An employee rings in on Monday morning — they're ill and won't be in for the rest of the week. Your first instinct might be concern for them, but your second, quite rightly, is a practical question: what are you legally required to pay? Statutory Sick Pay (SSP) is one of those employment obligations that many small business owners know exists but never fully get to grips with until they have to. Get it wrong and you risk underpaying employees, falling foul of HMRC, or — just as costly — overpaying when you didn't need to. This guide covers everything you need to know: the current rates, who qualifies, when payments begin, and how to keep your records watertight.
What Is SSP and Who Qualifies?
Statutory Sick Pay is the minimum amount UK law requires you to pay an employee who is too ill to work. It is currently set at £116.75 per week for the 2024/25 tax year, paid in the same way as normal wages — through your payroll, subject to tax and National Insurance.
Not every worker is automatically entitled to it, however. To qualify, an employee must meet all of the following conditions:
- They are classed as an employee (not a worker or self-employed contractor) with a contract of employment.
- They have been ill — or are deemed incapable of work — for at least four consecutive days, including non-working days.
- They earn at least the Lower Earnings Limit (LEL), which is £123 per week (gross) in 2024/25.
- They have notified you of their absence within your own company's notification deadline — or, if you have no policy, within seven days.
Sole traders with no employees obviously have no SSP obligation. But if you employ even one member of staff, these rules apply to you. Zero-hours workers can also qualify for SSP, provided their earnings meet the LEL threshold when averaged over eight weeks.
The Waiting Days Rule: When Does SSP Actually Start?
This is the detail that trips up many small employers. SSP does not begin on day one of illness. The first three consecutive days of sickness are called waiting days (sometimes referred to as qualifying days), and you are not required to pay SSP for them.
SSP kicks in from the fourth qualifying day onwards. Qualifying days are the days your employee is contracted to work — so a Monday-to-Friday employee's qualifying days are Monday through Friday.
Here is a simple example. Suppose your employee, Sarah, is contracted to work Monday to Friday and calls in sick on a Wednesday. She returns to work the following Wednesday. Her waiting days are Wednesday, Thursday, and Friday. SSP therefore becomes payable from the following Monday — her fourth qualifying day — and runs through Tuesday (her last day of absence). That is two days' worth of SSP in this particular instance.
One important exception: if an employee has a linked period of incapacity for work — meaning they were ill within the last eight weeks and that previous absence lasted at least four days — the waiting days do not apply again. This prevents workers who have recurring or chronic conditions from perpetually being denied pay during the first three days of each new episode.
How Long Can SSP Last and What Happens After?
SSP can be paid for a maximum of 28 weeks within a single period of incapacity. Once that limit is reached, your obligation to pay SSP ends. At that point, you must issue the employee with an SSP1 form within seven days of SSP ending. This form allows them to claim Employment and Support Allowance (ESA) from the Department for Work and Pensions (DWP).
SSP also stops if the employee returns to work, their contract ends, or they start receiving Statutory Maternity Pay. If an employee exhausts their 28-week entitlement and later becomes ill again, a new entitlement period can begin — but only after a gap of at least 56 days from the end of the previous period of incapacity.
Some employers choose to offer Company Sick Pay (CSP) that is more generous than SSP — for example, full pay for the first four weeks of illness. CSP is entirely at your discretion and must be set out clearly in the employment contract. If you offer CSP, you can count it towards your SSP obligation, provided the amount paid is at least equal to SSP.
Can Employers Reclaim SSP from HMRC?
The short answer, for most businesses today, is no. The old Percentage Threshold Scheme that allowed employers to reclaim SSP from HMRC was abolished in 2014. Since then, SSP has been an employer-funded obligation.
There is, however, one limited exception worth knowing. The Statutory Sick Pay Rebate Scheme was temporarily reintroduced during the COVID-19 pandemic to help small employers reclaim SSP costs for pandemic-related absences, but that scheme closed in September 2021 and is no longer available.
The practical implication is straightforward: SSP is a cost you need to budget for. For a small business with tight margins, a long-term absence can be financially significant. If an employee is absent for the full 28 weeks at £116.75 per week, the total SSP bill comes to just over £3,269. Factor this into your financial planning and, if appropriate, consider whether income protection insurance or a group sick pay policy makes commercial sense for your business.
Record-Keeping and Compliance: What HMRC Expects
HMRC does not require employers to submit SSP records routinely, but it can request them during a compliance check — and the burden of proof is on you. Poor records are one of the most common reasons small employers face penalties.
At a minimum, you should keep:
- Dates of absence for each employee, including waiting days.
- Fit notes (formerly called sick notes) from a GP or other authorised healthcare professional, required for absences lasting more than seven consecutive days.
- Self-certification records for absences of seven days or fewer — a simple self-certification form signed by the employee is sufficient.
- SSP calculations showing how you arrived at the amount paid.
- SSP1 forms issued where applicable.
Records must be kept for at least three years from the end of the tax year to which they relate. If your payroll process is manual or spread across spreadsheets, this is one area where a dedicated platform pays dividends. BizHub365 includes payroll functionality that helps you track statutory payments — including SSP, SMP, and SPP — alongside your broader PAYE obligations, keeping everything in one auditable place rather than scattered across email threads and spreadsheets.
Practical Tips for Handling SSP Smoothly
Beyond the legal minimum, a few practical habits will save you time and stress:
- Have a written absence policy. Clearly state your notification requirements, self-certification process, and any CSP entitlement. This reduces disputes and sets expectations from day one.
- Track absence patterns. Frequent short-term absences may indicate an underlying issue that warrants a return-to-work conversation or occupational health referral — not just an administrative SSP calculation.
- Don't confuse qualifying days with calendar days. SSP is calculated on qualifying days only, not all seven days of the week. A week's SSP of £116.75 is divided by the number of qualifying days in that week — so for a five-day-a-week employee, each qualifying day is worth £23.35.
- Review your contracts annually. Employment law changes regularly. Make sure your sick pay provisions reflect current rates and any updates from HMRC or the DWP.
Conclusion
Statutory Sick Pay is not optional, but it is manageable — provided you understand the rules and keep tidy records. Know your qualifying thresholds, respect the waiting days rule, issue SSP1 forms on time, and document every absence properly. For small businesses in particular, building these habits early prevents costly mistakes later.
If you find yourself juggling payroll admin alongside everything else that running a business demands, tools like BizHub365 can take the mechanical work off your plate — calculating statutory payments accurately and integrating them with your wider payroll and bookkeeping. Because the less time you spend untangling SSP calculations, the more time you have to focus on the work that actually grows your business.