How is statutory maternity pay calculated if the employee is on sick pay during the calculation period?
An employee's statutory maternity pay (SMP) entitlement is calculated in accordance with their weekly earnings during the period of eight weeks that immediately precede the 14th week before their expected week of childbirth. It is the employee's actual earnings during this eight-week calculation period that are used to work out entitlement to SMP. If the employee's pay was reduced during this period due to the fact that they were absent from work because of sickness, the calculation will be based on their reduced pay rather than the amount they would normally have received. The amount of higher-rate SMP due will be reduced accordingly, or they may not be entitled to SMP.
An employee may gain or lose, depending on the circumstances. For example, if an annual bonus was paid during those eight weeks, this will have to be taken into account when calculating the amount of higher-rate SMP due to the employee.