Is SMP taxable??

[LaCerbiatta]

Just had my meeting about mat leave with HR and was very surprised to hear that SMP will be taxed! Was expecting for the first 6 weeks pay, in which you get 90% of your gross income to be taxed, but the £123,06 a week as well??!! How much will I get then?

Also, I was told that the company won't contribute towards my pension unless I do (of course I won't or my income will go from very little to nothing ). Is this common? I suppose it's a discretionary benefit, but still I was under the impression that it was descrimination to stop any benefits during your mat leave?

I know my company will do the absolute minimum.... they're evil stingy bast*s

yes it's taxable and yes I think they can stop pension contributions because it's part of your pay IYSWIM.

On the plus side SMP does not count toward your CTC income, they disregard it.

What's CTC income?

Some places have graded pension contributions - for example where I am the first 2% employer contributions you don't need to match, then they will match up to 7%. So I would assume on maternity leave if you don't contribute they would still contribute the 2%.

It is worth asking because even 2% going in from the company would keep it ticking along?

Oh of course LG - I never thought - 2% of SMP going in as pension contribution is actually bugger all isn't it?

and 6 months on SMP, depending on your salary, will mean you pay much less tax as well. I took the whole year off and paid bugger all in tax. The tax free allowance is something like 5.5k (someone tell me the rigth amount?)

Will I definitely get CTC? I tried using the calculator (or a calculator) but because baby is only due in Feb it wouldn't accept the dates. Basically, I'm on £30000 pa and dh is now on £23000 but will maybe go up to ~£28000 next year.

Do they calculate it over a tax year or would I be able to get it just for the mat leave period?

Thanks!

Yes, I didn't pay any tax for the first 2 months back at work because of my overpayment while on mat leave.

I think the cut off for CTC is 60kish? Anyway, you won't be earning 30k the year you're on mat leave (unfortunately).

Thanks everyone! When should I apply? When I start my mat leave? Before?

How can that be the gross monthly amount?? Shouldn't it be (123.06 X 52)/12? i.e. £533?

Yes SMP is taxable income.

As for pension schemes, see here, if your employer contributes a percentage of your income to an occupational pension scheme, they must continue making contributions as normal, as if you are earning your normal salary. If you are required to make contributions, you should also continue to do so, but at a lower rate, so if you pay 3% of salary, for example, you will pay 3% of SMP. If your employer pays 3% of salary, they must continue doing so even if you are on SMP.

Thanks flowerybeanbag! HR definitely didn't explain it like that! And the lady was pregnant as well!!

Apologies for all of you who work in HR, but the department in my company are the most unfriendly, unhelpful, less human, people I've ever come across!!

and you don't get SMP for the full 52 weeks - think its for 39? The remaining 13 are completely unpaid

Well it turns out my company runs a defined contribution scheme, not a defined benefit scheme. This means that I contribute a determined amount in pounds, not a percentage (although percentages were always discussed, never amounts). This means that they will match whatever amount I decide to contribute.

Why am I even surprised....

For the 13 weeks unpaid maternity leave normally employer contributions to a pension scheme would stop as would employee contributions, because employer contributions are normally dependent on employee contributions being made.

Some pension scheme provide that the employer will make up contributions for the last 13 weeks as long as the employee does the same.

Interesting - if you are not required to make any pension contributions in order to get them from your employer, then they should continue to pay as normal and you not have to pay anything.