Smp and tax

[Rainbowflower2024]

Hi all! Just wondering if someone can explain how tax works with smp? I’m due to go on maternity leave July 1st and just want to know roughly how much I’ll be taxed on smp. I’m not understanding how it all works so hoping someone can explain in simple terms for me!
thank you

SMP is taxed in the same way earnings are. Assuming you have earned nothing this tax year and only receive SMP you will pay no tax as £187.80 per week is below the tax threshold.

@Fletchasketch would that mean I’ll be taxed from July when I receive my smp due to the tax year starting this month?

You’ll probably be taxed on the first 6 weeks of SMP if you earn above the threshold, after that the £187 a week isn’t enough to be taxed (if that is all you earn).

Not sure what you mean about being taxed from July, you get taxed every month you get paid if you earn above the threshold, that doesn’t change?

@Mrsttcno1 i see that makes sense! I meant if I get taxed from July from my smp when it starts if that makes sense? I used the smp calculator on the gov website to work out the monthly payments and assumed I’d be taxed on the first 6 weeks as the amount is higher, but the rest is under £1000 each month and that is what I was confused about whether I’ll be taxed or not on those amounts.

Usually there is dynamic tax system now so they adjust the tax you pay later in the year. They will tax you each month assuming you will continue to get that amount for the rest of the tax year and will tax you based on that amount taking into account what you have earned earlier in the tax year.

You will be taxed in those early months as if you are going to get that amount every month. In the later months when your pay drops they will adjust the amount of tax you pay and might even pay you tax back.

I used to get bonuses in my previous job in month 2 of the tax year which was a pain. I would be taxed a lot that month but then I would get paid tax back in the following months but by the end of the tax year it will be right for the amount I had earned in the 12 months period. If you have time near the end of the tax year without paying you might end up being owed a bit of tax back which usually happens automatically a few months after the end of the tax year.

You’ll get taxed for every month you earn above the personal allowance, so not in the months 6-39 where you only earn SMP.