The Alabaster ruling explained

Edited by Oliver Wakefield-Smith, Founder of Digital Signet. Last reviewed 23 June 2026.

Direct answer

Why does Alabaster matter?

If you receive a pay rise effective at any point between the start of the relevant 8-week AWE period and the end of your maternity leave, your AWE must be recalculated as if the rise had been in force throughout the relevant period. Your SMP is then revised. The 90% phase is recalculated for the higher figure; arrears are usually paid as a lump sum.

The case

Alabaster v Woolwich plc and Secretary of State for Social Security (Case C-147/02) was decided by the Court of Justice of the European Union in 2004. The court held that the EU Equal Pay principle requires any pay rise awarded between the start of the AWE reference period and the end of maternity leave to be taken into account when calculating maternity pay.

UK implementation

The Statutory Maternity Pay (General) (Amendment) Regulations 2005 (SI 2005/729) wrote Alabaster into UK regulations. The relevant period for Alabaster runs from the start of the 8-week AWE window through to the end of maternity leave. A pay rise effective at any point in that window triggers recalculation.

How recalculation works in practice

AWE is recomputed as if the new salary had applied throughout the original 8-week relevant period.
90% of the revised AWE is computed.
Weeks 1 to 6 of SMP are restated at the higher figure. Arrears are paid in the next payroll run.
The flat-rate phase (weeks 7 to 39) is only affected if the revised 90% AWE is below 194.32, in which case the lower figure applies.

Worked example: recalculating SMP after a pay rise

Take an employee on 28,000 a year whose SMP was first calculated on that salary, then awarded a rise to 32,000 effective during the relevant period. AWE here uses the salaried simplification of annual pay divided by 52; the strict statutory test averages the 8 weeks before the qualifying week.

	Original (28,000)	After Alabaster rise (32,000)
AWE	538.46	615.38
Weeks 1-6 weekly (90% AWE)	484.62	553.85
Weeks 7-39 weekly	194.32	194.32

Only the first 6 weeks change, because 90% of the revised AWE (553.85) is still above the 194.32 flat rate, so weeks 7 to 39 are unchanged. The weekly uplift for weeks 1 to 6 is 553.85 minus 484.62, or 69.23. Across the 6 weeks the arrears due are 69.23 times 6, which is 415.38, normally paid as a lump sum in the next payroll run.

If the revised 90% AWE had come out below 194.32, the flat-rate weeks would also be restated upward to the new 90% figure, and the arrears would run across all 39 weeks rather than only the first 6.

What about a discretionary bonus paid after the QW?

Alabaster applies to a contractual pay rise. A genuinely discretionary bonus paid after the QW does not automatically trigger recalculation unless it represents pay properly attributable to the relevant period. Where the bonus is earned across the relevant period, the apportioned slice is treated as having been paid in the relevant period.

FAQ

How is SMP recalculated under the Alabaster rule?

The average weekly earnings are recomputed as if the pay rise had applied throughout the original relevant period. The 90% phase (weeks 1 to 6) is restated at the higher figure and any arrears are paid as a lump sum. The flat-rate phase (weeks 7 to 39) only changes if the revised 90% AWE falls below 194.32 per week.

Does the Alabaster rule increase the 194.32 flat rate?

No. The statutory flat rate for weeks 7 to 39 is capped at 194.32 per week for 2026/27. A pay rise only raises SMP where 90% of the revised AWE is higher than 194.32, which affects weeks 1 to 6 and, if the revised 90% figure is below the cap, restates the flat weeks upward to that figure.

Which pay rises trigger a recalculation?

A contractual pay rise effective at any point between the start of the 8-week AWE reference period and the end of maternity leave. A genuinely discretionary bonus does not automatically trigger it unless it is properly attributable to the relevant period.