"SMP monthly" doesn't refer to a specific type of Statutory Maternity Pay (SMP), but rather describes how the calculation of SMP is adapted when an employee receives their wages on a monthly basis. The core calculation of SMP depends on an employee's average weekly earnings (AWE), and the method for determining this AWE differs slightly depending on how frequently the employee is paid.
For employees who are paid monthly, the period used to calculate their average weekly earnings for SMP purposes is typically the last two monthly pay days received before the end of their Qualifying Week. The Qualifying Week is the 15th week before the expected week of childbirth.
Calculating Average Weekly Earnings for Monthly Paid Employees
To determine the average weekly earnings (AWE) for someone paid monthly, follow these steps based on the relevant two months' gross pay:
- Find Gross Earnings: Identify the gross earnings from the last two monthly pay days before the end of your Qualifying Week.
- Add Earnings: Sum the gross earnings from these two months.
- Average Monthly: Divide the total by 2 to get the average monthly earnings.
- Annual Equivalent: Multiply the average monthly earnings by 12 to find the annual equivalent.
- Average Weekly: Divide the annual equivalent by 52 (the number of weeks in a year) to arrive at the average weekly earnings.
Here’s a breakdown of the calculation process:
SMP Average Weekly Earnings Calculation (Monthly Pay)
| Step | Description | Formula Example (using £X & £Y gross pay) |
|---|---|---|
| 1. Relevant Earnings | Gross pay from last two monthly pay days | £X + £Y |
| 2. Average Monthly | Sum of earnings divided by 2 | (£X + £Y) / 2 |
| 3. Annual Equivalent | Average monthly earnings multiplied by 12 | ((£X + £Y) / 2) * 12 |
| 4. Average Weekly | Annual equivalent earnings divided by 52 | (((£X + £Y) / 2) * 12) / 52 |
This calculated average weekly earnings figure is then used to determine the amount of SMP the employee is entitled to, which is generally paid at a higher rate for the first six weeks and a standard rate for the remaining period (up to 39 weeks in total), provided they meet all other eligibility criteria.
