Understanding Statutory Sick Pay for Employers

Statutory Sick Pay (SSP) in the UK is designed to support employees while they are absent from work due to illness. As prescribed by law, SSP ensures that eligible employees receive a basic level of income while they recover.

Employers are required to pay SSP to eligible employees for up to 28 weeks. As of April 2024, the standard weekly rate of SSP is £116.75, which begins after the first three unpaid days of sickness absence.

For employers, Statutory Sick Pay can present a number of challenges, from calculating SSP entitlements to accurate record-keeping. Mistakes in eligibility or payment calculations can lead to penalties, while handling long-term absences demands careful management to support employees and minimise operational disruption.

In this guide for employers, we take a practical look at Statutory Sick Pay, including the eligibility criteria and current SSP rates, as well as common challenges employers face when managing SSP.

 

Section A: What is Statutory Sick Pay?

 

Statutory Sick Pay (SSP) is a legal entitlement in the UK that provides financial support to eligible employees who are unable to work due to ill-health.

 

1. Overview of SSP in the UK

 

SSP was introduced in the UK as part of the broader welfare system, aimed at providing financial assistance to workers during times of need. The SSP regime was specifically established to address the financial risks associated with illness and to alleviate the burden on employees who might otherwise struggle to meet their financial obligations while unable to work.

The payment amount is set by the government and is typically reviewed and increased in April each year.

The current rate of SSP in the UK is £116.75 per week. Qualifying employees can receive SSP for a maximum of 28 weeks.

To qualify for SSP, employees must meet certain criteria, including having worked for their employer for a specified period and earning above the Lower Earnings Limit (LEL).

Employers are responsible for administering SSP payments, which are made directly to the employee during their period of sickness.

 

2. Reclaiming the Cost of SSP

 

The UK government offers a mechanism for employers to reclaim some of the costs associated with Statutory Sick Pay (SSP). Employers can reclaim SSP if their total SSP payments to employees exceed a specific threshold within a tax year, which is currently set at £1,000 of SSP paid in a single tax year as of April 2024.

Small employers, defined as those with fewer than 250 employees, are allowed to reclaim 100% of the SSP they pay, while larger employers can reclaim 92% of the SSP paid for employees who are off work due to illness.

The reimbursement process involves employers reporting their SSP payments through their payroll system – typically via the employer’s monthly or quarterly PAYE (Pay As You Earn) submissions to HM Revenue and Customs (HMRC) – and calculating the amount eligible for reclaim.

Employers may also have the option to adjust their payroll to reduce their National Insurance contributions to recover SSP costs.

 

Section B: Eligibility Criteria for Employers

 

Statutory Sick Pay is only available to employees who meet the qualifying criteria.

 

1. Who Qualifies for SSP?

 

To qualify for Statutory Sick Pay, employees must meet certain requirements, including:

 

Table: SSP Eligibility Criteria

Criteria	Details
Employment Status	Must be an employee (not self-employed).
Minimum Earnings	Must earn at least £123 per week (as of April 2024).
Sickness Duration	Must be off work due to illness for at least four consecutive days.
Notification Requirements	Must notify the employer within seven days of the first day of absence.
Length of Employment	Must have been continuously employed for at least four consecutive weeks prior to illness.

 

a. Employment Status

The individual must be classified as an employee, which distinguishes them from self-employed individuals or independent contractors who are not eligible for SSP.

 

b. Minimum Earnings

Employees must earn an average of at least £123 per week, which is known as the Lower Earnings Limit (LEL). If an employee’s average earnings fall below this threshold, they will not qualify for SSP.

Employers should note that the LEL is subject to review and may change in line with government policy.

 

c. Sickness Duration

Employees must be absent from work due to illness for at least four consecutive days – including non-working days – to be eligible for SSP. This requirement ensures SSP is only used in cases of longer-term absences that require more extended support.

 

d. Notification Requirements

Employees must inform their employer of their illness and absence from work within a reasonable timeframe, typically within seven days of the first day of absence. Employers may require evidence of the illness, such as a doctor’s note or self-certification, depending on the length of absence.

Employers are advised to have an absence policy in place that specifies the employee’s obligations to notify them of their absence and the procedure to do this.

 

e. Continuity of Employment

Employees must have been continuously employed by the same employer for at least four consecutive weeks prior to their illness to qualify for SSP.

 

2. SSP Requirements

 

In addition to meeting the general criteria outlined above, there are specific requirements employees must fulfil to receive Statutory Sick Pay:

 

a. Sick Leave Documentation

Employees can self-certify for absences of up to 7 consecutive days. Employers should have a clear procedure in place for employees to self-certify from work due to illness.

For absences of more than 7 days – including non-work days – a fit note from an authorised healthcare professional would be required. Under current rules, only the following can issue fit notes for work:

 

i. GP or hospital doctor

ii. Registered nurse

iii. Occupational therapist

iv. Pharmacist

v. Physiotherapist

 

b. Compliance with Employer Policies

Employees must adhere to their employer’s sick leave policies and procedures, which typically include requirements about notifying of any absence and following any specific protocols outlined in the employment contract or employee handbook.

 

c. No Disqualifying Factors

Certain circumstances may disqualify employees from receiving SSP, such as being on parental leave, being suspended from work, or receiving pay or compensation through other means, such as workplace injury claims.

 

Section C: Employer Responsibilities

 

While a significant proportion of SSP can be reclaimed from the government, employers are primarily responsible for administering and managing Statutory Sick Pay (SSP) within their organisation. The key areas of responsibility are as follows:

 

1. Notification Process for Employees

 

Employers must establish a clear notification process to ensure that employees report their sickness absence promptly and accurately. The key components of this process include:

 

a. Communication of Procedures

Employers should communicate their sick leave policy to all employees, outlining the steps that need to be taken in the event of illness. This may include specifying who to contact, how to report sickness (e.g., via phone, email, or an online system), and the timeline for notifications.

 

b. Timely Reporting

Employees are generally required to inform their employers of their illness as soon as possible, typically within seven days of the first day of absence. Employers should encourage employees to report any absence due to sickness immediately, even if they are unsure about the duration.

 

c. Provision of Evidence

Employers may require employees to provide documentation to support their sick leave. For absences lasting more than seven consecutive days, a fit note from a healthcare provider is usually necessary. Clear guidelines on what constitutes acceptable evidence should be provided to employees.

 

d. Follow-Up Communication

Employers should maintain communication with employees during their absence to check on their wellbeing and provide support. This can help reinforce a positive workplace culture and assist in the return-to-work process.

 

2. Record-Keeping and Documentation

 

Accurate record-keeping and documentation are vital for employers managing SSP claims, including:

 

a. Sick Leave Records

Employers should maintain comprehensive records of all employee sick leave, including dates of absence, reasons for illness, and any documentation provided (such as fit notes or self-certifications). This helps to track SSP eligibility and ensures compliance with legal requirements.

 

b. Payment Records

Employers must keep detailed records of SSP payments made to employees, including the amount paid, payment dates, and any deductions. These records are essential for auditing purposes and for addressing any disputes that may arise.

 

c. Confidentiality

Employers are required to handle sick leave records and documentation with confidentiality. Employees’ health information is sensitive, and employers should ensure that access is restricted to authorised personnel only.

 

d. Review and Compliance

Regularly reviewing sick leave records and policies can help employers identify trends and ensure compliance with SSP regulations. This can also assist in developing strategies for employee wellness and reducing sickness absence.

 

3. Payment Processes and Timelines

 

Employers are legally required to pay SSP to employees who meet the eligibility criteria. Key aspects include:

 

a. Payment Amount

As part of their legal obligations, employers are responsible for calculating the correct amount of SSP.

For the year from April 2024, the standard rate for SSP is £116.25 per week. Employers must ensure that they are paying the correct amount based on the employee’s eligibility.

 

b. Payment Frequency

SSP payments are typically made in line with the employer’s payroll schedule (weekly or monthly). Employers should integrate SSP payments into their payroll system to ensure timely processing.

 

c. Payment Start Date

SSP begins on the fourth day of sickness absence. Employers must calculate the start date for SSP payments accurately, taking into account any unpaid waiting days.

 

d. Duration of Payments

SSP can be paid for a maximum of 28 weeks per period of sickness. Employers need to monitor the duration of payments closely and communicate with employees regarding their remaining entitlement.

 

e. Deductions and Adjustments

If an employee is receiving other payments (e.g., occupational sick pay or benefits), employers may need to adjust SSP payments accordingly. Clear communication regarding any deductions should be provided to the employee.

 

Section D: SSP Rates and Payment Periods

 

Employers have to ensure they are paying the correct amount of Statutory Sick Pay, as failing to do so could lead to compliance issues and result in grounds for complaint.

 

1. Current Rate of SSP

As of April 2024, the standard rate for Statutory Sick Pay (SSP) is £116.75 per week. This rate is set by the UK government and is subject to periodic reviews, typically resulting in an increase in the SSP rate in April each year.

Employers have to be proactive in staying updated on any changes to the SSP rate, as this can impact payroll and budgeting.

 

2. Duration for Which SSP Can Be Claimed

Statutory Sick Pay can be claimed for a maximum of 28 weeks during a single period of sickness. This means that if an employee is unable to work due to illness for an extended period, they can receive SSP for up to 28 weeks, provided they meet the eligibility criteria throughout that time. However, there are a few important points to consider.

The 28-week period starts from the first day of illness that qualifies for SSP. If an employee has multiple periods of sickness, the duration of SSP eligibility will be cumulative, meaning any previous SSP received during that time will count against the 28-week limit.

If an employee returns to work for at least eight weeks, a new claim for SSP can be initiated for a subsequent period of sickness, allowing them to potentially receive another 28 weeks of SSP.

Employees must inform their employers promptly about their sickness and continue to meet eligibility criteria throughout the claim period.

 

Table: SSP Payment Details

Payment Aspect	Details
Current Rate	£116.75 per week (as of April 2024).
Start Date for Payments	Payments begin on the fourth consecutive day of absence.
Maximum Duration	SSP can be claimed for a maximum of 28 weeks per period of sickness.
Payment Frequency	Payments should be made in line with the employer’s normal payroll schedule (weekly/monthly).

 

3. How to Calculate SSP Payments

First, confirm that the employee meets all the eligibility criteria for SSP, including average earnings above the Lower Earnings Limit (£123 per week as of April 2024) and the required period of sickness absence.

Identify the duration of the employee’s sickness absence, specifically noting that SSP begins on the fourth consecutive day of absence. The first three days are classified as waiting days and are unpaid.

SSP is paid at a flat rate of £116.75 per week. This amount is not prorated for part-time employees; however, if an employee’s earnings fluctuate, it may be necessary to calculate their average earnings to confirm SSP eligibility.

SSP should be paid in line with the employer’s normal payroll cycle, whether that is weekly or monthly. If an employee is eligible for a partial week of SSP, the payment should be prorated based on the number of days they were absent, starting from the fourth day.

For example, if an employee is off work for a week (7 days), they would receive SSP for the full week starting from the fourth day, amounting to £116.75.

Employers should be aware of any necessary deductions that may apply to SSP payments, such as taxes or National Insurance contributions. It is essential to ensure that these deductions comply with current tax laws.

 

4. Implications of Underpaying SSP

Employers are legally obligated to pay SSP to all eligible employees, and failing to do so can result in HMRC investigations. Non-compliance with SSP regulations can lead to financial penalties, forcing the business to incur unexpected costs. The employer may also be required to make back payments to cover the underpayment amount. In some cases, employees might even seek compensation for financial losses incurred due to insufficient SSP payments.

Beyond legal and financial consequences, underpaying SSP can also damage an employer’s reputation. Internally, pay issues can impact workforce morale and trust.

Externally, public knowledge of underpayments can be damaging to the brand, affecting recruitment efforts and the business’s overall reputation.

Underpayment of SSP also creates an increased administrative burden for employers. Disputes over pay can lead to time-consuming grievance procedures, and if issues escalate, employers may face legal challenges, which require additional resources to resolve.

In cases where underpayment is widespread, employers may need to conduct internal audits to rectify the problem, creating further administrative costs.

For employees, underpayment of SSP can have direct and immediate financial impacts. Since SSP is intended to provide financial support during periods of illness, underpayment can lead to financial hardship. Employees may struggle to meet essential living expenses, creating stress and anxiety that negatively affects their mental wellbeing. This financial strain may also disrupt an employee’s recovery, as they may feel pressure to return to work before fully recovering, which could prolong their illness and lead to future absenteeism.

Underpaid employees may also lose out on other rights and benefits. For instance, SSP payments are considered part of an employee’s income, and underpayment can affect eligibility for means-tested benefits like Universal Credit, compounding any financial difficulties an employee already faces.

 

Section E: SSP & Other Schemes & Benefits

 

Statutory Sick Pay does not always operate in isolation. As a welfare provision, SSP can also interact with other benefits and sickness schemes, depending on the employee’s circumstances.

 

1. SSP Impact on Company Sick Pay (CSP)

Many employers offer their own sick pay schemes, commonly known as Company Sick Pay (CSP). These schemes may provide more generous benefits than SSP and can cover an employee’s full salary for a specific period during sickness absence.

If an employee is entitled to both CSP and SSP, the employer may choose to pay the CSP amount, which can overlap with SSP. In such cases, the employer must ensure that they comply with the terms of their own sick pay policy while also adhering to SSP regulations.

Some employers may opt to offset SSP against their CSP payments, meaning that if the employee is receiving CSP, their SSP entitlement may be reduced. However, this practice must be clearly outlined in the company’s sick pay policy.

 

2. SSP Impact on Universal Credit

Universal Credit is a means-tested benefit that provides financial support to individuals with low income or those who are out of work. SSP can impact an employee’s eligibility for Universal Credit.

When employees are receiving SSP, this income will be taken into account when calculating their overall earnings for Universal Credit purposes. As a result, receiving SSP may reduce the amount of Universal Credit an employee is eligible to receive.

Employees should report any SSP payments to the Universal Credit office to ensure that their benefits are calculated accurately.

 

3. SSP Impact on National Insurance Contributions

Statutory Sick Pay (SSP) also has implications for National Insurance (NI) contributions, which are essential for accessing various state benefits, including the State Pension and certain health benefits.

When an employee is receiving SSP, it counts as qualifying earnings for National Insurance purposes. This means that employees are considered to be making NI contributions while they are on SSP, provided they meet the earnings threshold.

Employers are responsible for deducting the appropriate NI contributions from SSP payments. However, as SSP is below the earnings threshold for paying NI (currently set at £123 per week), no NI contributions are typically due on SSP itself.

While employees do not pay NI contributions on their SSP payments, the period during which they receive SSP counts toward their NI record. This ensures that employees maintain their eligibility for state benefits during periods of illness.

Employers are required to pay Class 1 National Insurance contributions on employees’ earnings, including SSP. However, if the employee’s earnings are solely from SSP and fall below the Lower Earnings Limit, employers will not be liable for NI contributions on that amount.

Employers should consider the implications of SSP on their overall payroll costs, including potential National Insurance contributions, to ensure accurate financial planning and compliance with regulations.

 

Section F: Common Issues and Challenges

 

SSP can be a straightforward payroll matter, but there are wider risks and factors for employers to consider to ensure employees receive their full entitlement to financial support while off work ill and ensure compliance with the latest rules. Typical challenges employers face with SSP include:

 

Table: Common Issues Faced by Employers

Issue	Description
Understanding Eligibility	Confusion over eligibility criteria leading to incorrect assessments.
Record-Keeping Challenges	Difficulties in maintaining accurate sick leave records.
Communication Gaps	Insufficient communication regarding sick leave policies and processes.
Integration with Payroll	Challenges in integrating SSP payments into existing payroll systems.
Managing Long-Term Absences	Issues related to handling prolonged sickness absence and its impact on the workplace.

 

1. Eligibility Criteria

Many employers struggle to fully grasp the eligibility requirements for SSP, including the intricacies of employee earnings, duration of sickness, and the necessary documentation. This lack of understanding can lead to incorrect assessments and potential compliance issues.

Employers should create and communicate clear policies regarding sick leave and SSP claims. This includes outlining eligibility criteria, notification processes, and the documentation required. Having a well-defined policy can help prevent misunderstandings and disputes.

 

2. Record-Keeping

Maintaining accurate and comprehensive records of employee absences and SSP payments can be cumbersome. Employers may find it difficult to track multiple sick leave cases, especially in larger organisations, leading to errors in payment calculations and documentation.

Ensure that all relevant documentation is reviewed thoroughly when assessing an SSP claim. This includes examining employee records, communication logs, and any provided medical certificates. Keeping detailed records will help in resolving disputes more effectively.

 

3. Communication Gaps

Miscommunication can result in employees not reporting their absences correctly or failing to provide necessary documentation on time.

Encourage an environment where employees feel comfortable discussing their sick leave and any concerns related to SSP. Regular check-ins with employees during their absence can provide clarity and allow employers to address issues proactively.

 

4. Integration with Payroll Systems

Employers may encounter difficulties integrating SSP payments with their payroll systems, particularly if they are using outdated or incompatible software. This can lead to delays in payments and increased administrative burdens.

 

5. Overlapping Benefits

When employees are eligible for multiple benefits, such as Company Sick Pay or Universal Credit, employers may find it challenging to determine how SSP interacts with these benefits. Mismanagement in this area can lead to employee dissatisfaction and potential legal issues.

 

6. Managing Long-Term Absences

SSP should be considered in the wider context of the organisation’s absence management programme.

Prolonged sickness absence can create challenges for employers, including the need for additional planning to cover workloads and the potential impact on team dynamics. Employers may also be uncertain about how to handle ongoing SSP claims for employees who remain off work for extended periods.

Recognise that employees may have varying needs during their recovery. Offer flexibility in terms of work arrangements, such as remote work or gradual return-to-work plans, to accommodate individual circumstances and facilitate the return to work.

Keep track of employee absences and identify any patterns that may indicate underlying issues, such as frequent short-term sick leave. This information can be valuable for addressing potential health concerns and developing appropriate support strategies.

 

7. SSP Disputes

Establish a review and appeal process for employees who believe their SSP claims have been incorrectly assessed. This process should be transparent and allow employees to present additional evidence or documentation if necessary.

Regular training sessions for managers and HR staff on SSP regulations and best practices can enhance their understanding and ensure compliance. This proactive approach can help prevent disputes from arising in the first place.

If disputes arise regarding SSP claims that cannot be resolved through direct communication, employers should seek advice from human resources professionals or specialist employment law advisers for guidance on the correct procedures to follow.

Depending on the circumstances, mediation may be an option to consider to resolve the matter. This involves a neutral third party to facilitate discussions between the employer and employee, helping to find an amicable solution.

 

Section G: Summary

 

Statutory Sick Pay (SSP) is a legal entitlement in the UK that provides financial support to employees who are off work due to illness.

For UK employers, managing SSP comes with several risks and considerations. One key issue is ensuring compliance with the legal framework. Employers must determine whether employees meet eligibility criteria, including earning above the Lower Earnings Limit of £123 per week and having been absent for four consecutive days. Failing to follow these regulations can result in legal penalties and damage to the business’s reputation.

There is also the administrative burden of accurately calculating payments, maintaining detailed records, and integrating SSP with other company benefits, such as Company Sick Pay (CSP).

Importantly, SSP should form an integrated aspect of the organisation’s absence management strategy, ensuring that short to long-term absence is monitored and managed.

 

Section H: Need Assistance?

 

For expert guidance on any aspect of Statutory Sick Pay, including employee entitlement, SSP rates, periods or calculations, or to discuss how SSP interacts with your wider absence management programme, speak to our employment law specialists.

 

Section I: FAQs

 

What is Statutory Sick Pay (SSP)?
Statutory Sick Pay (SSP) is a mandatory payment made by employers in the UK to eligible employees who are unable to work due to illness. It is designed to provide financial support during periods of sickness absence.

 

Who qualifies for SSP?
To qualify for SSP, employees must be classified as employees (not self-employed), earn at least £123 per week (as of April 2024), and be off work due to illness for at least four consecutive days. They must also have been continuously employed for at least four weeks before the illness began.

 

How much is Statutory Sick Pay?
As of April 2024, the standard rate for SSP is £116.75 per week. This amount is subject to periodic reviews by the government, so employers should stay informed about any changes.

 

How long can an employee receive SSP?
Employees can claim SSP for a maximum of 28 weeks during a single period of sickness. If an employee has multiple periods of sickness, the cumulative duration of SSP payments should be monitored to ensure compliance with this limit.

 

What is the process for claiming SSP?
Employees should notify their employer as soon as possible if they are unable to work due to illness, typically within seven days of the first day of absence. Employers may require documentation, such as a self-certification or fit note from a healthcare provider, depending on the length of the absence.

 

What happens if an employee receives Company Sick Pay (CSP)?
If an employee is eligible for both Company Sick Pay and SSP, employers need to determine how these payments will interact. Some employers may choose to offset SSP against CSP payments, but this should be clearly outlined in the company’s sick pay policy.

 

Does receiving SSP affect other benefits?
Receiving SSP may impact an employee’s eligibility for other benefits, such as Universal Credit. SSP is considered income, which can reduce the amount of Universal Credit an employee is entitled to receive.

 

Are National Insurance contributions applicable to SSP?
Employees do not pay National Insurance contributions on SSP payments if the amount is below the Lower Earnings Limit. However, SSP counts as qualifying earnings for National Insurance purposes, ensuring that periods on SSP contribute towards the employee’s NI record.

 

What should employers do if there is a dispute regarding an SSP claim?
Employers should establish clear policies regarding sick leave and SSP to minimise misunderstandings. If a dispute arises, open communication and a review process should be implemented. Consulting HR or legal advisors can also help in resolving disputes effectively.

 

How can employers support employees during sickness absence?
Employers can support employees by fostering open communication, checking in regularly during their absence, providing access to resources such as Employee Assistance Programmes (EAPs), and offering flexible work arrangements for a smoother return to work.

 

Section J: Glossary

 

Term	Definition
Statutory Sick Pay (SSP)	A legally mandated payment made by employers to eligible employees in the UK who are unable to work due to illness.
Company Sick Pay (CSP)	An additional sick pay scheme offered by some employers, which may provide more generous benefits than SSP.
Fit Note	A medical certificate issued by a healthcare professional that confirms an employee’s illness and their fitness for work.
Self-Certification	A process by which an employee declares their sickness for up to seven consecutive days without requiring a fit note from a doctor.
Lower Earnings Limit (LEL)	The minimum weekly earnings threshold (£123 as of April 2024) that employees must meet to qualify for Statutory Sick Pay.
Waiting Days	The first three consecutive days of sickness absence for which no SSP is paid; SSP payments begin on the fourth consecutive day of absence.
Maximum Payment Period	The longest period for which SSP can be paid, set at 28 weeks per period of sickness.
National Insurance (NI)	Contributions made by employees and employers to fund state benefits, including the State Pension; periods on SSP count towards NI contributions.
Universal Credit	A government benefit designed to provide financial support to individuals with low income or out of work; SSP payments may reduce eligibility for this.
Reimbursement	The process by which employers can reclaim some or all of the SSP they have paid to employees, subject to certain conditions.
Employee Assistance Programme (EAP)	A workplace benefit that provides employees with support services, such as counselling or legal advice, to help with personal or work-related issues.
Payroll System	The software or system used by employers to calculate and pay employee wages, including SSP.
Return-to-Work Plan	A strategy implemented to help employees transition back to work after a period of sickness absence, often involving phased reintegration.

 

Section K: Additional Resources

 

UK Government – Statutory Sick Pay (SSP)
https://www.gov.uk/statutory-sick-pay
A comprehensive guide to Statutory Sick Pay, including eligibility, payment rates, and employer obligations, provided by the official UK Government website.

 

ACAS – Statutory Sick Pay
https://www.acas.org.uk/statutory-sick-pay
Guidance from ACAS on SSP, with advice for both employers and employees on managing sick leave and complying with SSP regulations.

 

HMRC – Payroll and SSP
https://www.gov.uk/payroll-software/why-use-payroll-software
Official information from HMRC on how employers can use payroll software to manage SSP payments and stay compliant with PAYE reporting.

 

CIPD – Statutory Sick Pay Overview
https://www.cipd.co.uk/knowledge/fundamentals/emp-law/absence/factsheet
A detailed factsheet from the Chartered Institute of Personnel and Development (CIPD) explaining the employer’s responsibilities for managing sick pay and absence.

 

Health and Safety Executive (HSE) – Managing Sickness Absence
https://www.hse.gov.uk/sicknessabsence/
Official guidance from the HSE on how to manage sickness absence effectively, focusing on creating healthy work environments and reducing workplace illness.

 

Mind – Support for Employers on Mental Health and Sick Leave
https://www.mind.org.uk/workplace/mental-health-at-work/taking-care-of-your-staff/
Resources from Mind on how employers can support employees experiencing mental health issues, with advice on handling long-term sickness absence compassionately.