HMRC has updated the guidance on statutory maternity pay (SMP) to clarify details on how to calculate average weekly earnings (AWE)
AWE must include all earnings on which Class 1 NICs are due, or would be due if they were high enough. SMP entitlement depends on the employee’s AWE in the ‘relevant period’.
The AWE must be:
- £111 or more for tax year 2014 to 2015; and
- £112 or more for tax year 2015 to 2016.
Divide all earnings paid in that relevant period by the number of days, weeks or months in that period.
The relevant period is usually the eight-week period before the qualifying week, which would end on the the last normal payday on, or before the Saturday of the qualifying week.
The latest HMRC guidance on AWE is available here