Salary Sacrifice During Maternity Leave 2026/27

Employer pension contributions during maternity leave

Employer pension contributions — including any that arise through salary sacrifice — must continue during maternity leave in certain circumstances:

• Ordinary Maternity Leave (weeks 1–26): If you receive contractual maternity pay (i.e. enhanced pay above SMP), the employer must continue pension contributions as if you were still working normally. The employer contribution is calculated on your usual salary — not your reduced maternity pay.
• Additional Maternity Leave (weeks 27–52): The employer duty to continue pension contributions depends on whether you are receiving contractual pay. If you are only on SMP (or unpaid), the employer's obligation to contribute depends on your contract and scheme rules.

These rules stem from the Equality Act 2010 and apply even if you are not making employee contributions during leave. Your employer cannot use your absence to reduce or stop their contributions if contractual pay is being paid.

Employee contributions during maternity leave

You are not required to continue making employee pension contributions (via salary sacrifice or otherwise) during maternity leave. The salary sacrifice arrangement is typically suspended when your salary falls too low to sustain the sacrifice.

Practically:

• Most payroll systems will automatically suspend salary sacrifice when pay drops below the sacrificed amount.
• If your sacrifice exceeds your remaining pay, you will not be charged — the sacrifice simply doesn't occur for that period.
• You can choose to make personal pension contributions independently during leave if you wish, though these would be regular member contributions (with tax relief via the pension scheme) rather than salary sacrifice.

When you return to work, the salary sacrifice arrangement should resume automatically — check with your payroll team to confirm.

Does salary sacrifice affect Statutory Maternity Pay?

This is a critical and often misunderstood area. SMP is calculated on "average weekly earnings" (AWE) over an 8-week reference period ending 15 weeks before the expected week of childbirth (the "qualifying week").

HMRC's position is that SMP should be based on the contractual salary — the cash-equivalent that would be paid absent any sacrifice. However, some employers calculate AWE based on the post-sacrifice salary that was actually paid during the reference period. If that happened, your SMP could be lower than it should be.

• If your sacrifice was active throughout the reference period, and your employer uses the post-sacrifice figure, your AWE (and hence SMP) could be reduced.
• Some employment lawyers and advisers argue that where salary sacrifice forms part of the original contract redesign, the lower post-sacrifice salary is the "contractual salary" for SMP purposes — though this is contested.
• The safest approach if you are planning maternity leave: check your employer's SMP calculation method before the qualifying week. You may wish to pause salary sacrifice before the reference period begins.

If you believe your SMP has been undercalculated, raise it with your employer or HR team. If unresolved, HMRC can adjudicate SMP disputes.

Statutory Maternity Pay: the basics

For 2026/27, SMP is paid for up to 39 weeks:

• First 6 weeks: 90% of average weekly earnings (no cap)
• Weeks 7–39: the lower of 90% of AWE or the flat weekly rate (£184.03/week for 2026/27, subject to confirmation)

To qualify, you must have been employed by the same employer for at least 26 weeks into the 15th week before the expected week of childbirth, and your average weekly earnings must be at or above the Lower Earnings Limit (£123/week for 2026/27). Salary sacrifice does not affect SMP eligibility thresholds provided your post-sacrifice earnings remain above the LEL.

Many employers offer contractual maternity pay above SMP — check your contract or staff handbook for details.

Annual allowance during maternity leave

Even if you make no pension contributions during maternity leave, the tax year still counts for carry-forward purposes. If you had unused annual allowance in previous years, you can carry it forward for up to three years and use it in a later year when you return to work and are sacrificing again at a higher rate.

Keep a record of your pension input amounts during the years immediately before and after maternity leave to ensure you can use any available carry-forward allowance when you return.

Frequently asked questions

Official sources

• GOV.UK — Maternity pay and leave
• GOV.UK — Salary sacrifice and the effects on PAYE
• GOV.UK — SMP: employee circumstances that affect payment (E15)
• GOV.UK — Pension annual allowance