Millward, May & Co - Wokingham Accountants
Wokingham Accountants

Maternity Allowances

Maternity Allowances

Maternity allowances for company directors. There are two types of maternity leave potentially available to company directors.


Statutory Maternity Pay (SMP)

Eligibility

SMP is usually paid to those who are in employment so directors could be eligible. However, if you are the shareholder and sole director you will not be entitled unless you have other employees who can cover your duties whilst you are off and the company can make enough money to cover your pay in your absence.

You are not allowed to work during your maternity leave other than for 10 ‘Keeping In Touch’ (KIT) days.

You also need to ensure:

  • You are on payroll in the “qualifying week” – the 15th week before the expected week of childbirth

  • You provide proof that you are pregnant (normally MATB1 certificate)

  • You have been continuously employed for at least 26 weeks up to any day in the qualifying week

  • You earn at least £118 per week (gross) in an 8-week “relevant period”

What do you receive and when?

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: £148.68 or 90% of their AWE (whichever is lower)

You can start your maternity leave any day from 11 weeks before your due date. Your maternity leave will start earlier than the date you pick if your baby comes early or if you are off work with a pregnancy related illness in the four weeks prior to your due date.


Maternity Allowance

Eligibility

If you do not qualify for SMP, then you could claim Maternity allowance. You could either get the allowance for 39 weeks or 14 weeks depending on whether you meet the criteria for each one.

Maternity allowance for 39 weeks

In the 66 weeks before your baby’s due date, you must have been:

  • Employed for at least 26 weeks

  • Earning £30 a week or more in at least 13 of those weeks

Maternity allowance for 14 weeks

You might get Maternity Allowance for 14 weeks if for at least 26 weeks in the 66 weeks before your baby is due:

  • You’re married or in a civil partnership

  • You’re not employed or self-employed

  • You take part in the business of your self-employed spouse or civil partner

  • The work you do is for the business and unpaid

  • Your spouse or civil partner is registered as self-employed with HMRC and should pay Class 2 National Insurance

  • You’re not eligible for Statutory Maternity Pay or the higher amount of Maternity Allowance (for the same pregnancy)

What do you receive and when?

You will either receive:

  • £139.58 a week or 90% of your average weekly earnings (the lower of these) for up to 39 weeks or

  • £27.00 a week for up to 14 weeks

You can claim Maternity Allowance as soon as you have been pregnant for 26 weeks. Payments will start 11 weeks before your due date.


Paternity leave

Statutory Paternity Leave can be taken as either one or two consecutive weeks’ leave.

Eligibility

You must:

  • Be employed by your employer up to the date of birth

  • Earn at least £118 a week (before tax)

  • Have been continuously employed by your employer for at least 26 weeks up to any day in the ‘qualifying week’

The ‘qualifying week’ is the 15th week before the baby is due.

What do you receive and when?

Statutory Paternity Pay is the lower of £148.68 per week or 90% of their average weekly earnings.

The start date must be either the date of birth, an agreed number of days after the birth or an agreed number of days after the expected week of childbirth. Leave must finish within 56 days of the birth.