Employer cashflow calculator for SMP

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

Direct answer

What does SMP actually cost a small business?

If your prior-year Class 1 NI was 45,000 or less, the small employer reclaim of 103% turns SMP from a net cost into a small contribution from HMRC. Above the threshold, the standard 92% reclaim leaves the employer with 8% of gross SMP as a real cost, before NI on the payments themselves. The calculator below models both.

Gross SMP paid out7500.00

Reclaimed via EPS at 103%7725.00

Net cost to employer-225.00

A negative net cost means the small-employer 3% uplift over the 100% baseline more than covers the SMP outgoing.

The cashflow gap

You pay SMP on each payday and reclaim it through the EPS for the same tax month. If your reclaim exceeds your PAYE/NI liability, HMRC pays the balance, typically within 30 days. The cashflow gap is therefore at most a single tax month, plus the HMRC processing time.

Advance funding

If you cannot wait, apply for advance funding via GOV.UK before the SMP payday. HMRC pays the SMP up-front and reconciles when the EPS is filed. Useful where SMP outgoing dwarfs the PAYE/NI liability, common with single-person companies.

Overlapping SMP at two staff

If two staff are on SMP simultaneously, the total reclaim can comfortably exceed the monthly NI bill. SER status becomes more important: a 3% uplift on 18,000 of combined SMP across the year is 540 of additional reclaim. Cashflow becomes the bigger constraint, not net cost.