Statutory Maternity Pay: Employer's Guide for 2026/27

Written by EmployerCalculator Editorial · Reviewed against official UK sources · Last updated: June 2026

SMP is paid by the employer and reimbursed by HMRC. This guide covers rates, eligibility, reclaim rules and the 3% employer extra for small employers.

SMP rates and eligibility for 2026/27

Statutory Maternity Pay for 2026/27 is paid at two rates. For the first six weeks, the rate is 90% of the employee's average weekly earnings (AWE) — there is no cap on this element. For the remaining 33 weeks, SMP is paid at the lower of the flat rate (£187.18 per week for 2026/27) or 90% of AWE if that is lower. Total maximum SMP across the 39-week payment period is approximately £7,006, though the exact amount depends on the employee's AWE.

Average weekly earnings are calculated from the employee's earnings in the eight-week period ending the Saturday before the qualifying week. The qualifying week is typically the 15th week before the expected week of childbirth. This means AWE is based on gross pay including overtime, commission, bonus and statutory sick pay paid in that reference period. If earnings fluctuate significantly, the AWE calculation can produce an SMP figure quite different from the current weekly wage.

To be eligible for SMP, an employee must have been continuously employed for at least 26 weeks into the qualifying week, be earning at or above the lower earnings limit (£123 per week for 2026/27), and provide the correct form (MAT B1) signed by a midwife or doctor. Employees who do not qualify for SMP may qualify for Maternity Allowance paid directly by the Department for Work and Pensions.

How employers reclaim SMP from HMRC

SMP is funded by HMRC, not the employer. Employers advance SMP payments through their payroll and then reclaim the cost. Most employers can reclaim 92% of SMP paid — meaning they bear 8% as a permanent cost. Employers who qualify as small employers can reclaim 103% — recovering the full SMP cost plus an additional 3%, which is the Small Employers' Relief designed to cover administration costs.

Small Employers' Relief applies to employers whose total Class 1 NI liability — both employer and employee — in the qualifying tax year was £45,000 or less. If your total NI bill was below this threshold, you qualify for 103% recovery. Check the qualifying year figure in your payroll records each April. The threshold is based on liability, not on what you actually paid (Employment Allowance can reduce payment but not liability for this purpose).

Reclaim is processed through your payroll submissions to HMRC. You offset the reclaim amount against the employer NI and income tax you owe to HMRC in the same period, reported through the Employer Payment Summary (EPS). If the reclaim exceeds what is owed in that period, HMRC will issue a refund. Keep detailed records of SMP calculations, AWE working, and reclaim amounts for audit purposes — HMRC can query SMP reclaims up to three years after payment.

Employer obligations and practical payroll management

Employers cannot refuse to pay SMP to eligible employees — it is a statutory entitlement. If an employer cannot afford to advance SMP, they can apply to HMRC's SMP Funding request process to receive the money in advance. This provision exists for very small businesses and start-ups where cashflow would be severely impacted by a full quarter of SMP outlay before reclaim.

During the SMP period, the employee's contract of employment continues unless they have resigned or been fairly dismissed. Accrual of annual leave continues during ordinary and additional maternity leave. The employee retains all contractual rights except remuneration — which is replaced by SMP — unless their contract provides enhanced maternity pay above the statutory minimum.

Enhanced maternity pay — which some employers offer as a retention and recruitment tool — is paid in addition to or instead of SMP from the employer's own funds. If an employer pays full salary for the first 12 weeks of maternity leave, for example, the SMP element of that payment is reclaimed via HMRC but the enhancement above SMP is a pure employer cost. Make sure payroll distinguishes between the SMP component and any contractual enhancement for correct reclaim calculation.

Frequently asked questions

How much does it cost to employ someone in the UK?

The true cost to employ someone in the UK is typically 15–20% above gross salary. At £30,000: employer NI £3,750 + pension £713 = approximately £34,463 per year. At £50,000: employer NI £6,750 + pension £1,313 = approximately £58,063 per year. Adding workplace overheads of £2,000–£5,000 can bring the total to 20–25% above the headline salary.

What is the employer NI rate for 2026/27?

For 2026/27, employer Class 1 National Insurance is charged at 15% on employee earnings above the secondary threshold of £5,000 per year (£96 per week, £416 per month). This rate increased from 13.8% in April 2025, when the threshold was simultaneously cut from £9,100 to £5,000. Both changes apply from 6 April 2025.

How much employer NI do I pay on a £35,000 salary?

At £35,000 salary, employer NI for 2026/27 is £4,500 per year — 15% on £30,000 of earnings above the £5,000 threshold. That is £375 per month. In 2024/25, the same salary produced £3,585 in employer NI. The April 2025 changes therefore add £915 per year on this salary alone.

What is Employment Allowance and who can claim it?

Employment Allowance lets eligible employers reduce their annual employer NI bill by up to £10,500 in 2026/27, increased from £5,000 in 2024/25. The previous £100,000 NI bill eligibility cap has been removed, so more businesses qualify. Companies where the only paid employee is also a director cannot claim. Apply through payroll software via the Employer Payment Summary indicator.

What is the total employer cost above salary?

Beyond salary, employer cost includes: employer NI (15% on earnings above £5,000), employer pension (minimum 3% of qualifying earnings between £6,240 and £50,270), and overheads such as equipment, software and workspace. For most UK salaries this adds 12–20% above headline pay. Use the inputs above to set your exact pension rate and overhead figure.

What changed for employers in April 2025?

Three changes took effect from 6 April 2025: the employer NI rate rose from 13.8% to 15%, the secondary threshold was cut from £9,100 to £5,000, and Employment Allowance increased from £5,000 to £10,500 with the eligibility cap removed. For a £30,000 salary, annual employer NI increased from approximately £2,884 to £3,750 — a rise of £866 per year.

How is employer NI different from employee NI?

Employer NI is a cost paid by the employer on top of gross salary — it does not reduce take-home pay. Employee NI is deducted from the employee's wages instead. For 2026/27, employees pay 8% on earnings between £12,570 and £50,270, then 2% above that. Employers pay 15% on all earnings above £5,000 with no upper cap. This calculator covers the employer side; for employee take-home pay see AfterTaxSalary.co.uk.

What are employer costs in the UK?

UK employer costs in 2026/27 are: gross salary, employer NI at 15% on earnings above £5,000, employer pension at minimum 3% of qualifying earnings (£6,240–£50,270), and any operational overheads such as equipment or software. For a £35,000 salary, statutory employer costs (NI + pension) add approximately £5,363/year before overheads.

How much do I cost my employer in the UK?

If you earn £35,000, you cost your employer roughly £40,363/year — your salary plus £4,500 employer NI and £863 minimum pension. At £50,000, the total is approximately £58,063. Your employer pays these on top of your salary; they are not deducted from your pay. Use this calculator to see the exact figure for your salary.

Is this a PAYE cost calculator for employers?

Yes. PAYE employer costs include employer NI — calculated at 15% above £5,000 for 2026/27 — plus the employer's auto-enrolment pension contribution. The full calculator models both alongside any overhead assumptions to give a total PAYE-basis employer spend per employee.

What is a cost to company (CTC) salary in the UK?

Cost to company (CTC) in the UK refers to the total annual cost of an employee to their employer — salary, employer NI, pension, and overheads combined. A £35,000 CTC salary typically means a gross salary of roughly £30,000–£32,000 once the employer's NI and pension obligations are included in the total. Use this calculator to work backwards from a CTC budget to a gross salary.

Once you know the cost — what next?

Running payroll correctly after you have calculated employer cost is the next practical step. The tools below handle HMRC RTI submissions, auto-enrolment pension and payslip generation automatically.

Compare UK payroll software → Open employer cost calculator Check Employment Allowance eligibility

EmployerCalculator Editorial. Content reviewed against HMRC guidance. Estimates only — not financial or legal advice. See our methodology and sources.