SMP tax?

It depends how much you’ve already earnt in the tax year I think and whether you’ve used up your personal allowance. That’s my understanding anyway

Sophie’s right. It’s considered as your normal income, subject to 20% tax and national insurance after personal allowance has been deducted. Not sure about child benefit

Both Jing and Sophie are spot on. Child benefit requires birth certificate of the baby so claim as soon as baby is registered and it can take 16 weeks to come through but will be backdated till baby's birth and is paid every 4 weeks xx

@Jing @Sophie Oh my goodness still 20% taxed when that’s the only income coming in that’s madness! The tax year starts in April doesn’t it? So I wouldn’t have earnt anything this month only my Holiday allowance for this year I was paid for this month, which I used to take off before baby is born, then next month SMP starts with the 90% for 6 weeks first.

But because the maternity pay is so low it might not take you over the personal allowance threshold for quite some time

The standard employee personal allowance for the 2023 to 2024 tax year is: £242 per week. £1,048 per month. £12,570 per year. If your income is solely the SMP of £172.48 per week, then you won't be paying tax, unless your other payments take you over the taxable threshold of £12,570.

@Stephanie Yes my income will be only SMP, that’s what I thought because i won’t be earning over the threshold (unless they could child benefit but even with that I’m sure it wouldn’t be over?) I’m not sure what employee personal allowance is.

Everyone has a personal allowance of £12,570 they can earn in a year without being taxed on it. You then get taxed on anything you earn above that. So if you’d already earnt that before starting mat leave then your mat pay would be taxed.

@Sophie Tax year I believe only starts in April so I wouldn’t haven’t earnt much in this coming tax year as it’s only been a few weeks, so that’s good to know I shouldn’t therefore be taxed on SMP which starts in May. Thank you

I mean I’m on SMP now and mine started in the new tax year. Currently on my 90% and that’s still subject to tax, NI and pension. Am assuming when it drops to the lower figure, I’ll either get that tax refunded on my pay or have to claim it back in the following tax year unless I go back to work during this current tax years

These two pages from UK gov website are super helpful in helping you decide if you need to pay tax. Tax-free and taxable state benefits State benefits that are taxable: https://www.gov.uk/income-tax/taxfree-and-taxable-state-benefits Work out if you need to pay Income Tax: https://www.gov.uk/income-tax/find-out-if-you-need-to-pay-income-tax To note: maternity allowance is tax free but statutory maternity pay is not. This is also a super helpful tax calculator which has helped me budget over my maternity leave: https://www.thesalarycalculator.co.uk/salary.php Hope this helps 🌻