Understanding sick pay obligations is essential for UK business owners. While the rules are relatively straightforward, getting them wrong can lead to employee disputes, payroll issues, or compliance problems. This guide covers the key points you need to know.
Statutory Sick Pay (SSP): The Basics
Most employers in the UK are legally required to pay Statutory Sick Pay (SSP) to eligible employees when they’re off work due to illness.
Key SSP facts:
SSP rate: £116.75 per week (as of April 2024)
Paid for: Up to 28 weeks
Starts from: The 4th qualifying day of sickness (the first 3 are “waiting days”)
Paid by: The employer (you can’t usually reclaim it)
SSP must be paid through payroll and is subject to tax and National Insurance.
Who Is Eligible for SSP?
An employee is entitled to SSP if they:
Are classed as an employee (not a contractor or freelancer)
Earn at least £123 per week on average (before tax)
Have been ill for 4 or more consecutive days (including non-working days)
Have properly notified you of their sickness
Employees on zero-hours contracts may still qualify if they meet the earnings threshold.
Evidence of Sickness
Up to 7 calendar days: Employees can self-certify
More than 7 days: You can request a fit note (formerly a sick note) from a GP or other medical professional
Fit notes can confirm whether an employee is “not fit for work” or “may be fit” with adjustments.
Company Sick Pay (Occupational Sick Pay)
Many businesses choose to offer company sick pay on top of SSP, but this is not legally required.
If you do offer enhanced sick pay:
The terms must be clearly set out in contracts or staff handbooks
You must apply the policy consistently to avoid discrimination claims
Company sick pay can include SSP or be paid on top of it
Clear policies help manage expectations and reduce disputes.
When SSP Does Not Apply
You do not have to pay SSP if the employee:
Is self-employed
Earns below the earnings threshold
Has already received 28 weeks of SSP
Is off work due to pregnancy-related illness within 4 weeks of the due date
Is receiving Statutory Maternity Pay instead
In these cases, employees may be able to claim benefits such as Universal Credit or Employment and Support Allowance.
Managing Long-Term Sickness
For extended or recurring absences, best practice includes:
Keeping regular, supportive contact
Considering reasonable adjustments or phased returns
Following a fair absence management process
Dismissal due to ill health is possible, but only after proper medical evidence, consultation, and consideration of alternatives.
Why Getting Sick Pay Right Matters
For small and medium businesses, sick pay isn’t just a legal issue — it’s a people issue. Clear policies help you:
Stay compliant with employment law
Maintain trust with your team
Plan more effectively for absences
If you’re unsure, reviewing your contracts and sick pay policy with an HR professional can save time and risk in the long run. Need help? Contact us for expert sick pay guidance.
