Staff sick pay entitlement – what you need to know
What is sick pay?
There are two types of sick pay:
- Company Sick Pay (also called contractual or occupational sick pay)
- Statutory Sick Pay
Whether you run your own 'company sick pay scheme' or you pay Statutory Sick Pay (SSP), you are legally bound to pay your employees when they are sick.
Make sure all your employees understand what they are entitled to – details of this should be included in an employment handbook or contract.
What is contractual sick pay?
This is a sick pay agreement that’s in the employment contract instead of Statutory Sick Pay.
These contracts usually mean an employee will receive their full salary while off sick, for a certain amount of time, rather than get SSP (see below). However, you don’t have to include it into your employees' contracts and can choose to pay SSP instead.
Employment contracts can state how long an employee will receive contractual sick pay. In some contracts the employer can decide whether an employee will receive contractual sick pay or SSP.
With this in mind, if an employee is eligible for contractual sick pay, you have to pay it. If you don’t your employee can claim breach of contract, and you could go to court.
“As long as an employee has an employment contract with you they’re entitled to SSP”
What is SSP (Statutory Sick Pay) and how much do I need to pay staff?
If you don’t run a company sick pay scheme, then you have to pay staff Statutory Sick Pay (SSP) when they are sick. This amount is £92.05 a week and you are obliged to pay it up to a maximum of 28 weeks.
No matter how much an employee earns (as long as it’s a minimum of an average of £116 a week before tax) you never need to pay more than £92.05 a week in SSP.
You can calculate an employee’s statutory sick leave, by using this handy tool on the government’s website.
SSP is paid for the days an employee usually works (e.g. Tuesday to Saturday) called ‘qualifying days’ you must pay it on the normal payday, deducting tax and NI.
Who doesn’t get sick pay?
As long as an employee has an employment contract with you they’re entitled to SSP, whether they’re an agency or casual worker, work part-time or on a zero hours or fixed-term contract – as long as they earn a minimum of an average £116 a week).
Even if you don’t have a signed document with an employee, they could still technically have a verbal contract with you, which makes them eligible for SSP. Read more here.
An employee doesn’t qualify for SSP if they are self-employed or are getting statutory maternity pay – see a list here.
Can you claim back sick pay?
No, you can’t reclaim SSP from HMRC, but if your business sadly becomes insolvent while an employee is still sick, HMRC will pay SSP to this employee.
Does an employee still get holiday leave while sick?
Holiday leave is still accrued while the employee is sick from work and can be taken during sick leave.
However, you cannot force an employee to use their annual leave while they are entitled to use sick leave.
Find more information on an employer’s guide to sick pay.