How to Calculate the SSP Rate For Your Employees
Your employees aren’t robots. And sometimes, as all humans do, they fall sick.
If an employee’s illness means they cannot come in to work, the employee might be eligible, by UK law, to receive Statutory Sick Pay (SSP).
But what really is Statutory Sick Pay (SSP)? How much is it? And how do you calculate the SSP rate for your staff?
This guide provides answers to these questions and more.
Let’s dig in.
What is Statutory Sick Pay (SSP)?
Statutory Sick Pay is a specified minimum entitlement UK employers must pay to eligible employees absent from work due to illness or sickness.
This rate changes from tax year to tax year, so it’s crucial to stay updated about it.
Depending on your company’s policies, you can decide to pay more than £99.35 (the minimum amount per week), but never lower.
Be careful not to confuse SSP with Occupational Sick Pay (OSP). While SSP is a basic right for every UK employee, provision for OSP depends entirely on you, the employer. That said, we do recommend that you have an OSP scheme.
Who is eligible for Statutory Sick Pay?
Not every UK employee who falls sick is entitled to SSP, as they must satisfy specific criteria to be eligible.
Here are the conditions that would make an employee eligible for Statutory Sick Pay in the UK:
They must have an employment contract with your company (or, in other words, be recognised as an employee).
They must have started working under the conditions of their employment contract.
They must have been sick for four or more consecutive days (known as a Period of Incapacity for Work), including non-working days like weekends. The first three days of absence due to sickness are known as “waiting days” and don’t count toward SSP. After that, SSP is payable for every working day (known as qualifying days) that an employee misses, due to sickness, after the waiting day.
Their income must not be less than the Lower Earning Limit (LEL), which is £123 per week for 2022/2023.
They must notify you (and, in some cases, show proof) that they’ve been absent from work due to sickness.
To consider an employee’s periods of sickness as “linked,” the sickness periods must either last four or more days or be at most eight weeks apart.
Who is not eligible for Statutory Sick Pay?
An employee isn’t entitled to SSP in the UK if:
They’ve already received SSP for up to 28 weeks.
They’re receiving Statutory Maternity Pay or Allowance.
They’re pregnant and off work for any illness related to their pregnancy within four weeks before the week their baby is due.
They spent the first day of their illness in custody or involved in a strike.
They’re not paying National Insurance contributions because they work outside the EU.
They already received Employment and Support Allowance within their first 12 weeks of working for you.
You’re to give employees who are not eligible for SSP an SSP1 Form. Employees can use this form to support their application for Universal Credit and Employment and Support Allowance.
How to calculate the UK SSP rate for your employees
You can calculate the SSP rate for your employees in two ways: manually or by using payroll software.
Here’s a formula to help you manually calculate SSP for your employees:
Weekly SSP rate ÷ Number of days an employee typically works in a week x (working days worker is ill – 3).
Let’s consider an example.
Let’s assume your employee works every Monday to Friday but was absent from work for two weeks due to illness.
This means the employee was unavailable for ten working days. You’d be left with seven qualifying days when you remove the three waiting days.
So, to calculate the SSP, divide the weekly SSP rate (£99.35) by the number of days the employee typically works a week (5). And then, multiply the result by the number of qualifying days (7).
Here’s what that would look like:
Statutory Sick Pay (SSP) due = (£99.35/5) * 7
= £19.87 * 7
What if the employee misses two weeks but only works Mondays, Wednesdays, and Fridays?
In this case:
The number of days the employee typically works in a week = 3
The working days the worker is ill – 3 = 4
So, the SSP due would look like this:
SSP due = (£99.35/3) * 4
= £33.11 * 4
To help, HMRC offers a sick pay calculator to assist you in knowing exactly how much to pay your sick employees.
Using PayFit to handle SSP
The second and more convenient way to calculate SSP in the UK is by using payroll software.
Payroll software like PayFit automatically tracks and applies changes to SSP rates to your payroll system. You can also use PayFit to calculate your employee's Statutory Sick Pay and Sickness deductions automatically when you indicate that an employee is on sick leave.