Statutory sick pay
Statutory Sick Pay (SSP) is a payment given by employers to employees who are off work sick. If you employ a personal assistant you might need to think about SSP.
This page tells you the basics and how to deal with SSP for tax and NIC purposes in your payroll.
SSP – the basics
Calculating and recording SSP
If an employee is sick for four or more consecutive days (including non-work days, such as weekends and non-work days) – they may be entitled to SSP for a maximum of 28 weeks.
The weekly rate of statutory sick pay (SSP) from 6 April 2016 is £88.45. SSP is payable in respect of days your employee would usually be expected to work – these are called ‘qualifying days’. SSP is normally not payable for the first three qualifying days of sickness.
There are certain qualifying conditions which have to be met, for example, SSP is not payable at the same time as Statutory Maternity Pay or where an employee’s average weekly earnings are less than £112 in 2016/17. If your employee is not entitled to SSP, then you must give them form SSP1 explaining why not.
What you need to think about for SSP as an employer can be summarised as:
- Determine if your employee meets the qualifying conditions
- Calculate how much SSP they are due
- Pay the SSP to them
- Keep a record of the SSP you pay
SSP is the legal minimum. If you have an alternative agreement with your employee (e.g. to continue to pay them as normal when they are sick), you will not have to pay SSP over and above what you are already paying, provided what you are paying is above the SSP rate.
You will want to satisfy yourself that the illness is genuine before paying SSP. Your employee would usually 'self-certify' for the first week of illness and obtain a doctor’s note for longer periods of absence. Please note you cannot insist on a doctor’s note for the first 7 days. If you are not satisfied your employee’s sickness is genuine then you have to give a written reason for refusing to pay SSP to the employee.
If you are running your payroll electronically, most of the hard work of calculating the SSP will be done by your payroll software, but you will still have to enter details on dates of absence and so on.
If you are doing things manually, there is a calculator on GOV.UK website to help you calculate the amount of SSP due.
If you do have to make SSP payments you need to keep records of this – including all dates that the employee’s sickness lasts plus copies of any medical evidence provided. You can use HMRC’s statutory sick pay record sheet to do this. These records must be kept for 3 years after the end of the tax year to which they relate.
If they are entitled to it, the payment will be due at the same time as your employee’s normal wages (e.g. weekly/monthly) and SSP payments will be treated as earnings for PAYE tax and NIC purposes.
You used to be able to recover some of the SSP you paid to your employees. This depended on the amount of the Class 1 National Insurance contributions paid to HMRC via your payroll. However, from 6 April 2014 the recovery of SSP was abolished. You cannot therefore recover any SSP for any tax years from 2014/15 onwards.
The money saved from the abolition has been used to fund a new health and work assessment advisory service that helps employers reduce sickness absence. The 'Fit for Work' service is explained in detail at the Fit for Work website (covering England and Wales) and Fit for Work Scotland website.
There is a related tax exemption for employer expenditure on recommended medical treatment. This will exempt up to £500 of an employer's contribution to any medical treatments or health related interventions recommended by the Fit for Work service (or other employer-arranged occupational health service). There is also a corresponding National Insurance contributions disregard.
However, these measures are unlikely to help care and support employers for whom the cost of sick leave could now represent a bigger burden. This is clearly something that is of interest and concern to LITRG and we will continue to monitor the situation.
You can find out more guidance for employers on the Fit for Work service and related tax exemption on GOV.UK.
There is lots of useful information in the GOV.UK statutory sick pay guide.
Penalties may apply if the employer fails to make correct payments.
For a full collection of detailed guidance for employees and employers on Statutory Sick Pay, Statutory Maternity Pay, Statutory Paternity Pay and Statutory Adoption Pay, please see GOV.UK.