Statutory Payments

Paternity Pay

You can choose to take either 1 or 2 weeks. You get the same amount of leave if your partner has a multiple birth (such as twins).

You must take your leave in one go. A week is the same amount of days that you normally work in a week - for example, a week is 2 days if you only work on Mondays and Tuesdays.

Amounts

The statutory weekly rate of Paternity Pay is £184.03, or 90% of your average weekly earnings (whichever is lower).

If you are in receipt of a director’s salary of £175.00 per week / £758.33 per month (2024/25), you will be entitled to Paternity Pay payments at £184.03 per week.

Eligibility

• be employed by your employer up to the date of birth
• earn at least £123.00 a week (before tax)
• give the correct notice
• have been continuously employed by your employerfor at least 26 weeks up to any day in the ‘qualifying week’

Paternity Pay Vs. Directors Salary

You can decide not to claim paternity pay and withdraw your usual director’s salary from the business which is slightly higher than the paternity pay.

The difference being, although paternity pay is lower, you can reclaim the payments so the company isn’t incurring a loss.

By taking the directors fee you will be entitled to more for the period of your Paternity leave but the company will make a small loss. The loss cannot be reclaimed but will instead be absorbed by the company profits.

Maternity Pay

Statutory Maternity Leave is 52 weeks. It’s made up of:

• Ordinary Maternity Leave - first 26 weeks
• Additional Maternity Leave - last 26 weeks

You do not have to take 52 weeks but you must take 2 weeks’ leave after your baby is born (or 4 weeks if you work in a factory).

Amounts

Statutory Maternity Pay (SMP) is paid for up to 39 weeks. You get:

• 90% of your average weekly earnings (before tax) for the first 6 weeks
• £184.03 or 90% of your average weekly earnings (whichever is lower) for the next 33 weeks

Eligibility

To qualify for SMP you must:

• earn on average at least £123.00 a week
• give the correct notice
• give proof you’re pregnant
• have worked for your employer continuously for at least 26 weeks continuing into the ‘qualifying week’ - the 15th week before the expected week of childbirth

Maternity Pay Vs. Directors Salary

Given the length of time you will be receiving Maternity Pay, it may not be financially viable to continue to take a salary. If you would rather continue to take a salary from your company and have enough reserves, there will be no reason why this cannot be done.

We would advise that Champion prepare a reconciliation for your company before any decision is made which will reflect surplus funds available to you.

Summary

It is important that you contact a Champion advisor as soon as you are aware that you will require either Paternity or Maternity Pay so we can discuss your options.

Contact Us

For more information and advice simply request a call back or contact one of our advisors on 0161 703 2549. Alternatively please email us on info@championcontractors.co.uk.