Maternity pay and tax question

[pinkie87]

Hi all,

I'm due to start my maternity leave at the end of July. I've just had a breakdown of my gross income each month if I take the full year. My OMP is around £8.7k and SMP is £4.3k. I am opting to spread my OMP over the full year.

So my question is, will my tax be adjusted accordingly given that I will only be earning just over the income tax limit for the whole year, or given that my pay at the beginning of mat leave is higher, will I be taxed according to each monthly payment and then just receive a rebate at the end of the year? Sorry if this is Confusing, I cant think how to word it properly!

Tax is cumulative so when your pay reduces you will start to pay less tax. There shouldn't be a rebate at the end of the year unless you earn under the limit or your income suddenly reduces a lot towards the end of the year.

However national insurance isn't cumulative so you don't get any allowance for contributions paid earlier in the year b

You'll only be due a rebate once you go go under the limit as well. As tax in cumulative in the financial year your earnings pre mat leave and post mat leave in that tax year will also be taken into account. From what you've said and taking the tax free allowance into account (assuming you're on code 1060L) you'll pay about £40 a month. This will change if you have a salary sacrifice.

Ok thank you, I've got it now. I wasn't thinking of it being cumulative that's why I was confused.