How To Calculate Statutory Sick Pay

Statutory Sick Pay (SSP) is financial support to employees who are unable to work, find out how this works for businesses and how to calculate sick pay for employees below.

What is Statutory Sick Pay?

Statutory Sick Pay (SSP) is a legal financial support to employees who are unable to work due to illness or injury. Employers are required to pay SSP to eligible employees who meet certain criteria. The current SSP rate, as determined by UK legislation, is reviewed annually and can be subject to change. Employers are obligated to pay SSP for up to 28 weeks, although they may have their own sick pay schemes that offer more generous benefits. It's important for employers to adhere to SSP regulations to ensure compliance with UK employment law and to support their employees during times of illness or injury. Find out how to calculate statutory sick pay below or get in touch with a CIPP payroll expert online.

How to calculate Statutory Sick Pay

SSP is calculated by the following formula:Weekly rate of Statutory Sick Pay ÷ number of qualifying days in a week x (Working days worker is ill -3)

When does Statutory Sick Pay start?

To qualify for SSP, an employee must have been off work due to illness or incapacity for at least four consecutive days, including weekends and bank holidays. Additionally, they must earn above a certain threshold and notify their employer of their absence within specified timeframes. However, if an employee has worked for more than one minute of a day before they go off sick, this doesn’t count as a sick day.

Whilst working out employee SSP seems fairly straight forward, it’s easy to make small mistakes, which could lead to underpaying employees. That’s why it’s advisable for businesses to outsource their payroll so that a payroll provider can ensure it is calculated correctly each and every time.

How much is Statutory Sick Pay and how long does it last?

If an employee is too ill to work, SSP can be paid for up to 28 weeks. Employees are paid a minimum of £99.35 a week. Employees cannot be paid less than £99.35. SSP is paid for the ‘qualifying days’ an employee normally works.

However, employees can be paid more depending on their company’s sick pay scheme or ‘occupational scheme’. This must be included in employment contracts.

Employees are not paid SSP for the first three working days of illness unless:

• They had time off sick before 25th March 2022 due to COVID-19.

• They were already paid SSP in the last eight weeks which included a three day waiting period.

• There is a different scheme for Agricultural workers. Find out more about Agricultural Sick Pay on Gov.uk.

When to stop paying Statutory Sick Pay

Once an employee has returned to work, employers no longer have to pay SSP. If employees no longer qualify for SSP, employers don’t have to pay.

Who pays for Statutory Sick Pay?

Similarly to wages, the employer pays SSP. Statutory Sick Pay is taxable and subject to all National Insurance contributions.

Who qualifies for Statutory Sick Pay?

• A person who is classed as an employee and has done work for their employer. To be classed as an employee they must work under an employment contract.

• Earn at least £123 per week on average before tax.

• Have been ill for at least four days in a row (including non-working days such as weekends).

• An employee who has told their employer within any deadline the employer has set, or within seven days of their illness.

Can annual leave be used during sick leave?

Employees still accrue statutory holiday pay whilst they’re off sick. Annual leave can be used during an employee’s sick leave (it doesn’t matter how long they’re off for). However, you cannot force your employers to take holiday pay when they are eligible for SSP. Find out how to calculate holiday entitlement for employees.

Do employers need to keep records of Statutory Sick Pay?

Whilst there are no laws or legalities surrounding keeping records of SSP paid to employees, it is certainly useful to have an up to date record of employees sickness absence and sick pay, should there ever be a dispute over SSP. Time and Attendance software plays a vital role in helping to keep a record of employee’s time, attendance and sickness records. Speak to one of our advisors today and find out how to revolutionise your HR, time and attendance and payroll processes.

Last updated: 27/03/2024