Planning for a baby involves a lot of financial unknowns. One of the biggest: how much will you actually take home during maternity or paternity leave? Statutory pay is taxable — but your overall bill for the year will likely be lower because you earn less. This guide explains how it works.
Statutory Maternity Pay (SMP) rates
- First 6 weeks: 90% of your average weekly earnings (no cap)
- Remaining 33 weeks: £184.03/week or 90% of earnings — whichever is lower
Total SMP period: 39 weeks. The final 13 weeks of the 52-week maternity leave entitlement are unpaid.
Statutory Paternity Pay (SPP)
SPP is £184.03/week (or 90% of average earnings if lower) for up to 2 weeks. Enhanced company schemes may offer more.
Is maternity/paternity pay taxed?
Yes — SMP and SPP are taxable income. Your employer deducts income tax and National Insurance through PAYE in the normal way. However, because your total annual income is lower than a full year of salary, you will often end up having overpaid tax in the early months and receiving larger net payments (or a refund) later.
Enhanced company schemes
Many employers offer enhanced maternity pay (e.g. full salary for 3–6 months, then SMP). Enhanced pay is taxed exactly like normal salary. The key difference is in your total annual income: if you normally earn £45,000 but receive only £30,000 in a maternity year, your effective tax rate will be lower.
How PAYE adjusts during the year
PAYE is cumulative — it accounts for your total earnings and tax paid year-to-date. If you earned full salary for 6 months then switch to SMP, your tax code will gradually "catch up" and you may see very low or zero deductions on later payments as the system recalculates.
Keeping In Touch (KIT) days
You can work up to 10 KIT days during maternity leave without ending your SMP. Payment for KIT days is taxable. Your employer can either pay you on top of SMP or offset SMP against KIT day pay — check your company policy.
Planning your budget
To estimate your monthly income during leave, input your expected total earnings for the year into the income tax calculator. For example, if you work at £45,000 for 6 months then receive SMP for 6 months, your total income might be approximately £27,500 — enter that to see your annual tax bill and approximate monthly take-home.