How to calculate Statutory Sick Pay (SSP) entitlement

By 17/02/2020 March 4th, 2020 Payroll, Statutory Sick Pay
How to calculate Statutory Sick Pay (SSP) entitlement

Also known by its acronym SSP, Statutory Sick Pay is the legal minimum that employees are entitled to when they are off sick from work. Paid by employers, Statutory Sick Pay kicks in when an employee is off sick for more than four days in a row.

In order for an employee to qualify for SSP, an individual must be classed as an employee at your business, have been ill for four days in a row (including non-working days), earn an average of at least £118 per week and they must inform you as their employer that they’re sick before your deadline (i.e. before 9am on the first day they are absent) or within 7 days if you don’t have one.

The average earnings threshold to be eligible for SSP is calculated over a period of eight weeks before the employee fell ill.

Current legislation states that employees are entitled to a minimum of £94.25 per week as SSP (this rises to £95.85 in April 2020) for a maximum of 28 weeks.

Is your employee eligible for Statutory Sick Pay?

To work out if your employee is eligible for SSP, the 8-week period prior to their first day of absence is used as a reference period to calculate their average pay.

James earns £1,600 before PAYE tax, NI and other deductions per month. He fell ill on Wednesday 8th January 2020

To work out his eligibility for SSP, you need to identify the last payday before the first day of sickness and the payday at least 8 weeks’ before he fell ill. James is paid on the last working day of the month; therefore, the relevant period is 31st October to 31st December 2019.

Simply work out how much James was paid per month during this 8-week period, multiply it by 12 and divide by 52 to get the average weekly amount he is paid.

As James is salaried, his monthly pay before tax is £1,600.

Therefore, £1,600 x 12 months = £19,200 before tax.

£19,200 / 52 weeks = £369.23 average weekly pay (also before tax).

As such, James would be eligible for Statutory Sick Pay as he earns more than the £118 weekly threshold.

How to calculate Statutory Sick Pay

Employees are only eligible for Statutory Sick Pay on the fourth day of their illness. The first three days are known as ‘waiting days’.

Employers are obliged to start paying SSP from the fourth day of illness – also known as the fourth ‘qualifying day’. Qualifying days are the days that an employee is contracted to work according to their contract.

The only exception to this rule is if an employee has been off sick and receiving SSP within the last eight weeks, at which point SSP would be applicable on the first day of their illness.

Say Jane was off sick from Monday 13th January and returns to work on Wednesday 22nd and earns more than £118 per week.  Her contracted working days, the qualifying days, are Monday to Friday.

She was sick for a total of 7 qualifying days. Of course, SSP is not payable for the first 3 qualifying days. Therefore, Jane is eligible to the equivalent of 4 days of Statutory Sick Pay.

To calculate SSP, the weekly rate (£94.25) is divided by the number of qualifying days in a week and multiplied by the number of days for which an employee is entitled to.

In this case, Jane was off sick for 7 qualifying days (of which SSP will be paid for 4 of them0). Therefore, the sum to calculate Jane’s SSP entitlement looks like this:

£94.25 / 7 qualifying days = £13.46 of SSP per day.

£13.46 x 4 days = £53.84 in Statutory Sick Pay.

As an employer, you can choose to offer more than SSP to your employees as part of their benefits package. This is normally an amount based on their normal pay. But you can’t choose NOT to pay Statutory Sick Pay, it is a legal obligation as an employer.

Keeping track of employee illness and their physical and mental health can be challenging, especially when you have hundreds of employees. HR software is ideal for businesses to keep track of illness trends, calculate the Bradford Factor, report on annual sickness periods and save time by allowing your employees to record days of sickness, complete return to work forms online and much more.

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Please note: while we here at Natural HR work with HR professionals every day, we are not lawyers. This post is a high-level overview of Statutory Sick Pay and how to calculate it. This post should not replace sound legal advice available from professional solicitors or employment lawyers.

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About Natural HR

Natural HR is a cloud-based HR software company for growing businesses with 100+ employees. Since launching in 2010, we’ve been building a comprehensive suite of HR functionality that equips the small to medium-sized enterprise with everything needed to build an effective and efficient HR operation.

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