When a worker has a baby in the UK they are entitled to Statutory Maternity Pay (SMP). Whether they are entitled to the SMP, the amount they are due to receive and the period that they are due to receive it is attached to some entitlement criteria set by the government. In MDP, you can now create SMP for employees with our new automated calculation!
Auto Calculation Logic:
To use the automated calculator, the employee should have got at least one payroll in the system previously have been employed approximately 40 weeks before the due date. The system will use the last 8 payments to calculate their average weekly earnings (8 if weekly, 2 if monthly, 4 if fortnightly).
The calculation will also handle the pension entitlement. When getting SMP the worker is still entitled to receive the same Employers pension contributions. The system will calculate this based on the worker’s average weekly earnings and adds an override to their contribution on their record. The same applies to Employee’s Contributions where the scheme is a Salary Sacrifice scheme.
Please note:
- SMP cannot overlap with an SSP entry.
- You can use the calculator to create an entry across different tax year, but we don't know what the SMP rate for next tax year, so it will calculate based on the default £194.32 as the weekly SMP rate for next tax year. If it's going past new tax year, we would advise you to still create it, but override the amount against the employees for that specific period when you know the new tax year SMP rate😊
Validations:
1. As mentioned above, you cannot do SMP and SSP for the same worker for same period. Also, employee should have been employed for approx.40 weeks before due date😊
2. You will not be able to create SMP for less than 2 weeks after baby's due date😊 It should be greater than 2 weeks from baby's due date!
Steps to create SMP:
If you want to setup SMP for the particular employee, you can go to Employees screen, search for an employee, go inside employee record and Click "Add" in Statutory Payments widget.
You can click "Add Statutory Payment" and select "Statutory Maternity Pay" from the dropdown to add it.
In order to auto calculate the SMP amount for each payment, you would have to select the "Baby Due Date", "Maternity Leave Start Date" and "Maternity Leave Start Date" and click "Check Eligibility".
System will then check the dates you have provided and see if it's eligible for SMP and show the message. If it's eligible, system will calculate the average daily earnings based on above mentioned calculation (Auto calculation Logic) and compute the total number of SMP days to pay in each period based on whatever frequency the worker is in and the total SMP amount😊
If you want to see how SMP daily rate is calculated, you can go to the next tab - SMP Daily Rate Calculation and see that as well😊
And you can see the SMP pension calc as well based on the employee's avaerage weekly earnings😊
Finally, if you are happy with it, you can click the "Save" button, it will ask if you want to override the pension to that value displayed in that screen, if you select and proceed, it will apply to the employee's record (Er's pension), so that it will get applied when you pay SMP😊
Also, it will create the SMP item for this employee and add the SMP pay item as a one-off pay item in the particular period the worker is on maternity leave😊
Time Capture screen:
Salary will not be adjusted in this case, you would have to manually adjust the salary if it needs to be done. The system will only add Stat payment for the specific period😊
When you download the payslip, it will show the number of days the maternity payment is created for in that pay period with the amount and will also show you the ER's pension calculated as per your confirmation when you create SMP for this employee😊
Hope this article helps you to create the SMP for the employee😊 Please reach out to support if you do have any questions!