How to reclaim Statutory Maternity Pay from HMRC

Employers reclaim 92% of the Statutory Maternity Pay they pay out, and smaller employers reclaim 109%, for the 2026-27 tax year ^[1]. The money comes back not as a cheque but as a reduction in the PAYE bill, claimed through the Employer Payment Summary by the 19th of the following tax month ^[3]. Done correctly, the cost of maternity pay to most businesses is small.

The recovery is automatic only in the sense that the rules are fixed. The employer still has to calculate the recoverable amount, report it on the right return, and submit it on time. Errors at any of those points delay the money or, in the worst case, leave it unclaimed.

This article explains exactly how an employer reclaims SMP: what can and cannot be recovered, the difference between the 92% and 109% rates, how the Employer Payment Summary works, what happens when the reclaim is larger than the PAYE bill, and the routes available when a business cannot fund the payments up front.

Key takeaways

• Employers reclaim 92% of SMP, or 109% under Small Employers' Relief.
• Small Employers' Relief applies where Class 1 National Insurance was £45,000 or less in the last complete tax year before the qualifying week.
• The reclaim is made by including the recoverable amount in an Employer Payment Summary (EPS).
• The EPS must reach HMRC by the 19th of the following tax month to reduce that month's PAYE bill.
• Statutory Sick Pay cannot be reclaimed at all.

What an employer can reclaim

The recovery scheme covers the family-related statutory payments but not sick pay. An employer can reclaim a proportion of Statutory Maternity Pay, Statutory Paternity Pay, Statutory Adoption Pay, Statutory Shared Parental Pay, Statutory Parental Bereavement Pay, and Statutory Neonatal Care Pay ^[1]. Statutory Sick Pay sits outside the scheme entirely and is absorbed in full by the employer ^[1].

Because SMP is recoverable and SSP is not, the two should never be lumped together in cash-flow planning ^[1]. The full set of duties around paying SMP in the first place is covered in the guide to employer maternity pay obligations. Most HMRC-recognised payroll software for SMEs separates the recoverable and non-recoverable amounts automatically.

Standard recovery versus Small Employers' Relief

The recovery rate an employer gets depends on its size, measured by its National Insurance bill in the previous tax year. The two rates for the 2026-27 tax year are set out below ^[2].

How to know if a business qualifies

A business qualifies for Small Employers' Relief if it paid £45,000 or less in Class 1 National Insurance in the last complete tax year before the qualifying week, which is the 15th week before the week of the due date ^[1]. The £45,000 figure is measured before any reductions such as Employment Allowance, so the gross National Insurance liability is the test, not the net amount actually paid ^[1].

This matters because Employment Allowance reduces the amount a small employer hands over, which could mislead an employer into thinking it pays less National Insurance than it does for this test ^[6]. The qualifying week itself is fixed by the due date, and the way that week is determined is explained in the guide to the SMP qualifying week.

The 9% compensation

A small employer recovers more than it paid out: 100% of the SMP plus an extra 9% ^[2]. That additional 9% is compensation for the employer National Insurance the business pays on the SMP itself, which has become more significant since employer National Insurance rose to 15% ^[2]. The interaction between statutory pay and employer National Insurance is explored further in the guide to understanding employer National Insurance.

How to reclaim SMP through the EPS

The reclaim is made through the Employer Payment Summary (EPS), a Real Time Information return that sits alongside the Full Payment Submission (FPS). The FPS reports what employees were paid; the EPS reports the adjustments, including statutory pay recovery, that reduce what the employer owes HMRC ^[9].

Calculating the recoverable amount

For each tax month, the employer works out how much SMP it paid and applies the correct recovery rate to find the recoverable amount, plus any compensation for small employers ^[5]. Payroll software does this calculation as part of the payrun, which is one reason HMRC expects employers to use software rather than manual methods ^[3].

The recovered figure is then offset against the PAYE the employer would otherwise pay for that month ^[5]. Because the calculation feeds the FPS and the EPS, payroll software that holds the HMRC Recognised badge keeps the two returns consistent without manual reconciliation ^[9].

Submitting the EPS and the deadline

The EPS must reach HMRC by the 19th of the following tax month for the reduction to apply to that month's bill, where the tax month runs from the 6th of one month to the 5th of the next ^[3]. Miss the deadline and HMRC may not apply the reduction in time, leaving the employer to pay the full PAYE bill and recover the difference later ^[3]. Bureaux running this across many clients typically rely on a multi-client payroll dashboard to track every scheme's EPS deadline in one place.

When the reclaim is larger than the PAYE bill

In a month where an employer pays a lot of SMP but has a small payroll, the recoverable amount can exceed the PAYE due for that month. HMRC handles this automatically: it uses the leftover credit to reduce what the employer owes on its next payment ^[3].

If the recovery cannot be set off against the current year's liabilities at all, the employer can write to the PAYE Employer Office to ask for a repayment, but only from the start of the next tax year ^[1]. The request goes to the National Insurance Contributions and Employers Office, HM Revenue and Customs, BX9 1BX ^[1].

Recovering SMP from a previous tax year

Sometimes an employer realises after the tax year has closed that it under-recovered SMP. The recovery can still be made. The employer offsets the amount owed against its current PAYE bill, and where that is not possible, it sends the calculation and the amount due to HMRC ^[11].

Late recovery is one reason the record-keeping rules matter, because the employer must be able to evidence the original SMP payments when claiming after the event ^[11]. Keeping these figures in the payroll system rather than a separate ledger makes a late claim far simpler, much as it does for the year-end work covered in the P60 end of year checklist.

When cash flow will not stretch: advance funding

The recovery model assumes the employer can fund SMP before reclaiming it. For a small business with a large maternity bill relative to its PAYE, that assumption can break. HMRC provides advance funding for exactly this case ^[4].

An employer applies online for an advance using the same sign-in details it uses for Self Assessment, VAT, or Corporation Tax, and HMRC pays the funds before the leave begins so the business is never out of pocket ^[7]. An employer that cannot pay because it is insolvent must contact HMRC, which then pays the SMP directly to the employee ^[8].

Conclusion

Reclaiming SMP is less about HMRC handing money back and more about the employer reducing what it owes. The recovery happens through the EPS, at 92% or 109%, against the PAYE bill, by the 19th of the following tax month. Where the credit outstrips the bill or the year has closed, there are defined routes to recover the rest, and where cash flow fails, advance funding fills the gap before the leave starts.

The practical lesson is that recovery is a payroll-reporting task, not an accounting afterthought. The employers that recover cleanly are those whose software calculates the recoverable amount, files the EPS on time, and holds the evidence for any late claim, so that the cost of maternity pay stays close to the 9% that Small Employers' Relief was designed to cover.

Frequently asked questions

How much SMP can an employer reclaim from HMRC?

An employer reclaims 92% of the Statutory Maternity Pay it pays, rising to 109% if it qualifies for Small Employers' Relief, for the 2026-27 tax year ^[1]. Small Employers' Relief applies where Class 1 National Insurance was £45,000 or less in the last complete tax year before the qualifying week ^[1]. The 109% is made up of 100% of the SMP plus 9% compensation.

How does an employer actually claim the money back?

The employer includes the recoverable amount in an Employer Payment Summary (EPS) sent to HMRC, which reduces the PAYE bill for that month ^[3]. Payroll software calculates the figure and files the EPS as part of the payrun ^[5]. The EPS must reach HMRC by the 19th of the following tax month for the reduction to apply on time.

Can an employer reclaim Statutory Sick Pay in the same way?

No. Statutory Sick Pay is not recoverable from HMRC and the employer bears the full cost ^[1]. Only the family-related statutory payments, including SMP, SPP, SAP, ShPP, SPBP, and SNCP, can be reclaimed through the EPS ^[1]. This is a common point of confusion when planning the cost of staff absence.

What if the SMP reclaim is more than the PAYE bill that month?

HMRC automatically carries the surplus forward to reduce the next payment the employer owes ^[3]. If the recovery cannot be set off against the current year at all, the employer can write to the PAYE Employer Office for a repayment from the start of the next tax year ^[1]. An employer that cannot fund the payments at all can apply for advance funding before the leave begins ^[4].

Image prompt for Imagen (also in frontmatter)

Documentary still life, a printed statutory pay calculation on a wooden office desk next to a calculator and a mug of tea, a small stack of payslips, an office wall clock in the background showing late afternoon, natural light from a window, palette of warm white, paper cream, oak, brushed brass, the calculation occupying the lower-right two-thirds of the frame, shot on a Hasselblad X2D at 55mm f/4, photojournalism, soft film grain, no AI artefacts, no warped text, landscape orientation 16:9.