Statutory Sick Pay (SSP) is a legal requirement for all employers, providing eligibility requirements are met by the relevant employee. There may be times when you need to calculate SSP manually, and here we explain how to work out sick pay and what needs to be considered and factored into the process.
Who is eligible to claim SSP?
There are a few eligibility conditions that must be met before SSP can be processed. Employees do not need to ‘claim’ SSP, as it should be paid by default by an employer, providing they meet the criteria and follow company procedure, which usually involves submitting a sick note from a doctor.
If Class 1 National Insurance contributions are paid to your employees, the below criteria are relevant to your business.
For employees to claim SSP they must:
- Have been off work for due to illness for a minimum of 4 consecutive days (this includes non-working days)
- Earn at least an average of £123 before tax is applied (2022-23)
- Inform their employer within 7 days of any deadline that has been set
This also applies to casual, agency and zero-hour workers, who can claim SSP if these conditions are met. Agricultural workers have a different scheme which you can find out more about here.
SSP is usually not paid for the first 3 days of absence, which is known as a ‘‘Period of Incapacity for Work’ (PIW)’. However, this will not apply if they have already received SSP in the previous 8 weeks which included a 3-day waiting period.
How much is statutory sick pay?
Employees who are away from work due to illness can claim SSP for a maximum of 28 weeks. While they are receiving SSP they will receive a minimum of £99.35 a week.
However, depending on your company’s sick pay scheme or ‘occupational scheme’ employees can be given more, which should be stipulated in the employment contract.
How is SSP calculated?
To understand how to calculate SSP you can use the following formula:
Weekly rate of Statutory Sick Pay ÷ number of qualifying days in a week x (working days worker is ill -3)
As an example, imagine that an employee earns more than £123 a week, and is contracted to work from Monday to Friday.
They fall ill and call in sick on Monday 4th through to Tuesday 12th July, which equals a total of 6 qualifying days (as SSP is not payable for the first 3 qualifying days). This equates to 3 days of SSP that can be paid to the employee.
Once you have the number of eligible days that can be paid you can calculate the SSP using the following formula (using the example above):
£99.35 ÷ 6 qualifying days = £16.56 of SSP per day
£16.56 x 3 days = £49.68 in SSP
Remember, this is a manual calculation and will not be necessary if you are using a good payroll software system, as it will automatically calculate the figure once you have inputted the relevant employee sick leave information.
Ideally, the software should also be able to automatically incorporate any updates that have been made to SSP legislation, including any rate changes for the new tax year.
How is SSP calculated for part-time workers?
If you want to learn how to calculate SSP for part-time workers, you simply need to follow the same process as full-time employees. SSP remains the same for all eligible employees, which means there is no pro-rata or rounding down of the amount that should be paid.
Simply follow the process outlined above based on the employees’ qualifying days and contracted work days and you can calculate the SSP that needs to be paid.
Can employees use annual leave during sick leave?
Statutory holiday pay can still be accrued while they are off sick from work. Annual leave can also be used while an employee is on sick leave (regardless of how long they are off work). If employees are eligible for SSP, they cannot be asked to take holiday pay.
It is also a good idea to keep records of SSP made to employees, as this can be matched with attendance records if there are any queries or disputes raised at a later date.