What is Statutory Sick Pay and how does it work?

Statutory Sick Pay (SSP)

• Employers are required to pay SSP contributions for all UK staff.
• Employees qualify for SSP after 4 days' off work sick.
• A medical or FIT note is required.

Join us to learn about current SSP rates, who qualifies and how to manage sickness admin for UK SMEs.

We're covering:

• How to pay SSP 
• Why we have SSP
• What is the current SSP rate?
• Claiming back SSP
• Who qualifies
• When to start paying SSP
• What is occupational sick pay?
• Managing sickness remotely

Need to understand the changes to SSP and absences for COVID-19? Click here.

Paying staff who are off sick

This is a legal requirement for any UK business. If you have an employee and they are off work sick for more than 4 days in a row, SSP sets out to provide financial peace of mind during recovery.

By law, employers are required to offer the minimum SSP to qualifying workers. At a measly £94.25 per week - that's before tax and NI deductions - the minimum SSP doesn't exactly provide the financial security you'd hope.

Fortunately, there are some organisations that recognise this is way behind national minimum wage, not to mention national living wage.

We've done the maths and worked out that if we divide the SSP by a typical full-time employees working week, it's the equivalent of £2.51 per hour.

A sum so blunt it doesn't cut the mustard, let alone pay the bills. And don't worry, we're not moaning purely for whining's sake. It comes back to your people. If you're not careful, employees who require SSP could find that the financial implications and increased stress only anchors them further.

It's not all doom and gloom. We've found that most millennial-focused organisations avoid high staff-turnover and safeguard their team by adding an higher entitlement wage for their occupational sick pay scheme.

What is the purpose of SSP?

SSP was first introduced in 1983 when employers were responsible for paying sick pay for the first eight weeks of illness. This was extended to the current 28 weeks in 1985.

The idea behind SSP is to offer a safety net for staff who are off sick for four or more days so they can recover, safe in the knowledge they are still being paid some money even if they’re unable to work. This peace of mind can aid in recovery by reducing stress and worry over lack of income.

So long as your workers are eligible, they have a statutory right to receive SSP, regardless of the size of your business. Up until 2014 businesses could claim back the cost of SSP from the state.

There's new rules following COVID-19 relief for small businesses. Stay up to date and see what's changed.

What is the current rate of SSP?

The current weekly rate of SSP is £94.25, which is paid for up to 28 weeks. It is paid in the same way as normal pay with tax and national insurance deducted by the employer.

You may still have to pay SSP even if you stop trading. An employee's entitlement to SSP only ends when their contract of employment ends so you remain liable for SSP payments up to the end of that contract. If you become insolvent you remain liable for SSP up to the date of insolvency. After that date, if an employee's contract of employment has not been terminated, then HMRC will make the payments.

You cannot force your workers to take annual leave in place of SSP.

Employers can no longer claim back SSP

Before 2014, employers could claim back SSP from the government under certain circumstances. At the same time, the government introduced the Employer Allowance which allows you to reduce your Class 1 National Insurance contributions by up to £2,000 a year.

While not strictly speaking a payment for SSP, it can help to offset the cost in small businesses should a staff member go sick.

Who qualifies for SSP?

Since, April 6, 2019, workers need to earn at least £118 a week before qualifying for SSP. Here's what else they need to qualify:

• An up-to-date and completed contract of employment;
• Proof of completing work under that contract;
• Off work with ill-health for four or more consecutive days, including non-working days (the first three days are considered waiting days and are not eligible for SSP). If a worker comes in and does work, even if only for a minute or two before going home sick, it doesn't count as a qualifying day;
• Earn an average of at least £118 a week;
• Notify management of their sickness in-line with your company policy. If there is no defined policy on sickness notification, then they must notify you within seven days. You do not have to pay SSP for any days they were late in telling you unless there is a good reason for why they were late. You cannot insist they tell you in person or use a special form; and
• Provide evidence of sickness only after seven days off. For the first seven days, self-certification suffices. After this point, you can ask for proof either in the form of a FIT/sick note from their doctor or a report from a physiotherapist, podiatrist or occupational therapist, for example. Even if the employee is late in supplying proof, it's illegal to withhold SSP. 

Pay SSP from the fourth qualifying day of absence

An employee works five days for you Monday to Friday. They phone in sick from Monday and are off work until the following Tuesday.

You start paying SSP from the Thursday – the fourth qualifying day – until Tuesday, so Thursday, Friday and Monday, when they return to work.

What is occupational sick pay?

As an employer, you can choose to offer more than SSP to your staff as part of their benefits package. This is normally an amount based on their normal pay. For example, you might offer full pay for the first eight weeks of sick leave and then half pay or statutory pay only for the remaining 20 weeks. It is entirely up to you.

The qualifying criteria is up to you to decide and will vary from business to business, but you might have a minimum period of service in place. You may also choose different schemes to suit each type of worker e.g. management/manual workers etc.

We suggest laying out the policy for your occupational health pay scheme in a worker’s employment contract and/or staff handbook. Explain the scheme, any qualifying period of service required, how sickness is recorded and how long the scheme operates for. It's also wise to explain what happens when occupational sick pay runs out and any exclusions, such as professional sports injuries or working for private gain for another company.

Use software to manage sickness

So, we've covered SSP basics in terms of employer and employee's rights. There's just one more thing. 

Employee sickness is an inevitable hurdle for any person, family and/or business. 

That's why it's good to have a process in place to track and automate employee sickness details at the touch of a button.