Maternity leave and money: what the year really costs, and what to protect
Statutory maternity pay week by week, why the take-home lost is less than the gross gap, the three things to protect while on leave (the child benefit claim, the pension, the State Pension record), and how part-time afterwards prices out.
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A year of maternity leave is the largest planned income drop most households make, and the statutory numbers are small enough that the planning has to be done before the leave, not during it.
The statutory shape
Statutory Maternity Pay runs 39 weeks: 90% of average earnings for the first six, then the lower of £194.32 a week and 90% for the next 33, then nothing for up to 13 more weeks of leave. On a £36,000 salary that is £623 a week for six weeks, £194.32 for 33, and £10,151 in all over a year off against £36,000 of normal pay. Paternity pay is two weeks at the same capped rate; Shared Parental Pay lets the 33 capped weeks be split. Employer schemes lay full or half pay over the statutory weeks rather than adding to them. The maternity pay calculator lays the weeks out and prices any enhancement.
Why the cost is less than the gross gap
A year with leave in it also pays far less tax and National Insurance: the £26,000 of gross pay given up costs about £19,000 of take-home, because the top of the salary was the most heavily taxed part. It is still a large sum, and the honest household figure is the take-home difference, which the calculator states plainly.
Three things to protect
Claim child benefit even if the high-income charge means paying it back, because the claim carries National Insurance credits that protect the State Pension record of the parent who is not earning: the child benefit calculator prices the charge. Watch the pension: contributions on leave are usually a percentage of the pay actually received, so they collapse, while a good employer keeps its own contribution on normal pay; ask. And check the State Pension record afterwards, since a year below the lower earnings limit without credits does not count. Returning part-time is its own decision: the part-time work calculator shows that four days costs well under 20% of take-home but a fifth of pension contributions, and the Tax-Free Childcare calculator what the government adds to the nursery bill.
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