Understanding the Importance of Statutory Sick Pay
Statutory Sick Pay (SSP) is the legal minimum that UK employers must pay to eligible employees who are unable to work due to illness. It is administered through the employer’s payroll rather than paid directly by the government, and it is treated as earnings for the purposes of Income Tax and National Insurance. The current weekly rate is £116.75, paid from the fourth qualifying day of absence after three unpaid waiting days. Employees must meet a minimum earnings threshold and be incapacitated for at least 4 consecutive days to qualify. SSP is payable for up to 28 weeks, after which employees may transition to state benefits. For employers, understanding SSP means knowing when the obligation arises, how to calculate it correctly, what evidence to require, and how to handle the end of the entitlement period. For employees, it means knowing what financial support is available during illness and what steps are needed to access it.
A Practical Guide to Statutory Sick Pay
Illness affects every workplace, and the financial implications of absence can be significant for both parties. Employees need to understand what they are entitled to receive and how to access it. Employers need to know when SSP applies, how to calculate it accurately, and what their legal obligations are throughout the period of absence.
The rules around SSP are detailed but follow a consistent logic. Working through each element in sequence provides a complete picture of how the system operates.
How Much SSP Is Paid
The weekly SSP rate is set by the government and reviewed annually, with changes typically taking effect each April at the start of the new tax year. For the 2024/25 tax year, the rate is £116.75 per week. This is the absolute minimum an employer can pay a qualifying employee; it is not possible to pay less while complying with the law.
For employees who are off for a partial week, the weekly rate is divided by the number of qualifying days in that week to produce a daily rate. Qualifying days are the days the employee is contracted to work. For someone working a standard Monday-to-Friday week, the daily rate is £116.75, divided by 5, giving £23.35 per day.
SSP is treated as earnings and processed through PAYE in the same way as regular wages. Income Tax and National Insurance are deducted where the employee’s total earnings exceed the relevant thresholds. The net amount reaching the employee will therefore be lower than the gross SSP figure, depending on their overall earnings position.
Eligibility Criteria
Not all employees who fall ill are automatically entitled to SSP. Four conditions must be satisfied.
The individual must be an employee with a contract of employment. This includes full-time, part-time, fixed-term, and zero-hours workers, provided they are employed rather than self-employed. Self-employed individuals are not eligible for SSP.
The employee must have done some work under their contract before falling ill. Someone who falls ill before performing any work for a new employer does not qualify through that employer.
The absence must constitute a Period of Incapacity for Work: four or more consecutive days of sickness, including non-working days, weekends, and bank holidays. An absence of three days or fewer does not trigger SSP eligibility.
Average weekly earnings during the eight weeks preceding the illness must meet or exceed the Lower Earnings Limit for National Insurance, currently £123 per week. For employees with variable or fluctuating pay, the calculation is based on the gross earnings paid in the eight-week relevant period leading up to the last normal payday before the absence began.
The Three Waiting Days
SSP is not paid for the first three qualifying days of a sickness absence. These are known as waiting days. SSP begins from the fourth qualifying day.
Using a standard Monday to Friday working pattern as an example: if an employee falls ill on Monday and remains off all week, Monday, Tuesday, and Wednesday are waiting days with no SSP payable. Thursday and Friday are the first paid days, each attracting a daily SSP payment.
Waiting days apply only to qualifying days, which are the days the employee is contracted to work. A Saturday or Sunday does not count as a waiting day for an employee who works only weekdays, since those are not qualifying days. The waiting day count only starts once a qualifying day arrives.
Linked periods of sickness, discussed below, affect whether waiting days must be served again for a subsequent absence.
Linked Periods of Sickness
If an employee returns to work after a period of sickness and then falls ill again within eight weeks (56 days), the two absences are treated as linked. This has two practical effects.
The employee does not serve another three waiting days at the start of the second absence. SSP is payable from the first qualifying day of the new sickness period.
The weeks of SSP already paid in the first absence count toward the 28-week maximum. If 10 weeks of SSP were paid in the first absence and the employee returns to work for five weeks before falling ill again, 18 weeks of SSP entitlement remain for the second absence.
Once a gap of more than eight weeks passes between periods of sickness, the link is broken. Any subsequent illness begins fresh: new waiting days apply, and the 28-week clock restarts.
Self-Certification and Fit Notes
UK employment law uses a tiered approach to medical evidence to avoid placing unnecessary pressure on GP surgeries for short-term illnesses.
For the first seven consecutive days of absence, including non-working days, no medical evidence is required. The employee self-certifies their illness, typically by completing an SC2 form or an equivalent document provided by the employer, confirming the dates and nature of the illness. Many employers manage this through HR systems or online portals.
If the absence extends beyond seven consecutive days, the employee must obtain a Statement of Fitness for Work, commonly known as a fit note. Fit notes can be issued by GPs, hospital doctors, registered nurses, occupational therapists, pharmacists, and physiotherapists.
A fit note will state either that the employee is not fit for work, or that they may be fit for work, taking into account of specific advice such as amended duties, altered hours, or remote working. If the employer cannot accommodate the recommended adjustments, the employee must be treated as not fit for work and their SSP continues.
Variable and Non-Standard Workers
Employees on zero-hours contracts, variable-hours arrangements, or agency assignments are entitled to SSP on exactly the same basis as employees on standard contracts, provided they meet the qualifying criteria.
The primary practical challenge for variable-hours workers is calculating earnings. Because weekly income fluctuates, the eight-week average earnings figure may vary considerably depending on the period used. An employee who happened to work fewer hours in the eight weeks before falling ill may have an average that falls below the £123 threshold, regardless of their normal earnings level.
Agency workers are employed by the agency, not the end client, for SSP purposes. The agency is responsible for paying SSP to an agency worker who falls ill during an assignment and meets the qualifying criteria. If an assignment ends while the worker is still sick, the agency’s obligation to pay SSP generally continues until the worker recovers or the 28-week limit is reached.
The 28-Week Maximum
SSP is payable for a maximum of 28 weeks, whether in a single continuous absence or across linked periods. Once the 28-week entitlement is exhausted, SSP ceases, and the employer must issue an SSP1 form.
The SSP1 form must be provided no later than the beginning of the 23rd week of the employee’s sickness absence, giving the employee time to apply for state benefits before their SSP runs out. The form documents the dates of sickness, the SSP paid, and the reason the entitlement is ending.
The primary benefit available after SSP ends is New Style Employment and Support Allowance (ESA), administered by the Department for Work and Pensions. New Style ESA is a contributory benefit based on the claimant’s National Insurance record over the preceding two to three years. Employees should be encouraged to begin their ESA application as soon as they receive the SSP1 form to avoid an income gap.
Employees who do not have a sufficient National Insurance record for New Style ESA may be eligible for the health element of Universal Credit, which takes household income and savings into account.
Employer Obligations
When an employee reports sick, a specific set of obligations arises for the employer.
SSP must be calculated accurately and paid on the normal payday, as if it were regular wages. It cannot be withheld as a disciplinary measure or delayed because of a dispute unrelated to the employee’s eligibility. An employer who refuses to pay SSP to a qualifying employee is in breach of their legal obligations.
Employers must keep records of all sickness absences lasting four or more days and all SSP payments made. These records may be requested by HMRC and must be retained for at least three years.
Employers have a duty of care toward employees who are absent through illness. This includes maintaining reasonable contact to check on welfare, without applying pressure to return prematurely. When the employee returns, a return-to-work conversation should be conducted to confirm they are fit, discuss any recommendations in the fit note, and identify reasonable adjustments, if relevant.
If an employer determines that an employee does not qualify for SSP, they must provide the employee with an SSP1 form within seven days of the absence beginning, setting out the reason for the decision. This form enables the employee to claim state benefits if they are not entitled to SSP.
Company Sick Pay
Many employers offer sick pay schemes that exceed the statutory minimum. These are known as occupational or company sick pay arrangements. A common structure provides full pay for a defined initial period, reducing to half pay for a further period, with SSP thereafter.
Where company sick pay is paid, it encompasses the statutory entitlement. The employee receives the higher company rate rather than SSP as a separate addition. The employer continues to account for and remit the SSP element through payroll as part of their HMRC reporting obligations, but the employee’s total payment is the company sick pay figure.
The terms of any occupational sick pay scheme should be set out clearly in the employment contract or staff handbook, including any service length requirements that must be met before the enhanced rate applies.
Holiday Accrual and Sick Leave
Annual leave continues to accrue at the normal statutory rate throughout a period of sickness absence. An employee who is unable to take their annual leave entitlement during the current leave year because of illness is entitled to carry over up to four weeks of unused statutory leave into the following year.
An employee who falls ill during a period of annual leave that has already been booked may ask their employer to reclassify those days as sick leave rather than annual leave. If the employee meets the qualifying criteria, SSP is payable for those days. This allows the employee to retain their holiday entitlement for use when they are well. Normal sickness reporting and evidence requirements apply even during annual leave, which may require the employee to notify the employer from abroad if they become ill while away.
Illness and Redundancy
An employer can legitimately make an employee redundant while they are off sick, provided the redundancy is genuine and relates to the business’s needs rather than the individual’s illness. An employee cannot be selected for redundancy because they are absent through illness, as this would constitute unfair dismissal and may amount to disability discrimination if the condition meets the relevant legal threshold.
Employees on sick leave must be included in any redundancy consultation process and treated on the same basis as active employees. Where redundancy occurs during a period of sickness absence, SSP payments from that employer end on the termination date, and the employer must issue an SSP1 form to support any subsequent state benefit claim.
Mental Health and SSP
SSP applies equally to mental health conditions and physical illness. An employee absent due to severe stress, clinical depression, anxiety, or burnout is entitled to SSP on exactly the same basis as an employee with a physical condition.
The self-certification and fit note requirements are identical for mental health absences. A GP or other qualified health professional can issue a fit note for a mental health condition in the same way as for a physical one.
Employers should approach mental health absences with the same standard of care as physical illness, maintaining confidentiality, avoiding pressure to return before the employee is ready, and giving proper consideration to any adjustments recommended in a fit note. Mental health conditions may qualify as disabilities under the Equality Act 2010, which creates additional obligations around reasonable adjustments and protection from less favourable treatment related to the condition.
Resolving Disputes
If an employee believes they are entitled to SSP but their employer disagrees, the process for resolving the dispute follows a clear path.
The employer must provide an SSP1 form setting out the reason SSP is not being paid. The employee should review the form, check their own earnings records, and, if they believe the decision is incorrect, raise the matter with their employer directly. Payroll errors, particularly in the earnings calculation, are a common source of disputes that can often be resolved through a straightforward review of payslips.
If the employer maintains their position and the employee believes it is wrong, the matter can be referred to HMRC’s Statutory Payment Dispute Team. HMRC will review the evidence and issue a formal decision. Where HMRC determines that the employee is entitled to SSP, the employer must pay it and may face a penalty for non-compliance.
A Note on Payroll Systems
SSP involves several calculations that are prone to error when handled manually: the eight-week earnings average, the identification of qualifying days, the tracking of waiting days, and the monitoring of linked periods and the 28-week maximum. Payroll software that automates these calculations reduces the risk of error and ensures that the statutory framework is applied consistently across the workforce.
For employers managing multiple employees, automated tracking of sickness records also supports compliance with HMRC’s record-keeping requirements and simplifies identifying when an SSP1 form needs to be issued as the 23-week point approaches.
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