Maternity payments

[princesschick]

Hello! I'm just embarking on putting together the scary maternity pay spreadsheet this morning... Can anyone tell me what SMP (the £135.45) is after tax? I'm going on mat leave in June, so should have a fair whack of my personal allowance left over. I'm just not sure what NI will be. Thanks in advance :)

You don't pay tax on smp I don't think.

P.s are u self employed?

It's tax and ni free

The current UK tax threshold is £156/week so your SMP will not be taxed. You need to ensure your NI is still paid while you are off by signing up for Child Benefit (even if you are no longer eligible you need to still claim then opt out of receiving it).
I am also going on maternity in June but have a company car so my already paltry SMP will be taxed.

You do pay tax on PAYE and NIC, although it is likely to be below the threshold, it depends what else you have earnt in the tax year and if you have any other taxable benefits (eg car, healthcare etc) as these reduce your 'free tax'.

I run payroll, and generally advise people to work on approx £500/month - it is often more than this, and is likely to also include a repayment of overpaid tax.

The lower earnings limit for NI is currently £146.01/week (may change in budget though), so you pay 12% over this threshold.

Sorry, that meant to say that SMP is subject to tax & NI.

MA (if you are self employed or not eligible for SMP) is not.

The spreadsheet is progressing nicely

I'm employed...not self employed. So, I get to take the whole £135.45? Or will my company take tax at the usual rate and then rebate any surplus at the end of the year?

Oh tis confusing!

Thanks for the input ladies.

Thanks Ellypoo, I'm eligible for SMP. That sounds sensible. I don't get any other benefits, part from pension conts, which I understand are exempt.

I should know this as I'm a diploma qualified adviser, just don't come up against benefit tax ishoos bit like a plumber with a leaky tap...

No, tax will be deducted through PAYE, so the first 6 weeks is at 90% of your pay and will be subject to normal PAYE & NIC. After this, it is likely that your next payslip, at SMP only will include some PAYE back, because the personal allowance is effectively spread over the year, assuming that you earn a steady rate throughout - when you go onto SMP your earnings suddenly drop, so you will get some tax back. If you don't have a car or anything, then it is likely that you won't pay any tax in subsequent months.

Hope this helps!

Sorry - cross posted!

Your employers pension contributions should continue to be made on your usual salary throughout, although you can (generally) choose to take a 'holiday' from your employee pension contributions - we allow people to do this, it can make quite a difference.