An employee calls in sick on a Monday morning. It happens to every business sooner or later. What many small business owners don't realise is that from the very moment that call comes in, a statutory clock starts ticking — one with real financial and legal consequences if you get it wrong. Statutory Sick Pay (SSP) is a legal obligation, not an optional benefit, and HMRC takes non-compliance seriously. Whether you run a two-person plumbing firm in Leeds or manage payroll for a 30-strong retail team in Bristol, understanding SSP is non-negotiable. This guide cuts through the confusion and tells you exactly what you need to pay, when, and to whom.
What Is Statutory Sick Pay and Who Qualifies?
SSP is the minimum amount UK employers must pay eligible employees who are off sick. It is paid by you, the employer — not by HMRC directly — and it replaces the employee's normal wages during a period of illness, up to a legally defined cap.
To qualify for SSP, an employee must meet all of the following criteria:
- They are classed as an employee (workers and self-employed contractors do not qualify)
- They have been ill, or are deemed incapable of work, for at least four consecutive calendar days — including non-working days
- They earn at least the Lower Earnings Limit (LEL), which is currently £123 per week (2024/25 tax year)
- They have told you they are sick within your stated notification deadline (or within seven days if you have no policy)
Zero-hours contract workers can also qualify if they meet the earnings threshold. Agency workers are generally covered by their agency rather than the end client. It is worth reviewing every contract type in your business — misclassifying a worker as self-employed when they are, in practice, an employee can expose you to significant back-pay liability.
The Current SSP Rate and the Waiting Day Rule
For the 2024/25 tax year, SSP is set at £116.75 per week. This rate is reviewed annually by the government, so it is worth bookmarking the HMRC SSP page and checking it each April.
One of the most misunderstood aspects of SSP is the waiting day rule. SSP does not begin on the first day of sickness. The first three qualifying days of any period of sickness are known as waiting days (sometimes called "waiting period" days), and you are not required to pay SSP for them. Payment begins from the fourth qualifying day onwards.
A qualifying day is simply a day on which the employee would normally be contracted to work. If your employee works Monday to Friday, those are their qualifying days. If they fall ill on a Thursday and are still sick the following Wednesday, the waiting days are Thursday, Friday, and Monday — meaning SSP kicks in from Tuesday.
SSP can be paid for a maximum of 28 weeks for a single period of sickness, or for a series of linked periods. Two periods of sickness are linked if they are separated by eight weeks or fewer — meaning a pattern of short absences can quickly add up.
Calculating and Paying SSP in Practice
SSP is a weekly rate, but most employees are not paid weekly. To work out the daily rate, divide the weekly rate by the number of qualifying days in that week. For a standard Monday-to-Friday employee, that is £116.75 ÷ 5 = £23.35 per qualifying day.
Here is a worked example. Emma works Monday to Friday as a receptionist at a small dental practice in Birmingham. She calls in sick on a Wednesday and returns to work the following Wednesday. Her sickness spans eight calendar days. The waiting days are Wednesday, Thursday, and Friday of the first week. SSP is payable from the Monday of the second week — that is three qualifying days (Monday, Tuesday, and Wednesday) at £23.35 each, totalling £70.05.
SSP is subject to income tax and National Insurance in exactly the same way as normal wages. It should run through your payroll and be reported to HMRC via a Full Payment Submission (FPS) in the usual way. If you use a payroll platform like BizHub365, SSP can be factored directly into your payroll run, keeping your FPS submissions accurate without manual calculations.
One important note: you can no longer reclaim SSP from HMRC for most employers. The Small Employers' Relief scheme for SSP was abolished in 2014. The only exception was the temporary Covid-19 SSP Rebate Scheme, which has now closed. Standard SSP is entirely your cost.
What to Do When SSP Does Not Apply
Not every sick employee will qualify for SSP, and it is just as important to handle ineligible cases correctly. If an employee does not qualify, you must give them a completed SSP1 form within seven days of their first sick day (or sooner if the sickness period has ended). The SSP1 allows them to claim Employment and Support Allowance (ESA) from the Department for Work and Pensions (DWP) instead.
Common reasons an employee may not qualify include:
- Earning below the Lower Earnings Limit of £123 per week
- Being off sick for fewer than four consecutive days
- Having already received 28 weeks of SSP
- Being in their first day of a new employment contract with no qualifying earnings yet
Many small employers choose to top up SSP with a Company Sick Pay (CSP) scheme — paying full or partial salary for a defined period before dropping to SSP. If you operate a CSP scheme, the terms must be set out clearly in the employee's contract or staff handbook. Whatever your policy, apply it consistently to avoid discrimination claims.
Record-Keeping and HMRC Compliance
HMRC can ask to inspect your SSP records at any time, and you are legally required to keep them for a minimum of three years. Good records protect you in disputes and demonstrate compliance during any HMRC enquiry.
At a minimum, your records should include:
- The dates of each employee's sickness absence
- The SSP paid and the dates it was paid
- Any SSP1 forms issued to ineligible employees
- Evidence of the employee's notification (e-mail, phone log, self-certification form)
- Medical certificates (fit notes) for absences lasting more than seven calendar days
Self-certification covers the first seven days of absence — you cannot request a fit note from a GP before that point. Asking for one earlier is not only unnecessary; it can damage employee relations and, in some circumstances, amount to an unlawful deduction from wages if you withhold SSP on that basis.
Platforms like BizHub365 store payroll records securely in the cloud and make it straightforward to pull historical payment data if HMRC ever comes knocking, saving considerable time compared to hunting through spreadsheets or paper files.
Conclusion: Get SSP Right From Day One
SSP is one of those obligations that feels straightforward until you are in the middle of it — calculating waiting days, checking the earnings threshold, issuing SSP1 forms, and keeping everything documented correctly. The good news is that with clear policies, a reliable payroll process, and accurate record-keeping, it becomes routine rather than stressful.
Review your employment contracts and staff handbook now, before the next sickness absence arrives. Make sure your payroll system handles SSP calculations automatically and files the correct information with HMRC via RTI. And if an employee does not qualify, issue that SSP1 form promptly — it protects both of you. A little preparation today means far fewer headaches when someone inevitably calls in sick next Monday morning.