Maternity and Paternity Leave and Pay: A 2026 Employer Guide

When a member of your team tells you they are expecting, two feelings often arrive together: genuine happiness for them, and a quiet flicker of worry about what it means for the business. If you employ only a handful of people, losing one for months — while still paying them — sounds expensive and complicated. It is more manageable than it looks, and a fair chunk of the cost is reclaimable.

This guide covers the essentials of maternity, paternity and shared parental leave and pay for small employers, what you can recover from HMRC, the records to keep, and how to plan for cover without losing sleep.

This article is general information for UK small employers, not legal or HR advice. Employment law, rates and eligibility rules change. Always confirm current figures and your specific obligations on GOV.UK or with a qualified HR or employment-law professional.

The main types of leave and pay

There are several overlapping rights, and it helps to keep them straight:

• Statutory Maternity Leave and Pay — for the person giving birth. Leave can run up to 52 weeks; statutory pay is available for up to 39 of those weeks for eligible employees.
• Statutory Paternity Leave and Pay — for the partner, typically up to two weeks, which can usually be taken flexibly within the first year.
• Shared Parental Leave and Pay — lets eligible parents share up to 50 weeks of leave and 37 weeks of pay between them, in blocks if they wish.
• Statutory Adoption Leave and Pay — broadly mirrors maternity rights for an employee adopting a child.

Leave (the time off) and pay (the money) are separate things with separate eligibility tests. Someone can qualify for leave but not for statutory pay, in which case they may instead claim Maternity Allowance directly from the state.

Who is eligible

Eligibility turns on length of service, earnings and giving you proper notice. As a rule of thumb:

• Leave is usually a day-one right for maternity, while paternity and adoption leave often require a qualifying period of continuous service by a set point before the birth or placement.
• Statutory pay generally requires the employee to have worked for you continuously for a set period and to earn at least the lower earnings limit on average.

Because the exact weeks, dates and earnings thresholds are adjusted regularly, do not rely on memory — check each case against the current rules on GOV.UK. Getting the eligibility decision right early avoids awkward corrections later.

The single most useful thing a small employer can do is start the paperwork the moment an employee shares their news — early clarity prevents almost every parental-leave headache.

How much it really costs you

Here is the part that reassures most small employers: you can usually reclaim a large share of the statutory pay you hand out. Employers can typically recover 92% of statutory parental pay, and smaller employers who qualify for Small Employers' Relief can reclaim 103% — yes, slightly more than they paid, to offset the National Insurance cost.

You recover it through your payroll by reducing what you owe HMRC, so it flows through the same system you already use to run PAYE and payroll. The mechanics matter, so make sure your payroll software or accountant applies the relief correctly — overpaying because you forgot to reclaim is a common and avoidable mistake.

Notice, KIT days and keeping in touch

Employees must give you reasonable notice of when they intend to start leave and, broadly, of their plans to return. You should respond confirming the dates and the pay they will receive.

During maternity or adoption leave, an employee can work a limited number of Keeping in Touch (KIT) days without ending their leave or losing their statutory pay — useful for training, a key meeting or easing back in. Shared Parental Leave has its own equivalent (SPLIT days). These are optional on both sides, but they help a return feel less like stepping off a cliff.

Records you must keep

Good record-keeping protects you if HMRC ever queries a claim. Keep, for the period required by law:

• Proof of the pregnancy or matching certificate (for example, the MATB1)
• The dates leave started and is due to end
• The statutory pay you paid and the amounts reclaimed
• Any weeks where pay was not due, and why

Treat this with the same discipline you bring to other employer duties, such as statutory sick pay — tidy records turn a potential audit into a non-event.

Planning for cover without panic

The operational side worries owners more than the paperwork. A few approaches that work for small teams:

• A fixed-term maternity cover hire. Be clear in writing that the role is temporary and tied to the absence.
• Redistributing work temporarily among the existing team, perhaps with a short-term bonus or overtime.
• Bringing in a freelancer or contractor for specialist tasks.

If the absence falls during a busy bidding period, think about your pipeline too — it may be wise to be a little more selective about which opportunities you chase while a key person is away. Keeping an eye on live UK tenders well ahead of time lets you plan workload around your reduced capacity rather than being caught out.

Whatever you choose, write the arrangement into the cover person's contract so expectations are clear on all sides. Our guide on what to include in employment contracts covers fixed-term wording. And remember that an employee returning from family leave has protections — and may make a flexible working request on return, which you must consider properly rather than refuse out of hand.

It also pays to keep the line of communication open while someone is away. A short, friendly check-in before the expected return date — without pressure — lets you confirm dates, talk through any changes to the role, and sort out a phased return if that suits both of you. Employees who feel supported through this period are far more likely to come back, which spares you the cost and disruption of recruiting all over again.

Common mistakes to avoid

• Forgetting to reclaim. Leaving statutory pay unrecovered is money out of your pocket for nothing.
• Treating leave and pay as one decision. Eligibility for each is assessed separately.
• Pressuring someone to return early. This risks a discrimination claim — handle returns with care.
• Letting cover arrangements drift. Vague temporary roles cause disputes later.

Frequently asked questions

Can I afford statutory maternity pay as a small business?

For most small employers it is far more affordable than expected, because you reclaim around 92% of the statutory pay from HMRC, rising to 103% if you qualify for Small Employers' Relief. You pay it out through payroll and recover it by reducing your HMRC bill, so the net cost to the business is usually modest.

Does an employee on maternity leave still accrue holiday?

Yes. Statutory holiday entitlement continues to build up throughout maternity, paternity, adoption and shared parental leave. Plan for that accrued leave to be taken before or after the family leave, as it cannot simply be lost.

What if my employee does not qualify for statutory maternity pay?

If an employee is not eligible for Statutory Maternity Pay — for example, because of length of service or earnings — they may be able to claim Maternity Allowance directly from the state instead. You should give them form SMP1 explaining why they do not qualify, so they can apply.

Handled early and methodically, parental leave is a normal part of being a good employer rather than a crisis — and supporting someone well through it tends to earn real loyalty in return. For more plain-English guidance on staying on the right side of employment rules, sign up to the Tendarix newsletter and get practical updates for small employers straight to your inbox.