To think I'm only going to get £300 per month on stat mat pay?

[Thisismynamenow]

So I think I've messed up my maternity pay calculations, and would appreciate some insight into what others earning around £40k received on stat pay during maternity leave.

I earnt just shy of £40k, and I'm fortunate enough to get 6 months (April to Oct) of full pay, then 3 months stat before I return to work in January.

I assumed I'd not pay full tax and NI as that's what the calculator I used suggested, and I assumed that I'd get £600 for those months (£156.22 pw).

However looking at my latest payslip, I'll be over the personal allowance by the time my stat kicks in. So I'll be fully taxed/ni/student loan/pensioned.

Tax is 20%
NI is 14% (ish)
Pension is 6%
Student loan is 9% over the threshold (usually around £12.5k)

£156.22 * 4weeks =£624.88

• 20% tax = £125
• 14% ni = £88
• 6% pension = £38

= £373

Am I being unreasonable to assume most of my SMP will be eaten up by tax?

Ive saved some to cover it but apparently no where near enough. What should I expect to receive?

Also I appreciate I'm privileged with both my salary and maternity package however I'm the main earner and need to figure out what I'll get.

Any advice is appreciated!

I'm in the same boat as you. Earnings the same and same mat package. I'm on my second month of SMP and last month brought home £600 ish. Didn't pay tax or NI or student loan on my monthly earnings. I'm doing some KIT days this month and next month to bump up the pay a bit as like you I'm also the main earner in my household :)

They don't deduct pension contributions from SMP as far as I am aware. I also don't think they deduct student loan (but I don't know for sure). But yes, if you are over your personal allowance you will pay tax on it.

I believe this is the case

But you do know your personal allowance is normally split up so you receive a bit of it per month right? So it's not like you use it up and pay no tax for 3-4 months and then everything after that is 20%. Normally (benefits and previous years underpay excluded) it is split evenly over 12 months, so about £1000 tax free a month. So you should get all your SMP if that's the case.

Will you be over the threshold to pay back student loan?

I earn similar to you, currently in SMP bit and it was £600

How do you know you're over your personal allowance?

You don't pay tax on smp so you should get the full £152 a week

That's not correct. You do pay tax on it, but only if you are over your personal allowance (or don't have one). Unless OP has lots of company benefits or a big underpayment for last year she shouldn't have lost or used it up on £40k a year.

It will be calculated monthly. You will likely tax when on the higher maternity pay but not on the smp. But overall if your income April-March exceeds personal allowance then yes, you pay tax.

That's not correct, it's taxable and whether you pay any tax depends on your tax code and persona circumstances

As other have said you don't use up all your personal allowance and then have none left, it's spread over the eyar

I was on 40k, and after the first 2 months of full pay I received 600 something (this year). I have paid of my student loan in full though.

You should get more than SMP as there will be a tax rebate element.

Your full pay (£20k apr-oct) will have been taxed on the assumption that you will continue to earn that much all year.

You don’t earn your first £12.5k of the year tax free and then salary goes down as you pay tax on 100% of the rest, it is averaged over the year. So you have £1k ish tax free allowance per month to use, your SMP falls within that and the unused £375ish tax free allowance attracts a rebate of tax you’ve paid earlier in the year; £375 x 20% =£75
So you should take home £700/m ish for those 3 months.

It is worth checking as I don’t contribute to my pension whilst on SMP but there is a big “catch up” payment in the first month back.

I've never EVER received a tax rebate this way. They always come at the end of the year. Including after my mat leaves.

Slightly off topic but in case it's helpful, i used my KIT days during the 3 months SMP bit to add a bit extra to the pot coming up. My employer offered 10 days paid at your usual daily rate. Obviously relies on someone being able to have the baby that day - my DH used his annual leave.

What Tax Code are you on?

if it doesn’t say W1 or M1 after it, then you’ll be on a cumulative code, so even if you’re paying tax at 20% now that’s based on your allowance to date, you still get that allowance each month so you’re more likely to get a tax refund on top of the SMP than have more tax deducted

@Icanstillrecallourlastsummer the way @BeastOfBODMAS has explained it is how I understand PAYE normally works.

I earn £40k. When I was on maternity, I received the full amount, my student loan did not come off.

It depends on when SMP kicks in to the tax year as you may be due a tax rebate. I’ve set up a spreadsheet for calculating mine and have worked out that I’ll be getting quite a large tax rebate in the first month. Also, the highest earner in the household so it’ll sting for a few months. Let me know if you want me to send you some info on how to model it in a spreadsheet

Also if you overpay student loan in a tax year due to being PAYE you can ask for it back.

The link is here www.gov.uk/repaying-your-student-loan/getting-a-refund

You do know that while tax is calculated annually (for the purposes of thresholds/bands), NI is based on pay period?