As an independent contractor working with an umbrella company, you enjoy flexibility and independence. However, it’s essential to understand the statutory benefits you’re entitled to, such as maternity pay, paternity pay, and sick pay.
Statutory Maternity Pay (SMP)
Statutory Maternity Pay is a government-regulated payment to an eligible employee for maternity leave. It ensures that mothers receive financial support while off work after giving birth. It applies to umbrella company employees who qualify for this benefit.
Eligibility
To qualify for SMP through an umbrella company, the employee must have been in a continuous employment relationship with that company for at least 26 weeks before the expected date of confinement, which falls within the first 15 weeks of pregnancy. Additionally, the average weekly earnings in the 8 weeks before the week before the birth should be at least £123 (gross) to qualify for this allowance.
Entitlement
If you qualify for SMP, you will be entitled to receive this payment for up to 39 weeks.
- First 6 weeks: 90% of your average weekly earnings.
- Next 33 weeks: £184.03 or 90% of average weekly earnings, whichever is smaller.
Such statutory maternity pay shall be subject to tax and National Insurance deductions.
How to Claim SMP
To be entitled to SMP, you must inform your umbrella company at least 28 days before you want to go on maternity leave. The employee must also produce a MATB1 form signed off by a medical practitioner or midwife proving the pregnancy.
Other Considerations
- If SMP is unavailable, Maternity Allowance can be claimed through the local Jobcentre Plus office.
- A premature birth or stillbirth occurring after the 24th week of pregnancy is still allowed SMP eligibility.
Statutory Paternity Pay (SPP)
It is a state benefit that gives entitled employees the right to go on paid leave following the birth or adoption of their child. SPP will enable the father or the partner of the mother to have paid leave from work to be with the baby following the delivery or adoption.
Eligibility
- Must be a father or mother-to-be or the partner of the mother.
- Must have worked continuously with the umbrella company for 26 weeks by the 15th week of pregnancy.
- Must earn an average of at least £123 a week before tax.
Entitlement
- SPP allows for 1 or 2 consecutive weeks of leave.
- The salary is £184.03 a week or 90% of average weekly earnings, whichever is lower.
- SPP is subject to tax and National Insurance deductions.
Application Process
- Notify your umbrella company at least 28 days before you intend to go on paternity leave.
- When the baby is born, please notify us of the expected date of childbirth and the actual date of birth.
- If you cannot qualify for SPP, your umbrella company must complete the SPP1 form regarding ineligibility conditions.
Statutory Sick Pay (SSP)
Statutory Sick Pay is a statutory payment that employers must pay to employees in the case of sickness that prevents them from working. This basic income ensures that workers are not left with a loss during their days off due to illness.
Eligibility Criteria
- Must be classified as an employee and have worked for some time in the preceding 28 days.
- Must be ill for at least four consecutive days (non-working days included).
- Must earn, on average, at least £123 (gross) per week.
Entitlement
Statutory Sick Pay will be at a rate of £99.35 for a maximum of 28 weeks, subject to tax and National Insurance deductions.
Application Process
- Notify your umbrella company within seven days of the first day off sick.
- Provide your doctor’s note if you are off sick for over seven days.
Additional Considerations
- There are waiting days for 3 days. SSP begins from the fourth day of your sickness; the first 3 days are considered waiting days and are unpaid.
- If you have already received Statutory Maternity Pay, you will not be eligible for SSP simultaneously.
Whatever the situation—maternity, paternity, or sickness pay—being informed will enable you to utilize any advantages that might come your way. Always seek advice from your umbrella company’s HR department or contact a professional for any specific situations to confirm that you are receiving the support to which you are entitled.
By remaining informed and proactive, you can work confidently and be secure in knowing you are protected and supported throughout various life events.
