Understand Statutory Sick Pay

Earnings-related qualification for SSP

To qualify for Statutory Sick Pay (SSP), an employee must have average weekly earnings at or above the National Insurance contributions Lower Earnings Limit (LEL) for the current tax year.

Identify a set period of time (the relevant period) prior to the start of their Period of Incapacity for Work (PIW). The period must be at least eight weeks long and is marked by two pay dates:

• date 1 - the last normal pay date before the employee's PIW
• date 2 - the last normal pay date at least eight weeks prior to the date above

The relevant period is calculated from the day after date 2 up to and including date 1.

Calculating average earnings for weekly paid employees
If your employee is paid once a week or in multiples of a week, eg fortnightly or four-weekly:

• Add together the gross earnings in the relevant period, including any bonuses and commissions.
• Divide the total by the number of weeks in the period.

Calculating average earnings for monthly paid employees
The payment for monthly paid employees is calculated on the same basis as that of weekly employees:

1. Add together the gross earnings during the period.
2. Divide the total by the number of months in the period. If this is not a whole number of months, round to the nearest whole number.
3. Multiply by 12.
4. Divide by 52.

For details of how to calculate average earnings, download the help book on what to do if your employee is sick from the HM Revenue & Customs website (PDF).

You can also download information on special cases and examples of employee sickness from the HM Revenue & Customs website (PDF).

Action if your employee is not entitled to SSP
If your employee is not entitled to SSP but has been incapable of work for at least four calendar days in a row, you should give them form SSP1 as soon as possible so they can claim incapacity benefit from their local Jobcentre Plus or Social Security Office (SSO). You can download form SSP1 for Statutory Sick Pay from the DWP website (PDF).

Subjects covered in this guide

• Introduction
• What is Statutory Sick Pay and who gets it?
• Earnings-related qualification for SSP
• When to start and stop payments
• How much to pay
• Record keeping and forms
• Getting subsidies or relief
• Alternatives to paying Statutory Sick Pay
• Contractual issues

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