PAYE72070 - PAYE operation: payments for PAYE purposes: sick pay

The Employment Income (EIM) Manual gives full instructions on Sick Pay.

Advice for Employer sections is contained in subject ‘SICK Pay Scheme’ PAYE20150.

Statutory Sick Pay (SSP) is chargeable to tax as PAYE income. The employer should operate PAYE in the same way as on wages or salaries.

Third party pays sick pay

A third party, such as an insurance company, may pay sick pay.

Where a third party pays sick pay, the Employer section for that scheme will

• Tell you the employer reference for the sick pay scheme
• Ask you to use EBS Function AMEND EMPLOYER TRADE AND SCHEME DETAILS to enter this reference in the Linked Schemes Reference field on your employer record

Do not prepare any taxpayer records. Tax should be deducted at basic rate.