STATUTORY MATERNITY PAY
| Name | Data code |
| SMP eligibility indicator | M000 |
| Expected Date of Childbirth | M010 |
| Actual Date of Childbirth (For Early Birth) | M011 |
| First Complete Day of Absence due to Pregnancy Related Illness | M012 |
| Start Date of Maternity Pay Period (MPP) | M020 |
| Weeks remaining at ‘Earnings Related’ rate (higher) | M030 |
| Weeks remaining at ’Standard’ rate | M040 |
| Weeks paid at ‘Earnings Related’ rate (higher) | M050 |
| Weeks paid at ’Standard’ rate | M060 |
| Weeks to be paid at ’Standard’ rate for payroll adjustment | M065 |
| Small Employer Relief Applies | M100 |
| Weeks excluded from SMP this pay period only | M070 |
| SMP increase this payrun only | M701 |
| SMP decrease this payrun only | M702 |
| Average earnings replacement | M703 |
| Replace ’Earnings Related’ rate | M704 |
| Positive pre-determined SMP amount | M705 |
| Negative pre-determined SMP amount | M706 |
| SMP total paid in current tax year | M708 |
| The following relate to the application of a pay rise under the Alabaster rule | |
| Increase by a cash amount the Average Earnings used for SMP | M741 |
| Increase by a percentage the Average Earnings used for SMP | M743 |
| Update the Average Earnings used for SMP | M745 |
Statutory Maternity Pay (SMP) and Maternity Leave is a scheme for women to receive maternity pay from employers. Maternity Leave can last for up to 52 weeks. SMP is paid to an employee for up to the first 39 weeks after leaving work to have the baby, provided the employee has been in employment from any point in the 26th week before the qualifying week. SMP is not payable during the additional 26 weeks Maternity Leave.
The qualifying week is 15 weeks before the expected date of childbirth. The expected date of childbirth is obtained from a doctor or midwife usually on form MATB1.
The mother may choose when SMP payments are to start. The earliest start is 11 weeks before the expected date of childbirth. The latest start point is the date after actual birth.
SMP and Maternity Leave can start on the instruction of the employer if the employee is absent from work with a pregnancy related illness 4 weeks before the expected date of childbirth.
To be eligible for SMP, an employee must be a woman aged 16 to 60. If SDWorx-pay successfully validates the sex and age of the employee, it checks the length of time of employment with the company, and calculates the employee’s average weekly earnings to determine the relevant SMP rates.
To pay SMP to an employee, SDWorx-pay requires:
- expected date of childbirth (using Expected Date of Childbirth/M010)
- the start date of the Maternity Pay Period (MPP) (using Start Date of Maternity Pay Period (MPP)/M020)
- and if the employee is eligible for SMP (set against SMP eligibility indicator/M000).
If the employee is absent due to pregnancy related illness during the 4 weeks prior to the EWC and have not yet started their Maternity Pay Period, you are entitled to start the MPP early. To do this enter the date of absence (using First Complete Day of Absence due to Pregnancy Related Illness/M012). This will start payment on the day following the date entered.
CALCULATING SMP
In accordance with HMRC requirement, SDWorx-pay calculates the employee’s average pay (Class 1 NI earnings) over the 8 weeks from and including the qualifying week (providing it is a payment week):
- For a weekly payroll, adds the pay for the qualifying week and the previous 7 pay periods and divides by 8 to obtain the average weekly pay.
- For a fortnightly payroll, adds the pay received in the qualifying week to that of the previous 3 pay periods and divides by 8 to obtain the average weekly pay. If the qualifying week is not a paying week, adds the pay of the previous 4 pay periods.
- For a lunar payroll, adds the pay received in the qualifying week to that of the previous pay period and divides by 8 to obtain the average weekly pay. If the qualifying week is not a paying week, adds the pay of the previous 2 pay periods.
- For a monthly payroll, adds the pay received in the qualifying week to that of the previous pay period, multiplies by 6 and divides by 52 to obtain the average weekly pay. If the qualifying week is not a paying week, adds the pay of the previous 2 pay periods.
To be eligible for the SMP, the employee must have worked continuously for at least 26 weeks up to and into the qualifying week, and have an average pay above the Lower Earnings Limit (LEL).
SMP rates are announced by HM Revenue and Customer (HMRC)each tax year, and are:
- 6 weeks at the ‘earnings related’ rate
- 33 weeks at the ‘standard’ rate.
PRE-DETERMINED AVERAGE EARNINGS AND PAYMENTS
If for some reason, the employee’s calculated average pay cannot be used by Payroll Active, you can enter a pre-determined average earnings on which SMP payments will be based (using Average earnings replacement/M703). You can also change the ’earnings related’ rate, using Replace Earnings Related Rate/M704.
If the employee returns to work during the 39 week maternity pay period, you can restrict SMP payments for a specified number of weeks, using Weeks excluded from SMP this period/M070.
You can also pre-determine SMP payments, in which case you must enter these payments throughout the period of payment and not revert to automatic calculation. To enter these payments use Positive pre-determined SMP amount/M705 and Negative pre-determined amount/M706.
PAYING SMP
SMP is automatically paid into allowance number 70, which is reserved for maternity payments, unless you set up a separate allowance for SMP. The details of this allowance are defined at company set-up time, including the number of the reducing allowance against which SMP can be offset (for example, the basic pay allowance, number 01).
If the reducing allowance is less than the SMP payment calculated by Payroll Active, the allowance is defined at company set-up time to be set to zero or allowed to become negative. If set to zero, Payroll Active prints WARNING – SMP ROUNDING on the Exception Report, when Payroll Active calculates SMP.
At company set-up time, it can be specified that if the balance of the reducing allowance is less than the SMP amount, the employee’s basic pay will be reduced also.
If the reducing balance is defined at company set-up time to be the basic pay allowance (number 01), the basic pay will become negative if the basic pay is less than the SMP amount.
The calculated amount of SMP is printed on the payslip and is shown as a separate amount, and if specified, shown as offset against the nominated allowance.
The SMP allowance will be zeroised in accordance with the company calendar specified for the allowance at company set-up time.
If Payroll Active accepts the values you enter against SMP data codes but does not calculate a payment, it will print a warning message on the Exception Report that explains why payments have not been calculated.
From the SMP start date (held against Start Date of MPP/M020) all allowances (including basic pay), deductions and pension contributions continue to be processed as normal until they are stopped or adjusted.
The total SMP paid to-date in the current tax year is held against SMP total paid in current tax year/M708. This is cleared down at the end of each tax year.
WEEKS PAID AND WEEKS REMAINING
Payroll Active automatically maintains the number of weeks paid and the number of weeks remaining of the employee’s entitlement. You can however, replace any of these using:
- Weeks remaining at ’earnings related’ rate/M040
- Weeks paid at ’standard’ rate/M060
However, if you change any of these values, you must also change the others in accordance with the following rule:
- For employees, the sum of the entitlement and weeks paid is always 6 at the ’earnings related’ rate and 33 at the ’standard’ rate.
SIGNED INPUT
You can enter positive or negative cash amounts against some of the SMP payroll items, by preceding the amount with a positive or negative sign. If you enter no sign, a positive amount is assumed. These are the items:
- SMP increase/M701
- SMP decrease/M702
- Positive pre-determined SMP amount/M705
- Negative pre-determined SMP amount/M706
Note the effect of entering a negative amount against:
- SMP increase/M701
- SMP decrease/M702
- Positive pre-determined SMP amount/M705
- Negative pre-determined SMP amount/M706
is to reverse the effect; that is, an increase becomes a decrease, and a decrease becomes an increase.
CORRECTING ERRORS AND PAYROLL ADJUSTMENT
There are several ways in which you can correct SMP errors:
- By entering positive or negative pre-determined payments (using Positive pre-determined payment/M705 or Negative pre-determined payment/M706). Once you enter a pre-determined payment, you must continue to pay SMP in this way for the rest of the maternity period.
- By increasing or decreasing the SMP by a specified amount for this payrun only, using SMP increase/M701 or SMP decrease/M702. In this way you can pay or recover an amount of SMP without affecting the number of weeks paid or weeks still to be paid.
- By entering weeks to be paid at the ’earnings related’ rate and/or ’standard’ rate for payroll adjustment, using:
- Weeks to be paid at ’earnings related’ rate for payroll adjustment/M055.
- Weeks to be paid at ’standard rate’ for payroll adjustment/M065.
together with a positive or negative amount (using Positive pre-determined payment/M705). Note that you do not use Negative pre-determined payment/M706 in payroll adjustment.
Payroll adjustment differs from the other methods of correcting errors by producing a separate payslip, and allowing you to reverse the previous pay period (using Previous period reversal/E072).
If as a result of payroll adjustment, the number of weeks paid exceeds 39, Payroll Active prints SMP WEEKS EXCEEDS LIMIT on the Exception Report.
All payroll adjustment data must be entered only from a Payroll Adjustment screen or by using a form-type CD. Refer to Appendix E for a list of payroll adjustment items.
None of these methods allow you to correct errors made in the current payrun.
Note:
The following reports can be affected as a result of managing SMP:
- Input Error Report
- Exception Report
- End of Year Tax Returns
- Financial Summary
- SMP Payments Report
- SMP Entitlement List
See
- EMPLOYEE, for the following details:
- Sex/E041
- Basic period hours/E058
- Dormant indicator/E067
- Pay manual adjustment/E070
- Previous period reversal/E072
- Birth date/E080
- Start date/E081
- Leaving date/E082
- ALLOWANCES, for information about managing allowances.
SMP PAYROLL ITEMS
| SMP ELIGIBILITY INDICATOR | M000 |
Payroll Active always sets this indicator to Y or N. Use M000 to re-set the eligibility of an employee to receive SMP payments.
Format
Y or N.
Example
The employee is to become eligible to receive SMP payments: M000 Y
Note:
- After you have entered an expected date of childbirth (using Expected Date of Childbirth/M010), Payroll Active determines the qualifying week, then performs two checks:
- It checks the employee’s start date (held against Start date/E081) to ensure that the employee has worked for the company for at least 26 weeks up to and including the qualifying week. If not, it prints EMPLOYEE INELIGIBLE FOR SMP – SERVICE TOO SHORT on the Exception Report.
- It calculates the employee’s average pay to ensure that it is not below the LEL. If it is, Payroll Active prints INELIGIBLE FOR SMP – AVERAGE PAY BELOW LEL on the Exception Report.
If both conditions are satisfied, Payroll Active sets the eligibility indicator to Y. If either or both are not satisfied, Payroll Active sets it to N.
- Use M000 to re-set the eligibility indicator to Y to pay the employee pre-determined SMP amounts, and N to stop any further SMP payments.
- After Payroll Active has calculated the SMP entitlement, it sets the dormant indicator (see Dormant indicator/E067) to M and does not pay the employee until you enter 0 to clear the indicator value
.
| EXPECTED DATE OF CHILDBIRTH | M010 |
Use M010 to enter the employee’s expected date of childbirth.
Format ddmmyyyy
Example
The expected date of childbirth is 8th April, 2022:
M010 08042022
NOTES:
- For M010, the date is the expected date of childbirth as determined by the employee’s midwife or doctor using form MATB1.
- Enter 8 zeroes to clear the expected date of childbirth.
- Having entered the expected date of childbirth, Payroll Active calculates the qualifying week as the date that is 15 weeks before the expected week of childbirth. It then checks that the employee is eligible:
- If the employee is a male (see Sex/E041), Payroll Active displays MALE – NOT ELIGIBLE FOR SMP.
- If the employee is under or over the age limits (using Birth date/E080), Payroll Active prints EMPLOYEE UNDER 16 YEARS OLD or EMPLOYEE OVER 60 YEARS OLD on the Exception Report.
- If there is no start date for the employee (using Start date/E081), Payroll Active prints ELIGIBILITY NOT CHECKED – NO START DATE on the Exception Report.
- If a leaving date has been entered for the employee (using Leaving date/E082), displays SMP DUE, BUT LEAVING DATE HELD on the Exception Report.
- If the employee has not worked for the company for 26 weeks up to and including the qualifying week, displays EMPLOYEE INELIGIBLE FOR SMP – SERVICE TOO SHORT on the Exception Report.
- If the employee has not been on Payroll Active for sufficient time to enable Payroll Active to calculate average pay, displays AVERAGE PAY FOR SMP NOT HELD on the Exception Report. You should enter an average pay (using M703).
- If the employee’s average pay is below the LEL for National Insurance, Payroll Active prints INELIGIBLE FOR SMP – AVERAGE PAY BELOW LEL on the Exception Report.
- If the employee is marked as a leaver (for example by using Employee status marker/E001) to set the leaver marker, or by using Leaving date/E082 to enter a leaving date), Payroll Active prints SMP REM TO BE PAID FOR LVR on the Exception Report.
- If SMP is being calculated or a pre-determined amount of SMP is being paid to the employee, Payroll Active prints SMP STARTED on the Input Error Report.
- If you do not enter an expected date of childbirth, or it is rejected, and you enter an SMP start date (against Start Date of MPP/M020), Payroll Active prints NO CHILDBIRTH DATE on the Input Error Report.
- If you enter an expected date of childbirth and the employee has received SMP, returned to work and the SMP total to-date has been cleared down (see SMP paid in current tax year/M708), Payroll Active prints MORE THAN 26 WEEKS SMP PAID on the Exception Report. You should enter eight zeroes against M010 to clear the remaining SMP details.
- Payroll Active calculates the employee’s average pay over the 8 weeks from and including the qualifying week (providing it is a payment week), and holds the amount against Average earnings replacement/M703.
- To change the expected date of childbirth, simply replace the existing date by entering the new date. However, since Payroll Active automatically sets the starting date against M020 as 11 weeks before the new expected date of childbirth, to keep the same starting date for SMP payments, you must re-enter the date (using Start Date of MPP/M020). Note that the starting date must never be more than 11 weeks before the expected date of childbirth.
- To remove an existing date, enter zeroes against M010. Payroll Active removes all SMP details for the employee, except for SMP paid to-date (held against SMP paid in current tax year/M708).
| ACTUAL DATE OF CHILDBIRTH (FOR EARLY BIRTH) | M011 |
Use M011 to enter the actual date of childbirth.
NOTE. M011 is used to start the MPP earlier if the child is born before the expected date of childbirth.
Format ddmmyyyy
Where dd is the day, mm is the month and yyyy is the year.
Example
The actual date of childbirth is 10th April, 2003:
M011 10042003
| FIRST COMPLETE DAY OF ABSENCE DUE TO PREGNANCY RELATED ILLNESS | M012 |
If the employee is absent from work due to a pregnancy related illness during the 4 weeks before the expected date of childbirth, enter the date of the first complete day the employee is absent. The Maternity Pay Period will start on this date.
Format ddmmyyyy
Where dd is the day, mm is the month and yyyy is the year.
Example
The first complete day of absence is 8th April, 2003: M012 08042003
| START DATE OF MATERNITY PAY PERIOD | M020 |
Use M020 to set the intended start date of SMP payments. If this is not entered then Payroll Active assumes that the MPP will start 11 weeks before the expected date of childbirth.
Format ddmmyyyy
Where dd is day, mm is the month and yyyy is the year.
Example 1
The starting date of the maternity pay period is to be 10th April, 2003:
M020 10042003
Example 2
On the April, 2003 payrun, an expected date of childbirth and MPP start date are entered, of 9th July, 2003 and 30th April, 2003 respectively. The start date is 10 weeks before the expected date of childbirth:
M010 09072003
M020 30042003
Example 3
On the April, 2003 payrun, the expected date of childbirth is changed to 21st July, 2003.
To keep the MPP start date as 10 weeks before the expected birth, the date of 12th May, 2003 is re-entered against M020. Otherwise, Payroll Active will assume a start date 11 weeks before the new expected date of childbirth:
M010 21072003
M020 12052003
Note:
- You can only replace a starting date by a later date (since the starting date must never be more than 11 weeks before the expected date of childbirth).
- If you enter a new starting date and there is no expected date of childbirth, Payroll Active displays NO CHILDBIRTH DATE.
- If you enter a new starting date and SMP is being paid, either as a pre-determined amount or is being calculated, Payroll Active will print SMP PAYMENTS ALREADY STARTED on the Input Error Report.
- If you change the expected date of childbirth, Payroll Active automatically sets the starting date against M020 as 11 weeks before the new expected date of childbirth. This means that if you require the start date to remain the same, you must re-enter the starting date. Note that the starting date must never be more than 11 weeks before the expected date of childbirth.
- Enter 8 zeroes to clear the SMP start date.
| WEEKS REMAINING AT ’EARNINGS RELATED’ RATE | M030 |
Use M030 to replace the number of weeks still to be paid, at the ’earnings related’ SMP rate (the higher rate). Payroll Active automatically updates these values each time it calculates SMP payments.
Format nn
Where nn can take the value 0 to 6 for weeks remaining at the ’earnings related’ rate.
Example 1
The number of remaining weeks at the ’earnings related’ rate for an employee has been reduced to 4 (from 5), using M030. Since the employee is being paid SMP, you must also change the number of weeks paid to 2 (from 1), using Weeks paid at ’Earnings Related’ rate/ M050 .
M030 4 (from 5)
M050 2 (from 1)
Note:
- Each time Payroll Active calculates SMP, it automatically updates the values against M030 and:
- Weeks paid at Earnings rate/M050
- The relationship between the weeks entitlement and weeks paid is:
- For employees, the sum of the entitlement and weeks paid is always 6 at the ’earnings related’ rate and 33 at the ’standard’ rate.
- Payroll Active first sets Weeks remaining at ’earnings related’ rate/M030 to 6 and Weeks remaining at ’standard’ rate/M040 to 33.
| WEEKS REMAINING AT ’EARNINGS RELATED’ RATE | M040 |
Use M040 to replace the number of weeks still to be paid, at the ’earnings related’ SMP rate. Payroll Active automatically updates these values each time it calculates SMP payments. Format nn
Where nn can take the value 0 to 6 for weeks remaining at the ’earnings related’ rate.
Example 1
The number of remaining weeks at the ’standard’ rate for an employee has been reduced to 4 (from 5), using M040. Since the employee is being paid SMP, you must also change the number of weeks paid to 2 (from 1), using Weeks paid at ’standard’ rate/ M060.
M040 4 (from 5)
M060 2 (from 1)
Note:
- Each time Payroll Active calculates SMP, it automatically updates the values against M040 and:
- Weeks paid at standard rate/M060
- If you replace either of these numbers of weeks and SMP is being paid, you must replace the corresponding numbers of weeks paid at the standard rate (using Weeks paid at standard rate/M060.
- The relationship between the weeks entitlement and weeks paid is:
- For employees, the sum of the entitlement and weeks paid is always 6 at the ’earnings related’ rate and 33 at the ’standard’ rate.
- Payroll Active first sets Weeks remaining at ’earnings related’ rate/M040 to 6 and Weeks remaining at ’standard’ rate/M060 to 33.
| WEEKS PAID AT EARNINGS RATE | M050 |
Use M050 to replace the number of weeks paid, at either the standard SMP rate. Payroll Active automatically updates these values each time it calculates SMP payments. Format nn
Where nn can take the value 0 to 6 for weeks remaining ’Earnings Related’ rate.
Example
The number of weeks paid at the Earnings Related rate has been increased to 2 (from 1), using M050. Since the employee is being paid SMP, you must also change the number of weeks still to be paid to 4 (from 5), using Weeks remaining at ’Earnings Related’ rate/M030:
M030 4 (from 5)
M050 2 (from 1)
Note:
- Payroll Active first sets M060 to 0, then each time it calculates SMP it automatically updates the values against M060 and:
– Weeks remaining at standard rate/M065 (page SMP-11)
- If you replace either of these numbers of weeks paid and SMP is being paid, you must replace the corresponding numbers of remaining weeks to be paid at the ’standard’ rate (using Weeks remaining at Earnings Related rate/M030).
| WEEKS TO BE PAID AT EARNING RELATED RATE FOR PAYROLL ADJUSTMENT | M055 |
Use M055 to enter the number of weeks to be paid, at the ’Earnings Relataed’ SMP rate, when an error has been made in a previous payrun.
Format
n
Where n can take a positive or negative value of 0 to 6 for weeks paid at the ’Earnings Related’ rate.
Example 1
To correct a previous error, the number of additional weeks to be paid at the ’Earnings Related’ rate is 1, and the additional pre-determined amount of SMP to be paid is £200.00:
M055 1
M705 200.00 (See Note below).
NOTE. Payroll Active automatically calculates the average earnings and also the weekly SMP standard rate in accordance with DWP rules. For the 2024/2025 tax year, the weekly ’standard’ rate will not exceed £184.03. Therefore the correct entry is:
M705 22222
NOTE. 90% of £222.22 is £200.00.
Example 2
To correct a previous error, the number of weeks for which SMP is to be recovered is 1 at the ’Earning Related’ rate, and the pre-determined amount to be recovered is £200.00:
M065 -1
M705 -20000
Note:
- To pay SMP weeks for payroll adjustment, you must also enter the pre-determined amount, using Positive pre-determined SMP payment/M705.
- To recover an amount of SMP already paid, enter a negative number of weeks to be paid against M055, and a negative amount against Positive pre-determined SMP payment/M705.
- The pre-determined amount entered against Positive pre-determined SMP payment/ M705 is automatically held as an increase for this payrun only, against SMP increase/ M701, or as a decrease for this payrun only, against SMP decrease/ M702.
- When you enter positive or negative weeks against M065, Payroll Active automatically updates the values held against:
- Weeks remaining at Earnings Related rate/M030
- Weeks paid at Earnings Related rate/M050
- The SMP paid in the current tax year, held against SMP total paid in current tax year/ M708 is automatically increased (or decreased) by the pre-determined amount entered against Positive pre-determined SMP payment/M705.
- If as a result of payroll adjustment, the number of weeks paid exceeds 39, Payroll Active prints SMP WEEKS EXCEEDS LIMIT on the Exception Report.
- The SMP adjustment will be printed on a separate payslip.
- You can reverse all payments made in the previous payrun (using Previous period reversal/E072).
- You can also correct errors made in a previous payrun by using Negative predetermined SMP payment/M706 to recover SMP, but it will not be a payroll adjustment. A separate payslip is not produced and you cannot reverse the previous period’s payment.
| WEEKS PAID AT STANDARD RATE | M060 |
Use M060 to replace the number of weeks paid, at either the standard SMP rate. Payroll Active automatically updates these values each time it calculates SMP payments. Format nn
Where nn can take the value 0 to 33 for weeks remaining ’standard’ rate.
Example
The number of weeks paid at the standard rate has been increased to 14 (from 13), using M040. Since the employee is being paid SMP, you must also change the number of weeks still to be paid to 6 (from 7), using Weeks remaining at ’standard’ rate/M060:
M060 14 (from 13)
M0654 6 (from 7)
Note:
- Payroll Active first sets M040 to 33, then each time it calculates SMP it automatically.
- If you replace either of these numbers of weeks paid and SMP is being paid, you must replace the corresponding numbers of remaining weeks to be paid at the ’standard’ rate (using Weeks remaining at standard rate/M040).
| WEEKS TO BE PAID AT STANDARD RATE FOR PAYROLL ADJUSTMENT | M065 |
Use M065 to enter the number of weeks to be paid, at the ’standard’ SMP rate, when an error has been made in a previous payrun. Format
nn
Where nn can take a positive or negative value of 0 to 33 for weeks paid at the ’standard’ rate.
Example 1
To correct a previous error, the number of additional weeks to be paid at the ’standard’ rate is 12, and the additional pre-determined amount of SMP to be paid is £184.03:
M065 12
M705 184.03 (See Note below).
NOTE. Payroll Active automatically calculates the average earnings and also the weekly SMP standard rate in accordance with DWP rules. For the 2024/2025 tax year, the weekly ’standard’ rate will not exceed £184.03. Therefore the correct entry is:
M705 20448
NOTE. 90% of £204.48 is £184.03.
Example 2
To correct a previous error, the number of weeks for which SMP is to be recovered is 1 at the’standard’ rate, and the pre-determined amount to be recovered is £184.03:
M065 -1
M705 -18403
Note:
- To pay SMP weeks for payroll adjustment, you must also enter the pre-determined amount, using Positive pre-determined SMP payment/M705.
- To recover an amount of SMP already paid, enter a negative number of weeks to be paid against M065, and a negative amount against Positive pre-determined SMP payment/M705.
- The pre-determined amount entered against Positive pre-determined SMP payment/ M705 is automatically held as an increase for this payrun only, against SMP increase/ M701, or as a decrease for this payrun only, against SMP decrease/ M702.
- When you enter positive or negative weeks against M065, Payroll Active automatically updates the values held against:
- Weeks remaining at standard rate/M040
- Weeks paid at standard rate/M060
- The SMP paid in the current tax year, held against SMP total paid in current tax year/ M708 is automatically increased (or decreased) by the pre-determined amount entered against Positive pre-determined SMP payment/M705.
- If as a result of payroll adjustment, the number of weeks paid exceeds 39, Payroll Active prints SMP WEEKS EXCEEDS LIMIT on the Exception Report.
- The SMP adjustment will be printed on a separate payslip.
- You can reverse all payments made in the previous payrun (using Previous period reversal/E072).
- You can also correct errors made in a previous payrun by using Negative predetermined SMP payment/M706 to recover SMP, but it will not be a payroll adjustment. A separate payslip is not produced and you cannot reverse the previous period’s payment.
| WEEKS EXCLUDED FROM SMP THIS PERIOD | M070 |
Use M070 to enter the number of weeks for which the employee is to be excluded from SMP payments. This applies to this payrun only.
Format nn
Where nn is the number of weeks, from 0 to 26.
Example
If the employee returns to work for 3 days during the maternity period, she loses 1 week of SMP. If the employee is on a monthly payroll and is due to receive four weeks of SMP, enter 1 against M070: M070 1 Note:
- Use M070 if the employee returns to work during the 26 week maternity period, and you wish to prevent SMP payment for a specified number of weeks.
- M070 operates for this payrun only. This means that you must use M070 in each pay period where exclusion is required.
- To exclude the employee permanently from SMP payments, set the employee’s eligibility indicator to N, using SMP eligibility indicator/M000. Unless you make the record dormant (see Dormant indicator/E067), Payroll Active may calculate a tax refund.
If the employee returns to work during the maternity period, adjust any pay and allowance records that have been set to zero for the maternity pay period.
| SMALL EMPLOYERS RELIEF APPLIES | M100 |
| SMP INCREASE THIS PAYRUN ONLY | M701 |
| SMP DECREASE THIS PAYRUN ONLY | M702 |
Use M701 or M702 to increase or decrease the SMP payment, for this payrun only.
Format ppppppppppp
Where ppppppppppp is the amount of increase or decrease, in pence, up to 11 numeric characters.
Example 1
The employee’s calculated SMP payment is increased by £45.00 for this payrun only:
M701 4500
Example 2
The employee’s calculated SMP payment is decreased by £15.00 for this payrun only: M702 1500 Note:
- The addition or subtraction from the calculated SMP payment is reflected in the SMP total paid in the current tax year (held against SMP total paid in current tax year/ M708).
- You can enter successive amounts against each of M701 and M702 in the same pay period. At the time of the payrun, Payroll Active totals the amounts against each and increases or decreases the SMP payment accordingly.
.
| AVERAGE EARNINGS REPLACEMENT | M703 |
Use M703 to replace the average earnings that Payroll Active calculates and holds against M703.
Format ppppppppppp
Where ppppppppppp is the average earnings, in pence, up to 11 numeric characters.
Example
The average earnings are set at £325.00:
M703 32500
If the ’earnings related’ rate is 90% of the average weekly pay, the employee will receive £292.50 for each of the first 6 weeks of SMP.
Note:
• Payroll Active uses the average earnings held against M703 to calculate the SMP ’earnings related’ rate, which is held against Replace ’Earnings Related’ rate/M704.
Use M703 when you do not wish Payroll Active to use the existing average earnings in the calculation of the SMP ’earnings related’ rate
| REPLACE ’EARNINGS RELATED’ RATE | M704 |
Use M704 to replace the calculated SMP ’earnings related’ rate.
Format ppppppppppp
Where ppppppppppp is the calculated weekly ’earnings related’ rate, in pence, up to 11 numeric characters.
Example
Change the ’earnings related’ rate of £325.00 (the employee’s average weekly pay (either calculated or pre-determined)), to £350.00:
M704 35000
Note:
• Use M704 when you do not wish Payroll Active to use the existing SMP ’earnings related’ rate that has been calculated from the employee’s average earnings (held against Average earnings replacement/M703).
| POSITIVE PRE-DETERMINED SMP PAYMENT | M705 |
| NEGATIVE PRE-DETERMINED SMP PAYMENT | M706 |
Use M705 or M706 to pay or recover a pre-determined SMP amount, for this payrun only. Use M705 when entering an SMP payroll adjustment.
Format ppppppppppp
Where ppppppppppp is the pre-determined SMP amount, in pence, up to 11 numeric characters. For payroll adjustment, the pre-determined amount can be positive or negative.
Example 1
The employee is to receive a pre-determined amount of £112.15 for this payrun only:
M705 11215
Example 2
The employee is to have a pre-determined amount of £37.50 recovered for this payrun only:
M706 3750
Example 3
The employee is to receive a pre-determined amount of £97.75 as a payroll adjustment:
M065 1
M705 9775
In this example, the number of weeks paid at ’standard’ is also adjusted by 1.
Example 4
The employee is to have a pre-determined amount of £155.90 recovered as a payroll adjustment:
M065 -1
M705 -15590
In this example, the number of weeks recovered is 1 at the ’standard’ rate.
Note:
- Use M705 and M706 when Payroll Active is unable to calculate average pay, or Payroll Active has not received the employee’s SMP details in time to calculate payments.
- Use M705 in conjunction with Weeks to be paid at standard rate for payroll adjustment/M065 to enter pre-determined amounts of SMP to be paid or recovered.
- If you enter pre-determined SMP payments, other than for payroll adjustments, you must enter these payments throughout the period of payment and not revert to automatic calculation.
- As with calculated SMP payments, the net amount held against M705 and M706 is added to the tax year-to-date total SMP paid (held against SMP total paid in current tax year/M708)
.
| SMP TOTAL PAID IN CURRENT TAX YEAR | M708 |
Use M708 to replace the total amount of SMP paid in the year to-date, which Payroll Active calculates and holds against M708.
Format ppppppppppp
Where pppppppppppp is the total SMP amount paid, in pence, up to 11 numeric characters.
Example
The employee has received a total of £945.00 in SMP payments during the current tax year: M708 94500
Note:
- At the end of each tax year, SDworx-pay prints the total SMP payments made to the employee on the EOY Reconciliation, after which it sets the amount to zero.
Payrises and SMP under the Alabaster Rule
Please note that as the increase is considered a pay rise, for those whose Average Earnings period up to the end of the Maternity Leave period cross the rise point, then the Alabaster rules apply and there may be a need to apply an uplift for SMP payments to reflect this pay rise.
The automated SMP calculations will apply any applicable rise if the rise is notified using the required rise value.
So how is an alabaster rise applied?
The pay engine needs to be told about the rise. This can be expressed as a percentage or cash increase or a new rate to reflect the rise. The automated SMP calculation then takes care of the SMP back-payment and any future payments due.
There are 3 options to apply a relevant rise for automated adjustment:
| Engine code | Description |
|---|---|
| M741 | Increase by a cash amount the Average Earnings used for SMP |
| M743 | Increase by a percentage the Average Earnings used for SMP |
| M745 | Update the Average Earnings used for SMP |
So, if the payroll is notified of the pay rise amounts using any of these engine codes, a recalculation of SMP will take place. This rise can be applied before, during or after SMP has commenced.
Please note that automated calculations are dependent on the user utilising the compliant automated calculations and not overriding SMP payments with alternate pre-determined amounts.
Last updated 2/1/2025