Help me understand my maternity pay!

[babybat]

I work for a university, and the maternity policy is 18 weeks full pay, then SMP, which can also be taken as 9 weeks full pay and 18 weeks half pay. Aside from spreading the pay out over a longer period, are there any benefits to taking it in this way? Will it affect how much tax is taken from my pay, since my monthly pay will drop when I'm on SMP, so my earnings over the year will be lower than at the start of the year? Or is it just to enable people to budget in the way that suits them best?

No answer, but why not ask your payroll department? Mine (also university) tends to be really helpful and clued up re. stuff like this...

I was never able to work out the tax implications fully, but you get a higher gross pay if you take 18 full weeks instead of 9 full and 18 half.

eg 18 full weeks at £400 per week, then 21 (39-18) SMP at £137(ish) per week = £10,077

9 full weeks at £400pw, 18 weeks at £200pw and 12 weeks at £137 = £8,844

I can't imagine that there would be many instances when the tax implications mean you are better off not taking 18 weeks full then SMP (unless that would push you over the boundry to pay income tax at 40%)