SMP can start from: - The 11th week before your due date (at the earliest), OR - The day after childbirth if the baby arrives early You can choose your start date within this window, but SMP automatically starts if you're off work for a pregnancy-related illness in the 4 weeks before your due date.

Maternity and Paternity Pay for Company Directors: Your Complete UK Guide

As a limited company director, you might assume maternity and paternity pay is only for employees of larger companies. Not true. Directors can absolutely claim Statutory Maternity Pay (SMP) and Statutory Paternity Pay (SPP) from their own company - but only if they meet specific qualifying criteria.

The critical factor: Your salary level matters enormously. Pay yourself too little, and you'll fail the earnings test. Get the planning right, and you can receive up to £13,697.19 in Statutory Maternity Pay - all reclaimable from HMRC.

Can Directors Claim Statutory Maternity Pay?

Yes, directors can claim SMP. As a company director, you're employed by your company (even if you own 100% of the shares). This employment relationship means you're entitled to the same statutory benefits as any other employee - provided you meet the qualifying conditions.

The key difference for directors is that you control your own salary. This is both an opportunity and a risk:

Opportunity: You can plan your salary to ensure you qualify
Risk: If your salary is set too low for tax efficiency, you may not meet the earnings threshold

The Two Core Requirements for SMP

To qualify for Statutory Maternity Pay, you must satisfy both tests:

Requirement	Threshold	What It Means
Continuous employment	26 weeks	Must be employed by your company for at least 26 weeks by the end of the 15th week before your due date
Average weekly earnings	£123 per week	Average weekly earnings must be at least £123 during the 8-week "relevant period"

Let's break down each requirement in detail.

The 26-Week Employment Test

You must have been continuously employed by your limited company for at least 26 weeks by the Qualifying Week - this is the 15th week before your expected week of childbirth.

How to Calculate the Qualifying Week

Example: If your baby is due on 15 September 2026:

Expected week of childbirth starts: Sunday 13 September 2026
Count back 15 weeks: Week starting Sunday 31 May 2026
You must have 26 weeks employment by end of 31 May - 6 June 2026 week
Count back 26 weeks from there: You must have been employed since at least early December 2025

For most established directors, the 26-week test is easily met. However, if you've recently incorporated your company or recently became a director, you'll need to verify your employment start date carefully.

What Counts as Continuous Employment?

For directors, continuous employment typically starts from:

The date you were appointed as a director, OR
The date you started being paid a salary through PAYE

If you incorporated your company 12+ months before your due date and have been taking any salary, you'll almost certainly meet this test.

The Earnings Test: Why Your Salary Matters

This is where many directors fail. The earnings test requires your average weekly earnings to be at least £123 during the 8-week "relevant period" before the Qualifying Week.

Understanding the Relevant Period

The relevant period is the 8 weeks ending with the last normal payday on or before the Saturday of the Qualifying Week.

Example calculation:

Step	Date/Period
Baby due date	15 September 2026
Qualifying Week	Week starting 31 May 2026
Saturday of Qualifying Week	6 June 2026
Last normal payday on or before 6 June	31 May 2026 (if paid monthly)
Relevant period	8 weeks ending 31 May 2026 = 5 April to 31 May 2026

During this 8-week period, your average weekly earnings must be at least £123.

The Minimum Salary for SMP Eligibility

To meet the £123 per week threshold over 8 weeks:

Pay Frequency	Minimum Earnings in Relevant Period	Annual Equivalent
Weekly	£123 per week	£6,396
Monthly	£533.33 per month	£6,400
Annual (single payment)	Not recommended - timing critical	N/A

Key point: If you're taking the tax-efficient salary of £12,570 (or even £9,100), you easily exceed the £6,396 annual threshold needed for SMP. Problems arise when directors take very low or irregular salaries.

Common Earnings Test Failures

Scenario	Weekly Average	SMP Eligible?
£12,570 annual salary, paid monthly	£241.73	Yes
£9,100 annual salary, paid monthly	£175	Yes
£6,725 annual salary (LEL), paid monthly	£129.33	Yes
£5,000 annual salary, paid monthly	£96.15	No
Dividends only, no salary	£0	No
Irregular salary (£3,000 in Jan, nothing else)	Depends on timing	Maybe

Warning: Dividends do not count towards the earnings test. Only salary processed through PAYE counts.

Planning Ahead: Ensuring You Qualify for SMP

If you're planning a pregnancy, or think you might become pregnant, forward planning is essential.

12-Month Planning Checklist

Timeframe	Action
12+ months before due date	Ensure you're registered as an employee via PAYE
12+ months before due date	Set salary at minimum £6,500 per year (or ideally £12,570)
9 months before due date	Verify 26-week employment requirement will be met
6 months before due date	Confirm salary payments are regular and documented
4 months before due date	Check relevant period dates for earnings test
15 weeks before due date	Provide MATB1 certificate and written notice to company

What If You're Currently Taking No Salary?

If you've been extracting profits purely as dividends, you'll need to start paying yourself a salary. You need to:

Register your company as an employer with HMRC (if not already)
Set up monthly PAYE payments of at least £533.33
Ensure these payments fall within the relevant period
Maintain documentation of all salary payments

Timing example: If your due date is September 2026, and the relevant period is April-May 2026, you need salary payments in place well before April 2026. Starting salary in January 2026 would comfortably cover this.

SMP Rates and Duration

Statutory Maternity Pay is paid for up to 39 weeks:

Period	Rate	2025/26 Amount
Weeks 1-6	90% of average weekly earnings	Variable (based on your salary)
Weeks 7-39	Lower of 90% AWE or flat rate	£184.03 per week

Calculating Your Total SMP

Example: Director earning £12,570 salary (£241.73/week):

Period	Calculation	Amount
Weeks 1-6	£241.73 × 90% × 6 weeks	£1,305.35
Weeks 7-39	£184.03 × 33 weeks	£6,072.99
Total SMP		£7,378.34

Example: Director earning £50,000 salary (£961.54/week):

Period	Calculation	Amount
Weeks 1-6	£961.54 × 90% × 6 weeks	£5,192.32
Weeks 7-39	£184.03 × 33 weeks	£6,072.99
Total SMP		£11,265.31

For directors taking the tax-efficient £12,570 salary, the 90% rate (£217.56/week) is higher than the flat rate (£184.03), so you receive the 90% amount for the first 6 weeks.

When Does SMP Start?

SMP can start from:

The 11th week before your due date (at the earliest), OR
The day after childbirth if the baby arrives early

You can choose your start date within this window, but SMP automatically starts if you're off work for a pregnancy-related illness in the 4 weeks before your due date.

Statutory Paternity Pay (SPP)

Fathers and partners can claim Statutory Paternity Pay for up to 2 weeks. The qualifying conditions are similar to SMP.

SPP Qualifying Conditions

Requirement	Threshold
Continuous employment	26 weeks by the 15th week before due date
Average weekly earnings	At least £123 per week
Relationship	Father, spouse, civil partner, or partner
Responsibility	Will have responsibility for child's upbringing

SPP Rates 2025/26

Period	Rate	Total
2 weeks	£184.03 per week (or 90% AWE if lower)	£368.06

SPP must be taken in blocks of 1 or 2 weeks within 52 weeks of the birth (from April 2024, this extended from 56 days). The 2 weeks can now be taken separately.

Shared Parental Leave and Pay

Shared Parental Leave (SPL) allows eligible parents to share up to 50 weeks of leave and 37 weeks of pay between them.

How Shared Parental Pay Works

If the mother ends her maternity leave early, the remaining entitlement can be shared:

Scenario	Mother Takes	Available to Share
Mother takes 2 weeks ML	2 weeks SMP	37 weeks ShPP + 48 weeks SPL
Mother takes 20 weeks ML	20 weeks SMP	19 weeks ShPP + 30 weeks SPL
Mother takes 39 weeks ML	39 weeks SMP	0 weeks ShPP + 11 weeks SPL

ShPP Rate

Shared Parental Pay is paid at £184.03 per week (or 90% of average weekly earnings if lower).

SPL Eligibility for Directors

Both parents must meet employment and earnings tests. For directors:

The taking parent must meet continuous employment (26 weeks) and earnings (£123/week) tests
The other parent must have earned at least £390 in any 13 weeks of the 66 weeks before due date

This flexibility can be valuable for director couples, but requires careful planning around salary levels for both partners.

What If You Don't Qualify? Maternity Allowance

If you don't meet the SMP qualifying conditions, you may be able to claim Maternity Allowance instead. This is particularly relevant for directors who:

Haven't been employed long enough (less than 26 weeks)
Have earnings below £123 per week
Recently incorporated their company

Maternity Allowance Eligibility

You can claim Maternity Allowance if, in the 66 weeks before your due date, you were:

Employed or self-employed for at least 26 weeks (not necessarily continuous), AND
Earning at least £30 per week in at least 13 of those weeks

Maternity Allowance Rates

Period	Rate
Up to 39 weeks	£184.03 per week (or 90% of average earnings if lower)
Maximum total	£7,177.17

Key difference: Maternity Allowance is claimed from the DWP, not paid by your company. Your company cannot reclaim it from HMRC.

SMP vs Maternity Allowance

Feature	SMP	Maternity Allowance
Paid by	Your company	DWP
90% rate period	First 6 weeks	None (flat rate only)
Reclaimable by company	Yes (92-103%)	No
Maximum total	~£7,378+ (depends on salary)	£7,177.17

SMP is generally more valuable, especially if your salary exceeds the flat rate threshold.

Can Your Company Pay Enhanced Maternity Pay?

Absolutely. There's no legal requirement to pay only statutory amounts. Your company can pay:

Full salary during maternity leave
Enhanced maternity pay (e.g., 100% for first 12 weeks, then SMP)
Any combination you choose

Tax Treatment of Enhanced Maternity Pay

Enhanced maternity pay is treated as salary for tax purposes:

Payment Type	Income Tax	Employee's NI	Employer's NI
SMP	Yes	Yes	Yes
Enhanced pay above SMP	Yes	Yes	Yes
Contractual maternity pay	Yes	Yes	Yes

Important: Your company cannot reclaim the enhanced portion from HMRC - only the SMP element is reclaimable.

HMRC Recovery of SMP

Your company can recover most or all of the SMP it pays:

Company Size	Recovery Rate
Small employer (NI bill under £45,000)	103% (SMP + 3% compensation)
Other employers	92%

Most director-owned companies qualify as small employers, meaning you can actually recover 3% more than you pay out in SMP.

Keeping NI Credits During Maternity Leave

Statutory Maternity Pay is subject to National Insurance, which means you continue building State Pension credits while receiving SMP.

NI Treatment of Maternity Payments

Payment	Employee's NI	Employer's NI	State Pension Credit
SMP	Yes (if above threshold)	Yes	Yes
Maternity Allowance	No	No	Yes (automatic credits)
Unpaid maternity leave	No	No	Yes (Home Responsibilities Protection may apply)

Protecting Your State Pension

During any unpaid maternity leave beyond the SMP period:

You receive NI credits automatically for the first 12 weeks after SMP ends
Child Benefit registration provides ongoing NI credits until your child is 12
These credits count towards your 35-year qualifying period

See our National Insurance for directors guide for more on protecting your State Pension.

Returning to Work: Flexible Arrangements

As a director, you have significant flexibility in how you return to work. Consider:

Phased Return Options

Arrangement	SMP Impact	Practical Considerations
Return part-time after 39 weeks	SMP ends when you return	Salary can be adjusted pro-rata
Return full-time after 26 weeks	SMP continues if "keeping in touch" days	Up to 10 KIT days allowed
Work from home during SMP	May trigger end of SMP	Be cautious about work activities

Keeping in Touch (KIT) Days

You can work up to 10 KIT days during SMP without losing your entitlement. These are useful for:

Important board meetings
Client presentations
Key business decisions
Staying connected with the company

KIT days are paid at your normal rate, and SMP continues unaffected.

Tax and NI on Maternity/Paternity Pay

Statutory payments are treated as earnings for tax and NI purposes.

Tax Calculation Example

Director receiving £7,378.34 total SMP:

Element	Amount	Tax Treatment
SMP income	£7,378.34	Taxable as employment income
Personal Allowance used	£7,378.34	Zero Income Tax if only income
NI (8% above £12,570)	£0	Below threshold

If you have other income (salary before/after maternity, dividends), your SMP forms part of your total taxable income for the year.

Dividend Planning Around Maternity Leave

Consider timing your dividend declarations carefully:

Dividends declared before maternity leave are taxable in that tax year
You may have lower total income during maternity, reducing dividend tax rates
Plan dividend extraction to optimise your overall tax position

Worked Example: Planning Salary to Qualify for SMP

Scenario: Sarah is a sole director of her limited company. She's been taking dividends only (no salary) for tax efficiency. She's now planning to start a family.

The Problem

Current salary: £0
Earnings test requirement: £123/week average
Status: Would not qualify for SMP

The Solution

Sarah needs to establish a salary before the relevant period.

Timeline (baby due September 2026):

Date	Action
January 2025	Register as employer, set up monthly salary of £1,047.50 (£12,570 annual)
January 2025 onwards	Process salary through PAYE monthly
May 2026	Relevant period begins (8 weeks before Qualifying Week)
June 2026	Qualifying Week (15 weeks before due date)
July 2026	Earliest SMP start (11 weeks before due date)
September 2026	Baby due

The Numbers

Metric	Calculation	Result
Weekly salary	£12,570 ÷ 52	£241.73
Earnings test	£241.73 vs £123	Pass
Employer's NI cost	(£12,570 - £5,000) × 15%	£1,135.50
Corp Tax relief	£12,570 × 25%	£3,142.50
Net cost of salary	£12,570 + £1,135.50 - £3,142.50	£10,563
SMP received (39 weeks)	See calculation above	£7,378.34
SMP recovery (103%)	£7,378.34 × 103%	£7,599.69

Net benefit: By establishing a £12,570 salary (net cost £10,563), Sarah receives £7,378.34 in SMP, with her company recovering £7,599.69 from HMRC - actually more than was paid out.

Common Mistakes Directors Make

1. Taking No Salary

Many directors extract profits purely as dividends for tax efficiency. While this saves NI, it means:

No SMP eligibility (dividends don't count)
No SPP eligibility for partners
No State Pension credits

Solution: Take at least £6,725 salary to maintain eligibility and pension credits.

2. Salary Below the Earnings Threshold

A salary of £5,000 falls below the £123/week (£6,396/year) requirement.

Salary	Weekly Average	SMP Eligible
£5,000	£96.15	No
£6,400	£123.08	Yes
£6,725	£129.33	Yes

Solution: Increase salary to at least £6,400 if planning for maternity.

3. Irregular Salary Payments

If you pay yourself irregularly (large amounts in some months, nothing in others), the earnings test calculation becomes complex. The relevant period might fall during a low-pay period.

Solution: Pay salary monthly in consistent amounts throughout the year.

4. Not Being Employed Long Enough

New company directors may not have 26 weeks continuous employment by the Qualifying Week.

Example: You incorporate in January 2026, baby due September 2026:

Qualifying Week: Early June 2026
26 weeks before: Early December 2025
Employment start: January 2026
Result: Fail (only ~22 weeks employment)

Solution: Plan incorporation timing around family plans, or claim Maternity Allowance instead.

5. Missing Notification Deadlines

You must notify your company (as director, yourself!) of your pregnancy by the 15th week before the due date. While this seems bureaucratic for a sole director, formal documentation protects your SMP claim.

Solution: Complete the formal notification process, including MATB1 certificate from your midwife.

Frequently Asked Questions

Can I claim SMP from my own limited company?

Yes. As a director, you're an employee of your company. If you meet the 26-week employment test and £123/week earnings test, you're entitled to SMP just like any other employee. Your company pays the SMP and can recover 92-103% from HMRC.

Do dividends count towards the earnings test for SMP?

No. Only salary processed through PAYE counts towards the £123 per week average earnings test. Dividends are not earnings for SMP purposes. If you take only dividends with no salary, you won't qualify for SMP.

What's the minimum salary needed to qualify for SMP?

You need average weekly earnings of at least £123 during the 8-week relevant period. This equates to approximately £6,400 per year. Taking the standard £12,570 director's salary easily exceeds this threshold.

How long does Statutory Maternity Pay last?

SMP is paid for up to 39 weeks. The first 6 weeks are at 90% of your average earnings. The remaining 33 weeks are at £184.03 per week (or 90% of earnings if lower). You can start SMP from 11 weeks before your due date.

Can my partner claim Statutory Paternity Pay?

Yes, if they meet the same tests: 26 weeks continuous employment and £123/week average earnings. SPP is paid for up to 2 weeks at £184.03 per week. From April 2024, the 2 weeks can be taken separately within 52 weeks of birth.

What if I don't qualify for SMP?

If you don't meet SMP requirements, you may qualify for Maternity Allowance. This requires 26 weeks of employment/self-employment in the 66 weeks before your due date (not necessarily continuous), and earning at least £30/week in 13 of those weeks. Maternity Allowance is claimed from DWP.

Can I work during maternity leave?

You can work up to 10 Keeping in Touch (KIT) days without affecting your SMP. Beyond this, returning to work ends your SMP entitlement. KIT days are useful for board meetings, client presentations, or staying connected with your business.

Does my company get the SMP money back?

Yes. Small employers (employer's NI bill under £45,000) can reclaim 103% of SMP from HMRC. Other employers reclaim 92%. Most director-owned companies qualify as small employers, so you recover more than you pay out.

How do I notify HMRC about maternity leave?

Your company should report maternity leave through RTI (Real Time Information) submissions. You'll need to provide your MATB1 certificate (from your midwife) and give written notice at least 15 weeks before your due date.

Can I take enhanced maternity pay from my company?

Yes. There's no upper limit on what your company can pay. Many directors pay themselves full salary during maternity leave. However, only the SMP portion is reclaimable from HMRC - enhanced amounts are a business expense.

How AccountsOS Helps with Maternity Planning

Planning maternity pay as a director involves complex calculations around earnings tests, qualifying periods, and optimal salary levels. AccountsOS simplifies this entire process.

Eligibility Checking

Automatic earnings test calculation based on your actual salary payments
Employment period verification from your payroll records
Real-time eligibility status showing whether you currently qualify for SMP

SMP Calculations

Ask questions in plain English:

"Do I qualify for Statutory Maternity Pay?"
"What's my projected SMP based on current salary?"
"How much would increasing my salary improve my SMP?"

AccountsOS analyses your actual payroll data and provides instant, accurate answers.

Planning Recommendations

Salary optimisation suggestions to ensure SMP qualification
Timing alerts for when to adjust salary before the relevant period
Recovery tracking of SMP reclaimed from HMRC

Documentation

Automatic record keeping of all salary payments and dates
Qualifying period calculations for your specific due date
Compliance reminders for notification deadlines

Conclusion

Maternity and paternity pay for directors isn't complicated once you understand the rules. The key points to remember:

Directors can claim SMP/SPP from their own company if they meet employment and earnings tests
Salary matters - dividends don't count towards the £123/week earnings requirement
Plan ahead - ensure salary is in place before the relevant period begins
26 weeks employment is required by the Qualifying Week (15 weeks before due date)
Companies recover 92-103% of SMP from HMRC

For most directors taking the tax-efficient £12,570 salary, SMP qualification is automatic. The risk arises when directors take very low salaries or rely purely on dividends.

If you're planning a family, review your salary arrangements now. Establishing a qualifying salary 12+ months before your due date ensures you meet all requirements without rushing.

Need help planning your maternity pay? AccountsOS tracks your eligibility automatically and alerts you to any issues before they become problems. See how it works and get started today.