefore, you must have not been pregnant in your first week of employment.
You can calculate your qualifying period here >>
3. Keep your salary to the max
SMP is calculated on your average weekly earnings – normally 8 weeks prior to SMP start date. Taking unpaid leave, reducing to SSP or even attending jury service could affect your entitlement. If your average weekly wage during the qualifying period drops below £112 per week you will not be entitled to SMP from your employer.
- Plan your baby bonus
The first 6 weeks SMP is calculated at 90% of an employee’s average weekly earnings (AWE) before tax (during the qualifying period). So maximise your earnings during the qualifying period by receiving a bonus or increasing your hours and this could be a savvy financial move. Check your qualifying period here>>
- Your employer can refuse to give you SMP but not maternity leave
If you do not meet the eligibility for SMP from your employer, they can refuse to give you it. You may be entitled to Maternity Allowance (39 weeks) if one of the following applies:
- you’re employed, but you can’t get Statutory Maternity Pay
- you’re self-employed and pay Class 2 National Insurance (including Voluntary National Insurance) for at least 13 of the 66 weeks before your baby’s due – the amount of Maternity Allowance you get depends on how much Class 2 National Insurance you’ve paid
- you’ve recently stopped working
If you require more advice regarding SMP calculations or help with your payroll processing for expectant mothers and fathers do give us a call on 0117 9328145.
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