Enhanced maternity pay being paid as a bonus

My employer is offering me 8 weeks maternity pay at 100% pay then going on to statutory for the rest of my leave. However instead of paying the enhanced part in weekly installments, they are offering to pay it in a lump sum before I leave as a bonus. That means I will pay 40% tax on the whole sum, whereas if it was paid as normal full pay on a weekly basis, I would pay 40% only on the amount above the higher tax threshold for March and the basic rate in April as the threshold is going up. Am I losing out with the bonus option, or will the tax work out about the same in the end?

Maternity Allowance working at home

 

You are indeed losing out on an estimated three weeks where you would normally pay only basic rate if the payment was made on a weekly basis as opposed to payment of the lump sum. A lot of employers and HR departments prefer to pay in a lump sum as it is easier for them to administer, but I would suggest that you speak to yours and see if they are sympathetic to your plight.


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