Reclaim SMP from HMRC: Employer Guide for 2026/27

Employers can reclaim SMP from HMRC through their payroll reporting. Most employers can recover 92% of the Statutory Maternity Pay they pay, while employers that qualify for Small Employers’ Relief can recover 109% in 2026/27.

Small Employers’ Relief normally applies where the employer’s relevant Class 1 National Insurance liability was £45,000 or less. The reclaim is reported to HMRC through an Employer Payment Summary (EPS).

You can claim back most of the Statutory Maternity Pay (SMP) you pay to your employees from HMRC. This means your business can recover up to 92% of the costs, and sometimes more if you qualify for Small Employers’ Relief. Understanding how to make this claim can save your company significant money.

If you employ someone who is on maternity leave, you don’t have to carry the full financial burden. HMRC allows employers to reclaim these payments by following a clear process through your payroll system and submitting the right information. Knowing the details makes the process straightforward and helps you avoid missing out on these refunds.

How Much Statutory Maternity Pay Can an Employer Reclaim?

The 109% rate represents 100% recovery of the statutory payment plus 9% compensation for qualifying small employers.

Understanding Maternity Pay and Leave

You have the right to time off work and financial support when having a baby, but the type and amount of pay depends on certain rules. Knowing how maternity pay works, who can get it, and how it’s different from other benefits helps you plan ahead.

What Is Statutory Maternity Pay?

Statutory Maternity Pay (SMP) is money your employer must, by law, pay you if you qualify and take maternity leave. It lasts for up to 39 weeks.

Statutory Maternity Pay can be paid for up to 39 weeks. For the first 6 weeks, an eligible employee receives 90% of their average weekly earnings. For the remaining 33 weeks in 2026/27, SMP is £194.32 per week or 90% of average weekly earnings, whichever is lower.

Your employer usually pays SMP through your normal payroll and may reclaim most of the cost from HMRC. SMP is a key financial support during your maternity leave.

Eligibility Criteria for Maternity Leave

For Statutory Maternity Pay in 2026/27, the employee must normally earn at least £129 a week on average and have been continuously employed by the employer for at least 26 weeks continuing into the qualifying week, which is the 15th week before the expected week of childbirth.

Your average weekly earnings must meet the Lower Earnings Limit set by the government, which changes each year.

You must inform your employer by the 15th week before your baby is due and provide your due date proof, such as a maternity certificate. This helps your employer plan your leave and pay correctly.

Difference Between Statutory Maternity Pay and Maternity Allowance

If you don’t qualify for SMP, you may be able to claim Maternity Allowance instead. This is paid by the government, not your employer, and usually lasts up to 39 weeks.

Maternity Allowance is available to women who have recently worked but don’t meet the SMP work or earnings rules. The payment is usually a flat rate (£172.48 per week or 90% of your average weekly earnings if less) for up to 39 weeks.

Use SMP if you are employed and meet criteria, otherwise, Maternity Allowance could be your option if you’re self-employed or recently left a job. Both support you financially during maternity leave. For more on reclaiming SMP.

When and Why HMRC May Require Repayment

HMRC may ask you to repay statutory maternity pay if errors occur or rules are not followed correctly. Understanding their reasons helps you avoid mistakes and ensures your records stay accurate.

Common Reasons for Overpayment

Repayment requests often arise when you’ve been paid more than you were entitled to. This can happen if:

• Incorrect information was reported through your PAYE or RTI submissions.
• You continued statutory maternity pay after the employee returned to work.
• You claimed for weeks before a qualifying period began.

HMRC regularly checks submitted payroll data and cross-references it with employee status. Overpayments can occur if records are not updated promptly or if entitlement rules change during the pay period.

You should keep clear, accurate payroll records and update HMRC via RTI as soon as you know circumstances have changed. Doing this reduces risks of overpayment and the need to repay.

This should not be confused with an employee simply deciding not to return to work after maternity leave. Statutory Maternity Pay does not normally become repayable merely because the employee does not return to work, although separate contractual rules may apply to enhanced maternity pay.

Compliance and HMRC Regulations

HMRC strictly enforces rules on statutory maternity pay claims to maintain fairness and prevent abuse. If you do not comply with their requirements, repayments are likely.

You must submit accurate reports using the PAYE system and meet eligibility conditions outlined by HMRC. Failing to follow the rules or missing deadlines increases chances of errors in payments.

HMRC also requires that any recoverable statutory payments are claimed correctly within the right timeframes. If you are a small employer, special relief rules may apply, but these too have conditions you must meet.

Non-compliance can lead not only to repayment demands but also to penalties or interest charges on overpaid amounts. It’s essential you keep your payroll compliant and review your claims regularly to avoid issues.

Claiming Back Maternity Pay: Step-by-Step Guide

To reclaim SMP from HMRC, employers calculate the statutory payment through payroll, report the employee’s pay correctly through Real Time Information and include the statutory payment recovery amount on an Employer Payment Summary.

You can reclaim most or all of the Statutory Maternity Pay (SMP) you have paid to your employee from HMRC. The process involves confirming eligibility, providing proof of pregnancy, and submitting payment details through the correct payroll channels.

Initiating the Maternity Pay Reclaim Process

Start by checking if your business qualifies for Small Employers’ Relief, which lets you reclaim 103% of SMP paid. You need to be registered as an employer with HMRC and use payroll software that supports Real Time Information (RTI) submissions.

Use HMRC’s Basic PAYE Tools or commercial payroll software to add the SMP reclaim. You enter the amount you paid and record it as a recoverable amount. Be careful to only claim what you have actually paid to employees. This step starts your repayment claim so you must ensure your payroll data is accurate.

Required Documentation and Proof of Pregnancy

You must keep valid proof of pregnancy to support your claim. Ask your employee for an MAT B1 certificate issued by their midwife or doctor. This document confirms the pregnancy and expected birth date.

Store the MAT B1 securely with your payroll records as HMRC may request it during a review. Keeping this proof ready helps avoid delays in repayment. Without it, HMRC can reject your SMP reclaim request, which could cause you to cover the full costs yourself.

Submitting an Employer Payment Summary

Employers reclaim Statutory Maternity Pay by including the recoverable statutory payment amount in an Employer Payment Summary (EPS) sent to HMRC through payroll software. The EPS allows HMRC to reduce the PAYE and National Insurance amount the employer would otherwise need to pay.

If statutory payments cannot be fully set against current-year PAYE liabilities, different repayment arrangements may apply. Employers should keep payroll records supporting the SMP paid and the amount reclaimed.

Without submitting an EPS with the reclaim, HMRC will not process your repayment. Your payroll software will guide you through completing the EPS, or you can use the Basic PAYE Tools software if you do payroll manually.

Remember to submit the EPS even if you have no other payments or deductions that pay period. This keeps your records up to date and ensures your SMP repayment claim progresses smoothly.

Understanding National Insurance Contributions and PAYE Implications

When claiming back maternity pay, you need to understand how Class 1 National Insurance contributions and PAYE processes affect your claim. These affect the amount you can recover and how you report payments to HMRC.

Handling Class 1 National Insurance Contributions

As an employer, you pay Class 1 National Insurance contributions (NICs) on statutory maternity pay (SMP). You might be able to reclaim some or all of these contributions from HMRC, depending on your business size.

You pay NICs on SMP at the usual employer rate. However, if you qualify, HMRC allows you to claim back 103% of SMP paid, including NICs, through your payroll system.

It’s important to keep accurate records of SMP and NICs. HMRC uses your National Insurance payments to calculate how much you can reclaim. If your Class 1 NICs are low or zero, because of your earnings level or business size, you may get a higher repayment.

PAYE Adjustments and Real Time Information (RTI)

You must report SMP payments and National Insurance contributions through the PAYE system in real time, using RTI. This means you notify HMRC each time you pay an employee.

Use your payroll software to include SMP in the employee’s pay submissions. This ensures HMRC calculates your NICs and adjusts your PAYE liabilities correctly.

PAYE adjustments linked to SMP are reflected in your monthly or quarterly payment to HMRC. Keeping RTI submissions accurate and timely helps you avoid delays in claiming back maternity pay.

For detailed guidance on payroll reporting and claims, see the Statutory Maternity Pay and Leave: employer guide.

Employer Responsibilities and Employee Rights

When you manage maternity pay, you must understand how to handle payments and refunds properly. You also need to follow legal rules on notices and risk assessments to protect both your business and your employees. Finally, maternity leave affects related rights like returning to work, parental leave, and sick leave.

Small Employers’ Relief and Enhanced Maternity Pay

Employers that qualify for Small Employers’ Relief can reclaim 109% of eligible Statutory Maternity Pay in 2026/27. The relief generally applies where the employer’s relevant Class 1 National Insurance liability was £45,000 or less.

The 109% recovery consists of 100% of the statutory payment plus an additional 9% compensation. Employers that do not qualify for Small Employers’ Relief can normally reclaim 92% of eligible SMP.

If the employer offers enhanced contractual maternity pay above the statutory amount, the enhanced element is not automatically recoverable from HMRC. Recovery is based on the qualifying statutory payment.

You might also choose to offer enhanced maternity pay beyond the statutory minimum. Even if you do this, you can still claim the SMP portion from HMRC. Make sure you keep accurate records of the maternity payments you make and the claims you submit.

Can an Employer Get SMP Funding in Advance?

Yes. If an employer cannot afford to make Statutory Maternity Pay before recovering it through PAYE, they can apply to HMRC for statutory-pay funding in advance.

An application can normally be made up to 4 weeks before the employer wants the first advance payment. Employers receiving advance funding must still send an Employer Payment Summary for each pay period in which statutory payments are reclaimed.

Notice Periods and Risk Assessment

You must give your employee clear information about maternity leave rights and pay before she starts her leave. The employee should notify you at least 15 weeks before the baby is due, stating the expected week of childbirth and intended start date.

You are also required by law to carry out a risk assessment for pregnant employees. This ensures the workplace is safe during pregnancy. If risks are found, you may need to make adjustments or offer suitable alternative work.

Failing to follow correct notice or risk assessment rules can lead to claims for compensation or legal challenges. This protects both your employee’s health and your business compliance.

Impacts on Return to Work, Parental Leave, and Sick Leave

When your employee returns after maternity leave, she has the right to return to the same job or an equivalent role under the same terms. You must honour her employment contract fully.

Your employee can also take parental leave, shared parental leave, or paternity leave if eligible. These leave types allow caring time after the baby’s birth and have their own notice rules.

If she’s unwell on returning, statutory sick pay and sick leave rights apply as usual. You should treat maternity-related absences fairly in line with your business policies and legal standards. This ensures smooth transition back to work and maintains good employer-employee relationships.

Claim Back Statutory Maternity Pay from HMRC Accurately to Protect Your Business Cash Flow

Reclaiming Statutory Maternity Pay (SMP) from HMRC is essential for managing cash flow, but errors in payroll reporting or incorrect submissions can lead to delays or underclaims. At Cigma Accounting, employers across Kingston upon Thames, including Surbiton and Berrylands, are supported in ensuring SMP is calculated correctly and reclaimed through PAYE in line with HMRC rules. Working with a payroll services London provider helps you recover the right amount efficiently while maintaining full compliance.

From offsetting SMP against PAYE liabilities to claiming Small Employers’ Relief where applicable, accurate payroll handling is critical to avoid financial gaps or compliance issues. Cigma Accounting, with physical offices across London, provides expert payroll compliance services London designed to help businesses reclaim maternity pay correctly, maintain accurate reporting, and manage payroll obligations with confidence.

CASE STUDY: How to Reclaim SMP from HMRC Using Small Employers’ Relief

Priya, a small business owner, visited our Wimbledon office after arranging Statutory Maternity Pay for an employee. She understood that SMP had to be paid through payroll but was unsure how much the business could recover from HMRC and whether the reclaim would affect its monthly PAYE payments.

We reviewed the company’s payroll records and relevant Class 1 National Insurance liability. The business met the conditions for Small Employers’ Relief, allowing it to reclaim 109% of qualifying Statutory Maternity Pay for 2026/27, rather than the standard 92% available to most employers.

To explain the difference, we used an illustrative £5,000 SMP payment:

• SMP paid to the employee: £5,000

• Standard employer recovery at 92%: £4,600

• Small Employers’ Relief recovery at 109%: £5,450

We explained that the additional 9% provides statutory compensation for qualifying small employers. Priya also learned that the recovery must be reported through an Employer Payment Summary (EPS), while the employee’s SMP continues to be processed through payroll and reported under Real Time Information.

Because maternity payments could affect the company’s cash flow, we discussed HMRC’s advance funding arrangements and the importance of keeping accurate payroll and MATB1 records.

Priya left with a clearer understanding of how to reclaim SMP from HMRC, apply the correct recovery percentage and manage maternity payments without overlooking payroll reporting responsibilities.