Maternity pay and tax

Don’t forget everyone gets a tax free threshold of around £12,570 so if you’re taking 9 months a lot will be in one tax year xx

It’ll be based on your taxable pay in that month and as tax is cumulative if you pay more tax at the start you may get some back through your PAYE as you won’t reach the threshold for the year! This depends on your own tax code etc as everyone is different

hey, I’m not sure I understand this.. I’m due in May and hoping to take a year (I don’t get anything extra from work so won’t get paid for the last 3 months) so working full time up until May I will be above that threshold for the year

okay maybe I need to find an online calculator as I’m finding this so difficult to understand 🙁 It doesn’t help my manager is so useless with stuff like this so have no help in understanding

It will depend on your own personal circumstances also as in the first 6 weeks you get paid 90% of your average weekly earnings so yes you may be above the threshold but you won’t be taxed at the same level you did pre going off - it’ll be based on your taxable pay in that month and if you’re on a cumulative code it will look at your annual tax YTD depending on when you go off

When you move from the 90% to the lower amount you may pay a small amount of tax and then none - it all depends on the time you go off and your own individual circumstances and previous pay in that year and tax code etc Depends on the pension scheme - if you’re in a salary sacrifice scheme you can’t take a salary sacrifice from a statutory payment so the Employer should cover it but if you’re in a net deduction pension the deduction will be deducted but based on your pensionable earnings for that month - when in 0 pay your pension contributions will stop for both employee and employer

As you're starting your leave in may and the tax year starts in April you shouldn't be taxed at all. I started in Jan last year with my first and hadn't quite hit the tax threshold yet so never paid a penny of tax on my smp

you will pay tax on the 90% of your average weekly earnings in the first month if it’s over the tax threshold but if you’re owed tax back it will be paid back through your PaYE

It is really confusing for people if you’re not used to working with it - I work in payroll so I can sort of work out what it’s roughly going to be but as I say it always depends on someone’s own personal circumstances as everyone has different salaries, tax codes etc and go off at different times so everyone’s circumstances are different so it’s not always cut and dry

Thank you for responses and for your knowledge Aimee! I think I will try and get in touch with someone in HR to see if they can help clarify a little as they might be best to help estimate it all x

There are a couple of charities who might be able to advise you - Maternity Action and Pregnant then Screwed....x

The payroll dept should be able to provide a schedule of your monthly payment breakdown ( gross payment per month) so you at least know what your gross would be each month 😊

Can you email your HR/payroll department and ask for a breakdown of your monthly maternity pay? Not every employer may do it but I’m going to request it to (hopefully) put my mind at ease before I go off. Hope you get the answers you want x

oh I never paid tax on that amount as I was under the threshold x

I didn't really think of that either tbh!

yeah you can request it - like a payment schedule - they should be able to give you a breakdown of your weekly/monthly SMP or occupational maternity pay if you’re company does paid maternity leave

I used my employers maternity calculator which showed the monthly amounts for 9 months I’d be paid.

I’m taking 12 months off so I added up to figure out my maternity salary for the year

I then put it into the Salary Calculator online to figure out tax, pension, student finance contributions and it breaks it down into a monthly amount for the 12 months! So helpful to know specifically what I’ll be working with every month. I plan to save in the early days to then top up my wage in the last part if that makes sense x

Help please! Sorry to jump on….im going on maternity next week and get 18 weeks full pay so will drop to SMP from October. I will go over the yearly tax threshold by around £6k. Work has advised I will pay tax and NI on the SMP.

However I am reading conflicting information that also says you get a monthly tax free allowance so if my Mat pay is under £1000 a month I won’t pay tax and ni.

Anyone able to advise as I have no idea what I should be budgeting! X

between the start of the tax year and when you drop to smp will you have earnt over £12750? If so yes you'll pay tax and ni if not and you're still under that amount you shouldn't pay or if you do pay you'll get it as a rebate in April as far as I am aware xxxx

ok thanks. Yes I will have earnt around £19,000. So basically il drop from like £750 to £500 a month after I pay tax and NI 😭

wow, I only got 4 weeks full pay, then 50% before Smp

I find it all confusing 😕

crazy the difference between companies isn’t it! Aldi now give 24 weeks full pay which is incredible! Might have to change jobs before we start trying for the 2nd 😂

It really is, I just want to know what money il have to I can budget and £200 a month difference is huge, that’s 3 weeks food shopping for us! X

@Charlotte I saw that! I think it's amazing too. I'm a teacher and now thinking I should've just worked at Aldi. I think I'd be on the same after paying 3 student loans, etc. Xx