How to Calculate Statutory Sick Pay (SSP)

April 2026 brought a wave of changes to the Employment Rights Act 2025, and the rules around SSP have changed significantly. If your payroll process hasn’t been updated, you may already be underpaying eligible employees.

Statutory Sick Pay (SSP) offers employees continuity of pay during sick leave absences. For employers, the challenge is making sure SSP is calculated and paid correctly, especially because sickness patterns, payroll schedules, and employee eligibility can vary. Getting it wrong could mean payroll errors, employee complaints, lack of trust – and even action from HMRC.

So, how can you accurately calculate statutory sick pay? First, let’s explore what’s changed in the 2026 legislation.

What’s changed in SSP since April 2026?

What are the criteria for receiving Statutory Sick Pay?

Since April 2026, the SSP rules have changed. There’s no longer a minimum earnings threshold, so employees do not need earnings of at least £123 per week to qualify as they have previously. Instead, SSP is available to eligible employees who have started work, are treated as employed for tax purposes, and report sickness properly.

To qualify for SSP, an employee must generally:

• Have started work for the employer
• Be treated as employed for tax purposes – usually meaning they are paid through PAYE
• Tell their employer they are sick within the required time limit
• Provide evidence of illness if the employer asks for it, usually after seven days

It’s also worth noting that employees can still qualify, even if they haven’t yet been paid for eight weeks. Additionally, annual leave taken during sickness doesn’t break a period of incapacity for work.

If an employee remains unable to return to work after SSP ends, they may be able to claim other support such as Employment and Support Allowance or Universal Credit.

How is SSP calculated?

As of 6 April 2026, the minimal required payment for SSP is whichever option is lower of:

• 80% of average weekly earnings
• £123.25 per week

SSP can be paid for up to 28 weeks in one sickness period. The Period of Incapacity for Work (PIW) is no longer calculated from four days of consecutive sickness; instead, eligible employees have SSP rights from day one of absence as of 6 April 2026.

How to calculate SSP: Step-by-step for employers

Although the UK Government includes a handy sickness pay calculator tool, there will be some instances where you have to calculate this manually. Assuming your employees fit into the criteria for SSP, you’ll need to follow a set formula to calculate sick pay entitlements.

1. Work out the employee’s SSP figure

To find your employee’s SSP allowance, you need their average weekly earnings. Multiply that number by 0.8 to get 80% of their weekly earnings, then compare it with the weekly SSP rate of £123.25. If 80% of their weekly rate is lower, use that – otherwise, they are entitled to the full £123.25.

2. Divide the weekly amount by the employee’s typical weekly working days

If your employee works five days a week and is eligible for the full SSP rate, for example, you would divide £123.25 by 5. This will give you the employee’s daily rate of £24.65.

3. Multiply the daily rate by the number of SSP-eligible days in the pay period

The next stage is to calculate an employee’s SSP allowance. If your employee has been off for ten total days that they would otherwise be working, times their day rate by 10 to find the total SSP owed. In this case, the employee would be granted £246.50.

When do you need to calculate statutory sick pay?

Statutory Sick Pay will need to be calculated and paid from the first day an employee reports sickness, as long as they are eligible. This is a change that came into effect from April 2026, so make sure you are compliant with the new requirements going forward.

However, if an employee arrives for work and is taken ill after they’ve clocked in, this isn’t recorded as a sick day. Instead, calculations will begin from the second day of illness and employers will calculate SSP from this point.

It’s worth noting that employers are also responsible for paying SSP if they pay Class 1 National Insurance contributions for their employees (or equivalent depending on age and earnings).

Using payroll software for statutory sick pay calculation

Rather than manually calculating sick pay allowance, utilising payroll software ensures all relevant and clear information is displayed on an employee’s payslip. There are many benefits for both employers and employees, as payroll software will reduce the likelihood of human error, guaranteeing accurate sick pay for those experiencing a Period of Incapacity for Work (PIW).

Managing different periods of sick leave times

Sickness isn’t linear, and there will be some years where employees require more sick days than others. Managing different periods of sick leave can be challenging for employers, especially for record-keeping purposes. Payroll software provides employers and payroll staff with automatic calculations that are specific to each employee’s requirements. It will consider if sick leave has also been taken alongside other forms of leave, including bereavement or compassionate leave.

Managing sick pay alongside parental leave

With so many twists and turns facing employees throughout the year, there will inevitably be times when multiple absences are taken. In this instance, payroll software can support calculating SSP after an employee has taken a form of parental leave, offering complete peace of mind with pay calculations. Whilst the UK Government’s tool is helpful, it doesn’t cover or understand the full picture of an employee’s year or working pattern.

Statutory annual leave calculations

Contrary to popular belief, holiday allowances can still be accrued whilst an employee is on SSP. Whether you employ ad-hoc workers or full-time staff, you’ll need to calculate annual leave allowance alongside sick days taken. Payroll software offers this solution by supporting employers with trackers as well as scheduled holiday pay. As well as supplying a consolidated solution to payroll, it also keeps calculations simple and automated.

When an SSP ends or an employee is no longer eligible

Employers are required to submit an SSP1 form to an employee claiming SSP at least seven days before it is due to end. The SSP1 form ensures employees who are experiencing a prolonged period of work absence can receive benefits until they are fit and able to return.

Payroll software can support employers with routine SSP1 form submission and tracking employees who have been off sick for an extended period.

Accurate SSP payments

Removing the possibility of human error ensures both employers and employees are protected from incorrect payroll occurring. Payroll software considers the correct calculations for employees based on their circumstances and leave agreements, ensuring accurate SSP is delivered on time with payday.

Staffology Payroll helps you with continuity of pay for employees on sick leave

Our software supports employers, ensuring you are fully covered when it comes to managing staff absences. Your employees will also experience continuity of pay that accurately reflects Statutory Sick Pay on their payslips.

Staffology handles SSP calculations automatically — request a demo and find out how.

FAQs about SSP

Does SSP now start from day one of absence?

Yes, from 6 April 2026, the three waiting days have been removed. Eligible employees are entitled to SSP from their first day of sickness absence. This is one of the most significant changes employers need to update their payroll processes for, as any employee who was previously not paid for the first three days of absence will now need to be paid from day one.

What’s the SSP rate in 2026?

From April 2026, the SSP rate is the lower of 80% of the employee’s average weekly earnings or £123.25 per week. For most employees earning above around £154/week, the flat £123.25 rate will apply. For lower earners, you will need to calculate 80% of their average weekly earnings and pay that instead.

Do part-time or low-paid employees now qualify for SSP?

Yes. The minimum earnings threshold (previously £123/week) was removed from April 2026. Any employee who has started work and is paid through PAYE can now qualify for SSP, regardless of how much they earn. This means part-time workers, those on variable hours, and lower-paid employees who were previously excluded may now be eligible.

What happens if sick leave overlaps with parental leave?

SSP cannot be paid at the same time as Statutory Maternity Pay (SMP), Statutory Paternity Pay (SPP), or other statutory parental payments – whichever payment applies takes priority. However, if an employee falls ill before their parental leave begins, SSP may apply during that pre-leave period. Payroll software handles these overlapping scenarios automatically and is the most reliable way to ensure compliance.

Does annual leave continue to accrue during SSP?

Yes. Employees continue to accrue statutory annual leave entitlement while they are off sick and receiving SSP. They also have the right to carry over leave that they were unable to take due to sickness. Employers need to factor this into absence management – payroll software with integrated leave tracking makes this considerably easier to manage accurately.

When do I need to issue an SSP1 form?

You must issue an SSP1 form to an employee at least seven days before their SSP entitlement is due to end – for example, when they are approaching the 28-week limit, or if they become ineligible for another reason. The SSP1 form allows the employee to claim Employment and Support Allowance (ESA) or Universal Credit while they remain unable to work. Failing to issue it on time can leave employees without a benefits bridge and may expose the employer to complaints.

Can HMRC take action if SSP is calculated incorrectly?

Yes. Employees can report SSP disputes to HMRC, which has the power to investigate and require employers to make up any underpayments. Deliberate non-payment or persistent errors can result in formal enforcement action. Given the April 2026 rule changes – particularly the removal of waiting days and the earnings threshold – it is important that payroll processes are reviewed and updated to reflect the new requirements.