Contractors often have a lot of questions when it comes to their benefits and entitlements, particularly when it comes to maternity pay. The world of contracting can be confusing, and it`s not always clear what you`re entitled to and what you`re not.
So, do contractors get maternity pay? Unfortunately, the answer is no. Contractors are not entitled to statutory maternity pay (SMP) in the same way that employees are.
SMP is a benefit that is available to employees who meet certain criteria. To be eligible, you need to have worked for your employer continuously for at least 26 weeks by the end of the 15th week before your due date. You also need to earn an average of at least £120 per week.
As a contractor, you aren`t an employee, so you don`t meet the eligibility criteria for SMP. However, this doesn`t mean that you`re completely without options.
One option that contractors may be able to explore is maternity allowance. This is a benefit that is available to self-employed individuals who have worked for at least 26 weeks in the 66 weeks leading up to their due date. To be eligible, you`ll need to have paid Class 2 National Insurance contributions for at least 13 of the 66 weeks.
Maternity allowance is paid by the government and is calculated based on your average earnings over the 13 weeks leading up to your due date. The rate is either £151.20 per week or 90% of your average earnings (whichever is lower).
It`s worth noting that, unlike SMP, maternity allowance is not paid by your employer. If you`re working under contract, you`ll need to factor in the cost of taking time off when you`re negotiating your rate.
Another option that contractors may be able to explore is income protection insurance. This type of insurance will provide you with a regular income if you`re unable to work due to illness or injury. Some policies may also offer maternity cover, which means that you`ll be paid a regular income while you`re on maternity leave.
It`s important to remember that income protection insurance can be expensive, and it`s not always worth the cost. You`ll need to weigh up the cost of the premiums against the benefit of having financial support while you`re not working.
In summary, contractors are not entitled to statutory maternity pay in the same way that employees are. However, there are still options available, such as maternity allowance and income protection insurance. It`s important to do your research and make sure that you understand your entitlements and options before you start your maternity leave.