Hi all,
I can try to clarify.
Statutory Maternity leave and pay (SMP and SML) changed this year in April. All employed women are now eligible to a maximum of 12 months maternity leave regardless of length of service. This is made up of 26 weeks Ordinary Maternity Leave (OML) and 26 weeks Additional Maternity Leave (AML). During OML you retain certain rights such as the right to return to your normal job - these rights reduce during AML. To qualify for SMP, you must meet certain qualifying conditions that are based on your service and pay in the weeks before your 15th week prior to due date (e.g. you must have paid enough NI). If you have this, then you are entitled to 39 weeks SMP which is made up of 6 weeks paid at 90% of your earnings or £112.75 per week whichever is the higher followed by 33 weeks at £112.75 per week or 90% of normal earnings whichever is the lower. Your employer may have a policy to top up these statutory payments to higher levels - even if for short periods of your maternity leave. Any such top up is discretionary and they can ask for additional payments to be returned if you don't meet their requirements over your return to work - but you should be notified of this in advance.
SMP is classed as normal earnings - so is subject to all your normal deductions. Each tax year (April 6th to April 5th next year) employees typically have a tax free personal allowance of £5035 per annum before paying any tax (although this can be reduced by employer benefits such as medical cover or a company car or previous tax underpayments - Your PAYE Coding Notice will explain), then the next £2150 is taxed at 10%, earnings from £2151 to £33300 are then taxed at 22% and anything after that at 40%. So - depending on how much you have earned in the tax year to date when you go on maternity leave will determine the amount you will be taxed according to these tax bands. In addition, most employees will pay 11% National Insurance plus a further 1% for earnings above £33300 - although again this may vary if you are in contracted out pension schemes for example.
All that said, your tax is usually worked out each pay period (the frequency of when you get paid) based on your earnings for that period being your "expected" earnings for each month in the tax year. So the simplest way to get a rough guide as to what you will take home when you go onto maternity pay is to take your current gross pay, deduct your current net pay, then divide the difference into your current gross pay giving you an overall percentage. Then work out what your maternity pay will be based on SMP plus any company entitlements, and deduct this percentage from that.
E.g.
Normal gross pay per pay period is £1000
Normal net pay per pay period is £650
£1000 - £650 = £350
£350/£1000 = 0.35 (35%)
4 weeks SMP at £112.75 = £451
£451 x 35% = £157.85
£451 - £157.85 = £293.15
If you want more accurate and personal forecasts, you should talk to your employers payroll department - but note they don't have to do this, so may be reluctant!
There are a couple more things to remember. Firstly - SMP is paid in weekly amounts - so if you are used to being paid monthly - you will see your pay change to being paid in sets of weeks. Most payroll departments handle this by paying you 4 weeks, then 4 weeks, then 5 weeks in a 4, 4, 5 week cycle until you run out of SMP or return to work. So you will see your SMP fluctuate a bit rather than a steady monthly amount you may be used to.
Secondly - if you are starting your Maternity leave part way through a tax year, especially if you are a higher rate tax payer - then you may end up overpaying tax and will see any overpayments reflected in your coding notice for 2008 effectivly giving you a higher tax free personal allowance. It will all work out in the wash!
finally - note that the rates and limits I have provided are all related to the current 2007/08 tax year, and will change in April 2008.
For extra help government web sites are pretty good:
www.hmrc.gov.uk for tax and NI
www.berr.gov.uk for SMP and SML