Average Weekly Earnings & Statutory Maternity Pay (SMP) Calculator

What are the average weekly earnings rules used for calculating statutory maternity pay?

The average weekly earnings rules used for calculating statutory maternity pay (SMP) are a specific set of regulations in the UK designed to determine how much statutory pay a pregnant employee is entitled to. This calculation is crucial because the first six weeks of SMP are directly based on 90% of your Average Weekly Earnings (AWE). This system ensures that your maternity pay is a fair reflection of your recent income. This calculator is designed for employees and employers in the UK to accurately forecast SMP entitlement based on these rules. Understanding your AWE is the first and most important step in planning your finances for maternity leave.

The Formula for Average Weekly Earnings (AWE)

The core of calculating SMP entitlement lies in first determining the Average Weekly Earnings. The formula itself is straightforward, but the complexity comes from defining the ‘Relevant Period’.

AWE Formula:

AWE = Total Gross Earnings in Relevant Period / Number of Weeks in Relevant Period

The ‘Relevant Period’ is a specific 8-week timeframe based on your pay schedule, ending on the last normal payday on or before the ‘Qualifying Week’ (the 15th week before the expected week of childbirth). For employees paid monthly, the calculation uses the gross pay from the last two months. For those paid weekly, it’s the gross pay from the last eight weeks.

Calculation Variables Explained

Variable	Meaning	Unit	Typical Range
Total Gross Earnings	All earnings subject to National Insurance contributions within the relevant period. This includes salary, bonuses, and overtime.	Currency (£)	Varies by employment
Relevant Period	The specific period over which earnings are assessed. Typically 8 weeks.	Weeks / Months	8 weeks or 2 months
Average Weekly Earnings (AWE)	The resulting average used to calculate the first 6 weeks of SMP.	Currency (£)	Must be above the Lower Earnings Limit (£123/week for 2024/25) to qualify for SMP.

Practical Examples

Example 1: Monthly Paid Employee

An employee is paid monthly. Her qualifying week ends on September 15th. Her last two paydays before this were August 28th (£2,500 gross) and July 28th (£2,500 gross).

• Inputs: Total Gross Pay = £5,000
• Units: Monthly pay frequency
• Calculation:
  1. Total Pay: £5,000
  2. Multiply by 6 to get an annual equivalent: £5,000 * 6 = £30,000
  3. Divide by 52 to get AWE: £30,000 / 52 = £576.92
• Results: AWE is £576.92. Her first 6 weeks of SMP will be 90% of this, which is £519.23 per week.

Example 2: Weekly Paid Employee with a Bonus

An employee is paid weekly. Her relevant period is the 8 weeks between October 12th and December 6th. During this time, she earned her standard £400/week plus a one-off £800 bonus paid in November.

• Inputs: Total Gross Pay = (8 weeks * £400) + £800 = £4,000
• Units: Weekly pay frequency
• Calculation:
  1. Total Pay: £4,000
  2. Divide by 8 weeks: £4,000 / 8 = £500
• Results: AWE is £500. Her first 6 weeks of SMP will be 90% of this, which is £450 per week. The bonus significantly increased her average weekly earnings rules used for calculating statutory maternity pay.

How to Use This Average Weekly Earnings Calculator

Using this calculator is simple and provides an accurate estimate of your SMP entitlement.

1. Select Pay Frequency: Choose whether you are paid weekly or monthly. The calculator adapts the helper text based on your selection.
2. Enter Relevant Period End Date: Input the date of your last payday before or on the Saturday of your qualifying week.
3. Enter Total Gross Pay: Enter the total gross earnings you received during the relevant period (last 2 months’ pay for monthly, last 8 weeks’ pay for weekly).
4. Calculate: Click the “Calculate” button. The tool will instantly display your Average Weekly Earnings (AWE) and the two different rates of SMP you are entitled to.
5. Interpret Results: The primary result shows your AWE. The intermediate results break down the weekly payment for the first 6 weeks and the subsequent 33 weeks. The bar chart provides a clear visual comparison.

Key Factors That Affect Average Weekly Earnings

Several factors can influence the average weekly earnings rules used for calculating statutory maternity pay. Understanding them is key to accurate financial planning.

• Bonuses: A bonus paid during the 8-week relevant period can significantly increase your AWE and, therefore, your SMP for the first 6 weeks.
• Overtime: Like bonuses, any overtime pay received during the relevant period is included in the AWE calculation.
• Pay Rises: If you receive a pay rise that takes effect before the end of your maternity leave, your SMP may need to be recalculated.
• Salary Sacrifice Schemes: Participating in a salary sacrifice scheme (e.g., for pensions or childcare vouchers) reduces your gross earnings, which can lower your AWE.
• Statutory Sick Pay (SSP): Any SSP received during the relevant period is included as part of your gross earnings.
• Timing of Pay: The calculation is based on when money is *paid*, not when it is *earned*. A bonus earned outside the relevant period but paid within it will count.

Frequently Asked Questions (FAQ)

1. What is the ‘qualifying week’?

The qualifying week is the 15th week before your expected week of childbirth. It’s a key date for determining both eligibility and the calculation period for SMP.

2. What if my pay varies each week/month?

That is exactly what the AWE calculation is for. It averages out your variable pay over the 8-week period to establish a fair baseline for your SMP.

3. Do I need to be employed for a certain time to qualify?

Yes, you must have been continuously employed by your employer for at least 26 weeks up to the qualifying week.

4. What is the Lower Earnings Limit (LEL)?

To qualify for SMP, your AWE must be at or above the LEL, which is set by the government each year. For 2025/26, this is expected to be around £125 per week.

5. What happens if I don’t qualify for SMP?

If you don’t qualify for SMP, you may be eligible for Maternity Allowance from the government.

6. Is SMP taxed?

Yes, Statutory Maternity Pay is treated as earnings and is subject to Income Tax and National Insurance deductions.

7. Can I work while receiving SMP?

You can work up to 10 ‘Keeping in Touch’ (KIT) days during your maternity leave without losing your SMP entitlement.

8. What if I am made redundant while on maternity leave?

You are still entitled to receive your full SMP entitlement even if your employment ends after the qualifying week. There are also additional redundancy protections for employees on maternity leave.