September 28, 2023
Employees who are absent from work due to sickness are offered Statutory Sick Pay (SSP) which is calculated by the employer. This must be calculated accurately in order to avoid complaints to HMRC, however there is various criteria that needs to be considered which we will explain in this article.
What is the Rate of Statutory Sick Pay?
SSP daily rates change every tax year in order to reflect inflation. Currently, since April 2023, the daily rate of statutory sick pay is £21.88 which is £109.70 per week. Employers must adhere to this statutory minimum amount of SSP.
The amount of sick pay employees will receive depends on the number of days they work a week and how many of these they are absent.
What is the Criteria for Statutory Sick Pay?
The following eligibility criteria must be met:
- Employees need to hold an employment contract
- Employees need to earn on average of at least £123 per week
- Employees need to record sickness for 4 days or more, including weekends and bank holidays; the first 3 days will be unpaid and you can self-certify up until 7 days
- After 7 days, employees need to give notice and proof of illness; a ‘sick note’, also known as a ‘fit note’ is required from a doctor or healthcare professional
Regardless of whether employees have been paid less than eight weeks of earnings or only worked a few hours of their contract, they are still eligible for SSP if they meet the criteria above. If an employee takes multiple sick days throughout the year but not consecutively, they are not considered as ‘linked’ and SSP is still required.
If an employee falls ill immediately after clocking in, calculation won’t start until the following day. Employers are responsible for paying SSP if they pay class 1 National Insurance contributions for their employees.
What If Employees Aren’t Eligible for SSP?
If employees are not eligible for SSP, they will receive an SSP1 form which explains why they are not eligible and can be used to claim Universal Credit (UC) or Employment & Support Allowance (ESA).
How Long is Statutory Sick Pay Given For?
Statutory sick pay is usually given until the employee returns to work or their contract ends.
There is a limit of 28 weeks in any one period of sickness; this includes ‘linked’ periods of sickness within 8 weeks of each other. Once this timeframe has passed, SSP will no longer be paid and you may be eligible for other benefits like Employment & Support Allowance (ESA). If there is a gap of 8 weeks between sickness absence, SSP will reset and the 28 week limit will start again.
Statutory sick pay should be paid automatically through the payroll and either weekly or monthly, depending on your usual schedule. It will be subject to National Insurance and Income Tax deductions unless it is being paid to you in a separate amount in a particular pay period.
How to Calculate Statutory Sick Pay
SSP daily rates are calculated by dividing the current weekly rate by total qualifying sick days (inc. weekends and bank holidays). The SSP daily rate is then multiplied by eligible sick days (not inc. the first 3 days) and this results in the total statutory sick pay to pay.
it’s always important for employers to keep up to date with the SSP daily rates, as they are subject to change, so they do not pay an incorrect amount and incur legal action.
Although it can be complicated calculating statutory sick pay manually, Premier Legal are here to help. If you need assistance with these calculations or you are an employee that believes they have been incorrectly paid, get in touch with us today.