Statutory Sick Pay (SSP) is paid to employees who are unable to work because of illness. As an employer you're responsible for paying SSP to employees who meet certain 'qualifying conditions'.
You may be entitled to recover some or all of the SSP you pay. How much you'll recover depends on your Class 1 National Insurance contributions (NICs) payments.
You can use HM Revenue & Customs' (HMRC's) free online SSP calculators to calculate how much SSP to pay and to see if you can recover any of it. SSP can also be calculated using commercial payroll software (see your software provider for more details) or manually. However if your payroll software doesn't do this for you HMRC recommends using their calculators to both save time and help reduce the possibility of errors. An introduction to SSP can be found at 'Statutory Sick Pay: an overview' (see link below).
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The weekly rate for 2013-14 is £86.70. The daily rate of SSP is the weekly rate divided by the number of agreed qualifying days (days when your employee normally works) in the week - to four decimal places.
This means that if your employee normally works five days in a week there are five qualifying days and the daily rate is £17.34 (£86.70 divided by five). If your employee normally works three days in a week there are three qualifying days and the daily rate is £28.9000 (£86.70 divided by three - to four decimal places). This would be rounded up to £28.90.
You'll find a daily rate table for SSP in HMRC's publication E14, 'Employer Helpbook for Statutory Sick Pay' (see link below).
If the number of qualifying days to be paid in a week is equal to the number of qualifying days in a full week, the amount of SSP payable is simply the weekly rate.
If the number of qualifying days to be paid is less than a full week's worth, work out the daily rate and then multiply it by the number of qualifying days for which SSP is payable.
Before you can work out how much SSP to pay you'll need:
If you and your employee haven't yet agreed on their normal working days, take whichever days they're contracted to work for you. If they don't have a contract, take the days on which they normally work.
You'll need the above information whatever method you use to work out SSP.
If you have a high proportion of your workforce off sick at the same time you may be able to recover some or all of the SSP you pay.
To work out if you can recover any SSP, you'll need details of:
You cannot automatically recover SSP. You can only recover any SSP you've paid in a tax month that's over and above 13 per cent of your gross Class 1 NICs liability for that month. This is known as the 'Percentage Threshold Scheme' (PTS). Unless you qualify under the PTS, you are not entitled to recover any SSP.
If you don't have payroll software which includes SSP calculations, there are other options you can use to calculate SSP. The sections below explain each of these ways.
It's easier and quicker to use a calculator than do it manually because the calculators will also work out if you are entitled to recover any SSP you pay.
There are simple interactive calculators available to use immediately from the link at the end of this section. The SSP calculator works out how much SSP you'll have to pay and the SSP recovery calculator works out how much you can recover. They are easy to use and do everything for you.
The calculators will work out:
You can print the figures worked out by the online SSP calculators so they're ready to enter in whatever payroll system you are using. You can also view your answers and save them to come back to at a later date.
There are some situations this calculator doesn't support:
The online SSP calculator gives you weekly breakdowns of the SSP payable taking into account any 'waiting days' used (you can only start paying SSP after three waiting days have passed).
You can also use the SSP calculator within HMRC's Basic PAYE Tools.
You will need to read E14 'Employer Helpbook for Statutory Sick Pay prior' to using either calculator if your employee is any of the following:
To work out how much SSP to pay manually, you'll need to:
You can read more about what makes up a PIW - and how many waiting days there are in a PIW before SSP is payable - by following the link below.
To calculate SSP recovery manually you'll need to:
This method is called the 'Percentage Threshold Scheme' (PTS).
If the total SSP you paid in a tax month comes to more than 13 per cent of your gross Class 1 NICs liability for the month, you can recover the excess.
To do this, enter the amount of the recovery on your Employer Payment Summary (EPS) - if you do not, then HMRC will not take your deduction into account and expect you to pay the full amount shown on your Full Payment Submission (FPS). If the amount you can recover is more than your monthly or quarterly payment due, carry the balance over to when your next payment is due. Again, you will need to enter the amount of the recovery on the EPS for that tax month.
Where you will have insufficient deductions to recover the payments from, or there are no further payments due in the tax year, help may be available - see 'Advance funding for SSP' below.
If you want to recover SSP you paid in a previous tax year, you'll need to fill in form SP32. You can download it using the link below.
You can read more about recovering SSP from previous tax years in HMRC's publication E14, 'Employer Helpbook for Statutory Sick Pay'.
If you discover that you underpaid or overpaid SSP during the current tax year, you must put the error right and correct your records. You can recover any overpaid SSP from your employee and should treat any overpayment or underpayment as you would an underpayment or overpayment of wages or salary - in other words record the correction as wages or salary not SSP.
You'll also need to see if the error affects any other SSP payments you made later.
If you don't discover the error until after the end of the tax year, contact HMRC (see 'Help and advice' later in this guide) for advice.
If you don't have sufficient payroll deductions available to cover the SSP you're entitled to recover under PTS, you may be able to apply for funding from HMRC. Follow the link below for more information.
If you provide benefits to your employees under a salary sacrifice scheme, this may have an impact on SSP. Follow the link below for further guidance.
Follow the links below to find out more about SSP.
You can ask a question through HMRC's email query service.
Alternatively you can get advice from HMRC's Employer Helpline.