Last updated: 16 October 2026
The question
When an employee on maternity leave gets a pay rise, we know we must recalculate her average weekly earnings as if she had been on the higher salary when SMP was first worked out. Does the same apply to someone on adoption leave or other family leave?
The rule for SMP
Statutory Maternity Pay (SMP) is based on average weekly earnings (AWE) in a set period of eight weeks before the qualifying week. HMRC’s SMP guidance on gov.uk says that if a pay rise takes effect at any time between the start of the eight-week relevant period and the end of statutory maternity leave, you must recalculate AWE as if the rise had applied from the start of the relevant period, and pay any extra SMP due. This applies even if the rise is awarded after the leave starts.
Does it apply to other statutory payments?
Not in the same way. For Statutory Adoption Pay, Statutory Paternity Pay, Statutory Parental Bereavement Pay and Statutory Neonatal Care Pay, HMRC’s Statutory Payments Manual (SPM172100) says you recalculate only if a backdated pay rise includes earnings for the relevant period used in the calculation. A rise that takes effect after the relevant period, during adoption or paternity leave, does not change the statutory pay. If a recalculation lifts AWE above the lower earnings limit, the employee may become entitled for the first time.
Statutory pay rates for 2026/27
| Payment | Rate from April 2026 |
| SMP and SAP, first 6 weeks | 90% of AWE |
| SMP and SAP, next 33 weeks | £194.32 or 90% of AWE if lower |
| SPP and ShPP | £194.32 or 90% of AWE if lower |
| SSP | £123.25 or 80% of AWE if lower |
Worked example
Kate earns £3,000 a month. Her AWE in the set period is £692.31, so she gets £623.08 a week for six weeks (90%). In month three of her leave, a 5% pay rise is agreed for all staff, backdated to a date within her set period. Her AWE rises to £726.92. Her first six weeks should have been £654.23 a week, so you owe her an extra £31.15 a week for six weeks (£186.90). The later weeks are paid at the flat rate of £194.32, so they do not change.
Reclaiming statutory pay
You can reclaim 92% of SMP, SAP, SPP and ShPP through your Employer Payment Summary. Small employers, whose Class 1 National Insurance was £45,000 or less in the previous tax year, can reclaim 109%. Include any extra payments from a recalculation in the reclaim.
Contractual pay
Many employers pay enhanced maternity or adoption pay. Check whether your policy also requires a recalculation. Employees on leave must not be treated less favourably on pay rises.
Keeping records
Keep a note of the set period, the earnings used, any recalculation and the date the pay rise was agreed. HMRC can check statutory payments and reclaims in a PAYE compliance review, and you must keep payroll records for at least three years after the end of the tax year.
Frequently asked questions
What if the pay rise starts after the set period?
For SMP, you still recalculate if it takes effect before the end of statutory maternity leave. For SAP and SPP, AWE does not change unless the rise is backdated into the relevant period.
Does a bonus count?
Yes, if it is paid in the set period or is backdated into it.
How do I correct payroll?
Pay the arrears in the next pay run and adjust the EPS reclaim.
Can an employee lose SMP because of low earnings?
Yes, if AWE is below the lower earnings limit; a recalculation can sometimes lift them above it.
Related: maternity leave SMP reclaims, full pay for pregnant employees and paternity leave help.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with statutory pay calculations. See our payroll services service, or contact us for a free, no-obligation quote.
This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 16 October 2026. It is not personal advice, so speak to an accountant about your own situation.
