How To Calculate Statutory Sick Pay (SSP) for Your UK Business

If you’re running a business in the UK and thinking about growing your team (or maybe you’ve just hired your first employee), understanding how to calculate statutory sick pay (SSP) is essential. Employers have strict legal obligations when it comes to sick pay, and getting it wrong doesn’t just create admin headaches - it can also lead to claims and potentially expensive disputes.

The good news? Calculating SSP isn’t as daunting as it sounds, especially if you know the rules and follow a step-by-step process. In this guide, we’ll break down exactly what counts as “statutory sick pay,” how to calculate it for your employees (including those on zero hours contracts), and what records you need to keep. We’ll also look at some common scenarios, things to watch out for, and point you to the key legal requirements you can’t afford to overlook.

Let’s demystify SSP so your business stays compliant - and your workplace stays protected and fair.

What Is Statutory Sick Pay (SSP)?

Statutory Sick Pay is the minimum amount employers must pay eligible employees who are off work due to illness. It’s a legal requirement under UK law, specifically covered by the Social Security Contributions and Benefits Act 1992. All qualifying employees are entitled to SSP - regardless of whether you offer a more generous sick pay scheme as part of your employment contracts.

For the 2024/25 tax year, the standard SSP rate is £116.75 per week (as of 6 April 2024). It’s paid for up to 28 weeks in any one period of incapacity for work, provided your employee meets certain conditions (more on that below).

It doesn’t matter if your employee is full-time or part-time, permanent or temporary, or even on a zero hours contract - if they meet the eligibility rules, SSP is their legal right. As an employer, you must get the calculation right and pay on time.

Who Is Entitled to SSP?

Before you start working out how much sick pay to give, check whether your employee actually qualifies for statutory sick pay. The main eligibility requirements are:

• Employee status: They must be an employee (not a self-employed contractor).
• Earnings: They must earn at least the Lower Earnings Limit (currently £123 per week on average).
• Period of sickness: They must be off sick for at least 4 consecutive calendar days (including non-working days). The first 3 days are “waiting days” and are unpaid unless your own scheme says otherwise.
• Notification: They must properly notify you in line with your sick pay policy or employment contract (usually within 7 days, but check your own rules).

It’s wise to make sure your employee handbooks clearly outline sickness reporting procedures, so there’s no confusion about what’s expected on both sides.

How Is SSP Calculated?

The big question for most employers is: “How do I calculate SSP for each staff member?” Here’s a step-by-step guide to help you work out statutory sick pay quickly and accurately.

Step 1: Check Average Weekly Earnings

The employee must have average weekly earnings above the Lower Earnings Limit (£123 per week, correct as of April 2024). To work this out:

• Look at the eight weeks prior to the sickness period (or their last pay prior to being ill, if they haven’t worked for eight full weeks).
• Add up all their gross earnings (including any overtime, bonuses, commissions, etc.).
• Divide by eight to get the “average weekly earnings.”

If you’re dealing with someone on a zero hours contract, use whatever pay was earned in each week worked over that period. If they didn’t work in some weeks, those weeks still count as zero earnings when averaging.

This average is crucial - if an employee doesn’t meet the threshold, they won’t qualify for SSP (but double check your own contract or policies, as you might offer a discretionary or enhanced sick pay scheme).

Step 2: Identify Qualifying Days

SSP is only paid for the employee’s “qualifying days” - these are the days they would normally work as per their regular pattern or rota. Importantly, the first three qualifying days of any sickness spell are “waiting days” and aren’t paid, unless the absence is linked to a previous period of sickness within the last 8 weeks.

If your employee is off sick for 7 working days, and works Mondays to Fridays, only days 4-7 attract SSP - the first three are always unpaid “waiting days”.

Step 3: Apply the Current SSP Rate

For April 2024 onwards, the weekly SSP rate is £116.75. However, if your employee is off for part of the week or has an irregular shift pattern, you’ll need to pro rata this figure based on their usual qualifying days.

The HMRC formula is:

• Weekly SSP rate ÷ Number of qualifying days in the week × Number of qualifying days sick

For example, if someone works 5 days a week and is sick for 3, their SSP is £116.75 ÷ 5 × 3 = £70.05.

Step 4: Pay and Keep Records

Pay SSP on the same day as normal wages, and show it on their payslip. Keep records of:

• Their sickness notification
• Dates and qualifying days
• Payment details (for at least three years)

It’s best practice to document all communications and calculations in case of future claims or inspections.

How To Calculate SSP for Zero Hours and Irregular Working Patterns

Many UK businesses rely on “zero hours” or irregular hours workers. The calculation for SSP entitlement in these cases follows the same legal steps, but the trick is getting the average earnings for SSP right. Here’s what to do:

• Add up total gross earnings in the last 8 weeks (including weeks with no work, as zeroes).
• Divide by 8 to establish “average weekly earnings.”
• If this is above the Lower Earnings Limit, they qualify for SSP, even if work is sporadic.
• List what days are “qualifying days” (these might be agreed in writing or inferred from their usual pattern or rota).

You can create a simple zero hours contract sick pay calculator using this approach, or use official tools from HMRC. Always clarify the “normal working days” for each individual up front, and document them in your agreement or staff records.

For more detail on hiring staff on flexible or variable work contracts, see our full guide to zero hours contracts.

What Counts as ‘Average Earnings’ for SSP?

This is a critical concept for getting SSP calculations right. The term “average earnings for SSP” refers to the employee’s earnings over the last 8 weeks before they became sick, inclusive of:

• Basic pay
• Overtime (guaranteed)
• Bonuses/commission
• Statutory maternity, paternity or adoption pay (if applicable)

Fluctuating earnings can make calculating sick pay tricky - always use actual receipts and divide by 8, regardless of work pattern. For someone new, use their total earnings to date divided by the number of weeks employed.

How Long Does SSP Last?

Statutory Sick Pay is payable for up to 28 weeks per period of sickness (sometimes called a “period of incapacity for work”) as long as the employee remains eligible. After that, or if they’re still unwell, the employee may be able to claim Employment and Support Allowance (ESA) instead.

Does Annual Leave or Bank Holidays Affect SSP?

If an employee falls sick during annual leave, they can move to SSP and reschedule their annual leave for later (they shouldn’t lose paid leave just because they’re ill). Bank holidays also don’t “pause” the sick pay calendar - SSP is based on normal qualifying days and waiting days as per their regular pattern.

Enhanced Sick Pay: Is It Required?

You don’t have to offer more than the legal minimum, but many employers choose to give enhanced or discretionary sick pay as a staff benefit. If you do, clearly set out your policy in the employee handbook and contracts so everyone knows what they’re entitled to and how it’s worked out.

Even if you pay more than SSP, you must provide at least the statutory minimum to those who qualify. For legal peace of mind, consider having professionally reviewed written staff contracts in place - they protect everyone when sickness or disputes arise.

Common Mistakes When Calculating Sick Pay

SSP rules are strict, and HMRC can fine or investigate if they suspect non-compliance. Some frequent errors include:

• Counting non-working days as “qualifying days” (SSP only covers working days as per contract or established pattern)
• Using the wrong “average weekly earnings” calculation window
• Forgetting to account for waiting days
• Not updating SSP rates in line with the new tax year (these usually change every April)
• Incorrectly stating sick pay in contracts or handbooks
• Failing to keep sick leave records or payslips showing SSP amounts

To make sure you stay compliant, regularly review your payroll system and employment policies, and check updates to SSP rates and rules every tax year.

What If My Business Can’t Afford To Pay SSP?

Currently, the “Small Employers’ Relief” or “SSP Rebate Scheme” that existed during COVID-19 has ended. All UK employers are responsible for paying SSP themselves, regardless of size.

If you’re concerned about costs, make sure you’re not overpaying SSP (stick to the rules, no more, no less). Seek advice from a payroll expert or employment law professional if cash flow is an issue.
For further support with legal compliance or possible financial offsets, you may find it helpful to consult our employment allowance guide or business insurance resources.

Are There Any Other Sick Pay or Employment Law Requirements I Should Know?

Statutory Sick Pay is just the baseline. If you’re employing staff, you’ll have additional obligations under UK employment law, such as:

• Providing all employees with a Written Statement of Particulars from day one
• Following rules on holiday pay, parental leave, and statutory sick pay rates and duties
• Ensuring clear reporting procedures for sickness absence in your absence policies
• Handling sensitive employee information in line with the Data Protection Act 2018 and UK GDPR

If you’re ever unsure about your obligations as an employer, proactive advice from an expert is the best way to avoid claims or costly mistakes.

Key Takeaways

• Statutory Sick Pay (SSP) is a legal minimum you must pay eligible employees who are off sick, up to 28 weeks.
• To calculate SSP correctly, start by working out average weekly earnings over the last 8 weeks before illness and check this meets the Lower Earnings Limit.
• SSP is paid only for “qualifying days” the employee normally works, and subject to the current HMRC rate (£116.75 per week for 2024/25).
• Zero hours and irregular workers are covered by the same average earnings test - be diligent about working out their earnings and usual working days.
• Keep accurate records of all sick pay calculations, notifications and payments for at least three years.
• Set out your sick pay rules and notification procedures clearly in your contracts and employee handbook to prevent confusion and disputes.
• If you’re unsure about SSP, payroll, or wider employment obligations, seek legal advice to stay fully compliant and protected.

If you’d like more help navigating statutory sick pay, employment contracts, or any aspect of running your business, our friendly legal team is here for a free, no-obligations chat. Contact us at 08081347754 or team@sprintlaw.co.uk today.