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HMRC internal manual

Employment Income Manual

Social security benefits: statutory maternity pay: interaction with other maternity pay

Part 10 Chapter 3 ITEPA 2003

The statutory maternity pay (SMP) scheme does not affect a woman’s right to any other maternity payments provided by her employer. But SMP must be offset against any employer’s maternity pay for the same period. Where the employer’s maternity pay is greater than SMP, the employer will only pay the rate of occupational maternity pay. If the SMP is greater than the employer’s maternity pay, the employer will pay the rate of SMP.

SMP and statutory sick pay (see EIM76350) cannot be paid to a person for the same period.

Women who do not qualify for SMP will still be able to claim maternity allowance from the DWP if they have paid the appropriate National Insurance contributions. Maternity allowance is a separate benefit and is not taxable (see EIM76100).

How employers recover the cost of SMP

The SMP legislation allows the employer to recover the cost of paying SMP by deducting 92% of the amount from the National Insurance contributions and income tax payments due under the PAYE system. Small employers may deduct 100% of the SMP paid plus a set percentage as compensation (Small Employers Relief). If necessary they can also apply for advance funding.