Maternity or paternity leave: planning for lower income

UK: how Statutory Maternity Pay works

GOV.UK sets out the structure:

• Weeks 1 to 6: 90% of your average weekly earnings before tax.
• Weeks 7 to 39: £194.32 a week, or 90% of your average weekly earnings if that is lower.
• Weeks 40 to 52: Statutory Maternity Leave lasts 52 weeks, but statutory pay stops after 39.

SMP is paid the same way as your wages, weekly or monthly, and tax and National Insurance are deducted. To qualify, you need to have worked for your employer continuously for at least 26 weeks into the "qualifying week" (the 15th week before the expected week of childbirth) and earn on average at least £129 a week. If you are self-employed or don't qualify for SMP, Maternity Allowance may apply: £194.32 a week (or 90% of average earnings if less) for up to 39 weeks for employees who don't get SMP, and between £27 and £194.32 a week for self-employed people, depending on their Class 2 National Insurance record.

Here is what the drop looks like for Priya, who earns £3,000 a month before tax:

The first six weeks barely register. From week seven, her pay falls to about £842 a month (£194.32 × 52 ÷ 12). That cliff is what the budget has to absorb. If she takes the full year, weeks 40 to 52 are unpaid: another £9,000 of gross pay.

These are gross figures. Because SMP is taxed and lower pay means less tax, the take-home gap is smaller. Your payroll team can give you the net figure, and the GOV.UK maternity planner shows your dates.

UK: paternity and shared parental leave

Paternity Leave is up to 2 weeks, taken together or as two separate weeks, and must end within 52 weeks of the birth. The leave itself is a right from your first day in the job. Statutory Paternity Pay is £194.32 a week or 90% of your average weekly earnings, whichever is lower, and needs the same 26 weeks of service and £129 a week average earnings as SMP.

For Tom, Priya's partner, who earns £750 a week, two weeks of paternity pay come to £388.64 instead of £1,500: a gross drop of £1,111.36, unless his employer tops it up.

Shared Parental Leave lets parents split up to 50 weeks of leave and up to 37 weeks of pay in the child's first year. It doesn't create new money: it moves weeks of statutory pay from one parent to the other. It can help when one partner's employer pays enhanced leave, or when the higher earner wants to go back sooner.

US: FMLA, state programmes and employer policies

The US has no federal paid parental leave. The Family and Medical Leave Act gives eligible employees up to 12 workweeks of unpaid, job-protected leave in a 12-month period, and your employer must keep your group health cover on the same terms. You are eligible if you have worked for a covered employer for at least 12 months, have at least 1,250 hours of service in the 12 months before the leave, and work at a site with at least 50 employees within 75 miles.

Paid leave comes from three places:

• State programmes. According to New America (May 2026), 12 states plus Washington, DC pay family leave benefits: California, Colorado, Connecticut, Delaware, Maine, Massachusetts, Minnesota, New Jersey, New York, Oregon, Rhode Island and Washington. Maryland plans to start paying benefits in January 2028 and Virginia in December 2028.
• Your employer's policy. Some employers pay parental leave in full or in part. Read the handbook before you run the numbers.
• Short-term disability cover, if your employer offers it, may pay part of your wage during recovery after the birth. Check the policy wording and waiting period.

Two very different cases, both earning $1,350 a week before tax:

Maria's benefit is below New York's 2026 cap of $1,228.53 a week, so she receives the full 67%. Dana's leave is protected by FMLA if she qualifies, but she has to fund every week herself.

Build the budget for the months off

Start from your normal monthly budget and adjust it for the leave period:

• What usually goes down: commuting, lunches out, sometimes childcare for older children if one parent is home.
• What goes up: baby equipment (mostly bought before the birth), nappies or diapers, a bigger grocery bill.
• What starts later: nursery or daycare fees, usually from your return to work. Plan that line now so it doesn't arrive as a shock.

Then compare household income during leave with household costs. Priya and Tom's essentials plus a trimmed spending budget come to £3,942 a month. During the flat-rate weeks they have Tom's take-home pay of £2,600 plus Priya's SMP of about £842: £3,442. The shortfall is £500 a month. The flat-rate period lasts 33 weeks, a little under 8 months, so they plan for 8 × £500 = £4,000. With 8 months to go before the due date, that's £500 a month to put aside.

If Priya takes the unpaid weeks too, the shortfall for those months becomes £3,942 − £2,600 = £1,342 a month. Better to know that now than in month ten.

Keep one-off purchases (cot, pram) in a sinking fund and monthly costs in the budget. Don't plan to cover a gap you can see coming with your emergency fund: leave that for things you can't predict. If you split bills in proportion to income, the parent on leave will see their share shrink; revisit the split for those months. Our guide to couples budgets covers the three common models.

Keep the plan in Binome360

In Binome360, the gap becomes a savings goal with an amount, a date and a progress bar. Each contribution is logged in one sentence, and a monthly reminder on payday keeps it going. During the leave, you log SMP or state benefit payments as income, so you can check they match your plan. As a couple, a shared assistant lets each of you add from your own phone. The app doesn't connect to your bank or to HMRC, and it never moves money: you type or say it, it prepares the record, you confirm.

Frequently asked questions

How much is maternity pay in the UK in 2026?

Statutory Maternity Pay is 90% of your average weekly earnings for the first 6 weeks, then £194.32 a week or 90% of your earnings (whichever is lower) for the next 33 weeks. Tax and National Insurance are deducted. Your employer may pay more under your contract.

Is maternity leave paid in the US?

Not under federal law. FMLA leave is unpaid. You may get pay from a state programme (12 states plus DC in 2026), from your employer's parental leave policy, or from short-term disability cover.

When should I start saving for parental leave?

As soon as you know your dates and your employer's policy. The more months you have, the smaller the monthly amount: £4,000 over 8 months is £500 a month; over 4 months it is £1,000.

Can I use my emergency fund for maternity leave?

You can, but it's better not to plan on it. The drop in income is predictable, so it belongs in its own savings goal. Keep the emergency fund for surprises, which tend to happen in the first months with a newborn too.

In short

Parental leave pay is set by law, contract and, in the US, by state, so the gap can be anything from almost nothing to your whole wage. Put a number on it, month by month, and save it before the birth. First step: look up the parental leave section of your contract or employee handbook today and note exactly what your employer pays, and for how long.

Sources

• GOV.UK, "Maternity pay and leave": pay, eligibility (£129 a week, 26 weeks' service) and 52 weeks' leave, checked September 2026: gov.uk/maternity-pay-leave.
• GOV.UK, "Paternity pay and leave": pay, leave and eligibility, checked September 2026: gov.uk/paternity-pay-leave.
• GOV.UK, "Maternity Allowance: what you'll get", checked September 2026: gov.uk/maternity-allowance.
• GOV.UK, "Shared Parental Leave and Pay", checked September 2026: gov.uk/shared-parental-leave-and-pay.
• US Department of Labor, Wage and Hour Division, "Family and Medical Leave Act": dol.gov/agencies/whd/fmla.
• New America, "Paid Leave Programs in the United States: Benefits and Funding Explainer", updated 19 May 2026: newamerica.org.
• New York State Paid Family Leave, "2026 updates" (67% of average weekly wage, maximum $1,228.53 a week, up to 12 weeks): paidfamilyleave.ny.gov/2026.

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