Shared Parental Leave: how it works and what it does to your pay and pension

You end your maternity leave early. Your partner takes some weeks off instead. Someone calls it "gifting" the weeks.

That is Shared Parental Leave from the inside. What nobody explains is what it did to either pay packet, or to either pension. Plenty of parents hand weeks over and never find out.

Here it is, broken down.

What you're actually sharing

You can share up to 50 weeks of leave and up to 37 weeks of pay between you. GOV.UK: Shared Parental Leave and Pay, What you'll get.

Those weeks are not new. The mother takes less than her 52 weeks of maternity leave, and less than her 39 weeks of maternity pay or Maternity Allowance. What she does not use becomes Shared Parental Leave (SPL) and Statutory Shared Parental Pay (ShPP). GOV.UK: Shared Parental Leave and Pay, What you'll get.

Shared leave is what is left after the mother's weeks, not an extra allowance on top.

She must take at least two weeks off after the birth, or four weeks if she works in a factory. Acas: Shared parental leave and pay, How shared parental leave works. You use the rest in the year after the birth, together or in turns. Acas: Shared parental leave and pay, How shared parental leave works.

Two tests, one per parent

Each parent sits a test, and the two differ.

Say your partner wants the leave. Then you, the mother, need to have worked at least 26 of the 66 weeks before the week the baby is due. They need not be in a row. You also need to have earned at least £390 across any 13 of those weeks. GOV.UK: Shared Parental Leave and Pay, Eligibility for birth parents.

Your partner's test is stricter. They need 26 weeks with the same employer by the end of the 15th week before the due date, and must stay with that employer until at least the week before their leave starts. For the pay, they need to earn at least £129 a week on average. GOV.UK: Shared Parental Leave and Pay, Eligibility for birth parents.

If you want the shared leave yourself, the two tests swap over. GOV.UK: Shared Parental Leave and Pay, Eligibility for birth parents.

To take the leave you must be an employee, not a "worker". If either of you is a worker, you might be able to share the pay but not the leave. GOV.UK: Shared Parental Leave and Pay, Eligibility for birth parents.

If the mother is on Maternity Allowance

Maternity Allowance comes from the government, not an employer. Mothers often get it because they changed jobs, work for themselves, or have not built up a long enough run of service. Our guide to SMP or Maternity Allowance explains who gets which.

The good news first. You can still create shared leave and pay for your partner. You give notice to end your Maternity Allowance early. Acas says ending it early "creates shared parental leave or shared parental pay for the other parent if they are eligible". Acas: Shared parental leave and pay, How shared parental leave works. Your own test is the 26 weeks out of 66, plus the £390. GOV.UK: Shared Parental Leave and Pay, Eligibility for birth parents. You do not need to have qualified for Statutory Maternity Pay.

Now the catch. To take shared leave yourself, you need 26 weeks with the same employer by the end of the 15th week before the due date. GOV.UK: Shared Parental Leave and Pay, Eligibility for birth parents. That is the very test many mothers on Maternity Allowance fail. So you may be able to hand weeks to your partner and not use any yourself.

If you work for yourself, you cannot take shared leave or pay at all, though your partner still can. Acas: Shared parental leave and pay, Shared parental pay.

The money

Shared parental pay is £194.32 a week, or 90% of average weekly earnings, whichever is lower. GOV.UK: Shared Parental Leave and Pay, What you'll get. It works like Statutory Maternity Pay, bar one thing. SMP starts with six weeks at 90% of your pay, with no cap. Shared pay has no higher opening rate. GOV.UK: Shared Parental Leave and Pay, What you'll get.

The money comes from your partner's employer, not the government. GOV.UK: Shared Parental Leave and Pay, employer guide.

Some employers pay more than the minimum. Acas calls that "enhanced" or "contractual" pay, and says it should be set out in writing. Acas: Shared parental leave and pay, Shared parental pay. A generous maternity policy does not mean a generous shared parental policy. Ask both employers for the written policy first.

A worked example

Here is a made-up example, with round figures you can check.

Priya gets Maternity Allowance. Her partner Sam earns £36,000 a year, which is £692.31 a week (£36,000 divided by 52). His employer pays the statutory minimum.

Priya takes 26 weeks, then ends her Maternity Allowance and goes back to work. That leaves 13 weeks of shared pay (39 minus 26) and 26 weeks of shared leave (52 minus 26). GOV.UK: Shared Parental Leave and Pay, What you'll get. Sam takes 13 weeks.

Those weekly figures are Sam's gross pay and the shared pay rate. GOV.UK: Shared Parental Leave and Pay, What you'll get. Over 13 weeks Sam gets £2,526.16 gross, which is 13 times £194.32.

The household still has one person on £194.32 a week. The drop simply moved to another payslip, and the tax moved with it. Maternity Allowance is one of the benefits you do not pay Income Tax on. GOV.UK: Income Tax, tax-free and taxable state benefits. Sam's shared pay reaches him through his employer, so his payslip decides what comes off. GOV.UK: Shared Parental Leave and Pay, employer guide. Ask his payroll what that will be.

What happens to your pensions

Two pensions are in play, not one.

During paid leave you and your employer usually both keep paying in. Your own payments are based on what you are actually paid. Your employer's are based on your pay before the leave. MoneyHelper: What happens to my workplace pension during maternity or paternity leave?. So in Sam's 13 weeks his own payment falls, and his employer's should not. MoneyHelper: What happens to my workplace pension during maternity or paternity leave?.

Unpaid weeks differ. Pension contributions usually stop if a period of leave is unpaid, unless your contract says otherwise. GOV.UK: Employee rights when taking maternity and other types of parental leave. Shared leave can run longer than shared pay, so check which weeks are which.

Then there is your own pension. On Maternity Allowance your employer usually keeps paying in for the first 26 weeks. After that the payments usually stop, unless your scheme rules or contract say otherwise. MoneyHelper: What happens to my workplace pension during maternity or paternity leave?. Our guide to your pension during maternity leave has more.

Giving notice

Give your employer at least 8 weeks' written notice of your leave dates. GOV.UK: Shared Parental Leave and Pay, Applying for leave and pay. The mother gives a separate notice to end her maternity leave or pay early, and Acas has forms for both. GOV.UK: Shared Parental Leave and Pay, Applying for leave and pay. Your employer can ask, within 14 days, for a copy of the birth certificate and your partner's employer details. GOV.UK: Shared Parental Leave and Pay, Applying for leave and pay.

You can change your mind later about how much shared leave or pay you take, and when. Give at least 8 weeks' notice of any change before that leave starts. GOV.UK: Shared Parental Leave and Pay, Applying for leave and pay.

The notice that ends maternity leave is harder to unwind. Acas says you can only cancel it in three cases: you gave it before the birth and cancel within 6 weeks of the birth, the other parent dies, or neither parent qualifies for shared leave, shared pay or Maternity Allowance. Acas: Shared parental leave and pay, Planning leave. Once the mother has gone back to work, she cannot restart maternity leave. Acas: Shared parental leave and pay, Planning leave.

The scheme here covers England, Scotland and Wales. GOV.UK: Shared Parental Leave and Pay, employer guide. Northern Ireland runs its own version, at the same £194.32 a week. nidirect: Shared parental leave and pay.