Managing sick pay for employees can be a challenging area for many employers. Outsourcing payroll to a payroll and HR provider like PayEscape ensures compliance with legal obligations while maintaining employee welfare.
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Statutory Sick Pay (SSP) is the minimum amount employers are legally required to pay eligible employees who are off work due to illness. SSP applies to most employees who meet the eligibility criteria, and it is a set amount paid for up to 28 weeks.
As of the current tax year, the rate for statutory sick pay is £109.40 per week. Employers must pay this to eligible employees who have been off sick for more than four consecutive days, including non-working days (also known as “qualifying days”).
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To qualify for SSP your employees must meet the following conditions:
SSP does not apply to certain categories, including the self-employed, employees who have recently left employment, and those who have already received the maximum SSP entitlement.
If your employee does not meet the eligibility criteria for SSP, you are required to provide them with an SSP1 form. This form explains why they are not entitled to SSP and allows them to claim other benefits, such as Universal Credit or Employment and Support Allowance (ESA). This should be issued within seven days of the employee’s sick leave.
If your employee’s illness is caused by work-related activities, such as an accident or injury sustained on the job, they may still qualify for SSP. However, if the illness is significant and leads to long-term absence, employees may also be eligible to claim Industrial Injuries Disablement Benefit (IIDB). You must follow all relevant health and safety regulations to avoid workplace illness and accidents, ensuring you provide adequate support for employees who become unwell due to work. Speak with a HR consultant at PayEscape to ensure your health and safety regulations are up to date.
Employees who work irregular hours, including part-time and zero-hours contracts, can still qualify for SSP. The amount they earn and how frequently they work will be considered when determining their eligibility. If the employee earns an average of at least £123 per week over an eight-week period before falling ill, they will be entitled to SSP. It’s important to note that SSP only covers working days, and if an employee is sick on days they wouldn’t have worked, these days won’t count towards SSP entitlement.
If your employee falls ill whilst on holiday, they are entitled to claim SSP rather than using their holiday entitlement. In this case, they must inform you of their illness and provide the necessary medical evidence, such as a doctor’s note. The employee can choose to reschedule their holiday and use the sick leave instead.
Statutory Sick Pay is paid for a maximum of 28 weeks. If an employee remains unfit for work beyond this period, they may need to claim additional benefits, such as Employment and Support Allowance (ESA). You should inform employees when their SSP is about to end and provide them with an SSP1 form, which allows them to apply for further support.
You will need to keep records if your employee if off to calculate sick pay. For example ff your employee works five days a week, £109.40 ÷ 5 = £21.88 per day. For three days of sickness, the employee would receive £21.88 × 3 = £65.64.
It’s important to keep accurate records of:
Calculating SSP involves ensuring that the employee has met the eligibility requirements and determining their qualifying days. Qualifying days are the employee’s normal working days, and SSP is only paid for these. SSP calculations can be managed by a payroll provider like PayEscape. Calculating SSP includes:
Many employers offer additional sick pay, known as company sick pay, which can be more generous than SSP. These schemes vary by business, but often provide full pay for a set period (e.g. four weeks) and may reduce to half pay after that. It’s important to outline your company’s sick pay scheme clearly in your employee contracts or handbook. How typical company schemes work:
Some companies offer full pay for a certain number of sick days, after which the employee reverts to SSP.
Other businesses may pay a percentage of the employee’s salary, such as 50% pay for the first month of sickness.
Some companies cap the total amount of sick pay an employee can receive, regardless of the length of their absence.
PayEscape’s integrated payroll and HR software simplifies this process. With automated statutory calculations, easy record-keeping, and compliance management, our platform ensures that you stay on top of SSP payments, holiday entitlements, and employee absences. Take control of your business with PayEscape – the trusted payroll and HR software solution for UK employers. Our software allows for:
Using our cloud-based software we manage all aspects of your payroll process. From calculating your payroll taxes and filing with HMRC to managing all components of auto enrolment and so much more. Whether it’s reimbursement or pre-tax benefits we’ve got it covered.
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