Maternity pay from small company

The HMRC website will give you all the information. The company will need to register as an employer.

Thanks. I had checked that but had got a little confused to be honest.

From what I can see, my wife needs to be working for 26 weeks into the

15th week before the baby is due. Payment can start from 11 weeks before due date, so she needs to be paid for 30 weeks.

Earnings are calculated as the average of 12 weeks pay. Payment is

117.18/week, max of 90% earnings, meaning she would need to earn 130.20 over the 12 weeks period.

Does the 12 weeks pay need to be the same as the other 18 previous to it, or can they be lower? Will the company/she need to make any NICs? Apologies if I'm asking obvious questions but I don't really know much about employment rules!

Thanks again,

Tim

£130.20 per week not over the 12 weeks.

It can be lower but what's the point?

Both will have to pay NICs.

hat but had got a little confused to be

Thanks Peter. The 12 weeks I mentioned was what I thought was used to calculate the level of SMP - average of the last 12 week's pay x 90%. The question about lower was, could I , for example, pay my wife £5 a week for the first 18 weeks, then £130.20 for the final 12, and then for her to receive SMP of £121 for the full length of her maternity. Point being, it costs my company less to pay her. Along the same lines, is there a minimum pay to require NICs paid, if so, is that a minimum she will need to be paid for the first 18 weeks?

Thanks in advance,

Tim

wrote

Will she work less than an hour per week?

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Is she a director?

Are you paying her below minimum wage legislation?

Except for a little bit of NICs the money is just going round and round. There's tax charged on the income and tax reduced due to the expense.

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No, she's not a director.

She will be paid minimum wage I suppose.

I thought the SMP was funded from the government though - that's the money that is extra and what I would be planning around.

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I was meaning the normal wages.

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I doubt it. The government doesn't fund anything if there's a business they can stick it to instead.

< "Recovering SMP/SPP How much do I get back? The amount you get back normally depends on your total gross, employers' plus employees?, Class 1 NICs in the appropriate tax year.

If your annual liability for Class 1 NICs is £45,000.00 or less you are entitled to 100 per cent of the SMP/SPP"

-- I'm using an evaluation license of nemo since 463 days. You should really try it!

She needs to be paid at least the LEL, currently 90 a week, to get NI benefits including SMP. I think it needs to longer than for 18 weeks but I can't remember.

If you pay her an amount somewhere between the LEL (90) and PT (105), then there is no NI to pay by either employee or employer, no tax either unless she has other income (it's within the personal allowance), but she will qualify for NI benefits like SMP, SSP, JSA etc.

Make sure she's actually doing work to the value of what you pay her, otherwise you may have problems.