Statutory Sick Pay Calculations UK: Complete 2026 Employer Guide

Statutory sick pay (SSP) is a legal obligation that every UK employer must understand. When an employee is too ill to work, you are required to pay SSP for up to 28 weeks — and getting the calculation wrong is one of the most common payroll errors HMRC identifies during compliance checks. Underpaying SSP exposes your business to penalties, while overpaying means you are absorbing costs unnecessarily.

This guide walks you through the SSP calculation process step by step, covering eligibility, qualifying days, waiting days, and the interaction with your company sick pay scheme.

SSP rates and thresholds for 2025/26

The current SSP rate and key thresholds for the tax year 2025/26 are:

Who qualifies for SSP

An employee qualifies for SSP if they meet all of the following conditions:

1. They are an employee. SSP applies to employees only, not self-employed contractors or agency workers paid by an agency. If you are unsure about a worker's status, review our employee vs contractor guide.
2. They have done some work under their contract. The employee must have started work under their contract of employment.
3. They earn at or above the Lower Earnings Limit. Their average weekly earnings must be at least £125 per week (2025/26) in the relevant period.
4. They have been sick for at least 4 consecutive days. This includes non-working days. The 4 days form the "period of incapacity for work" (PIW).
5. They have notified you of their absence. According to your notification requirements, or within 7 days if you have no specific rules.

Who does NOT qualify

When an employee does not qualify for SSP, you must issue them an SSP1 form so they can claim Employment and Support Allowance (ESA) from the Department for Work and Pensions.

Step-by-step SSP calculation

Step 1: Confirm the period of incapacity for work (PIW)

A PIW begins on the first day of sickness and must last at least 4 calendar days (including weekends and non-working days). If two PIWs are separated by 8 weeks or fewer, they link together and are treated as one continuous period.

Step 2: Identify qualifying days

Qualifying days are the days on which SSP can be paid. By default, qualifying days are the days the employee is contracted to work. For a standard Monday-to-Friday employee, there are 5 qualifying days per week.

For employees with irregular or part-time patterns, qualifying days follow their contracted working pattern. You can agree different qualifying days with the employee, but there must be at least one qualifying day per week.

Step 3: Apply the 3 waiting days

No SSP is payable for the first 3 qualifying days in a PIW. These are known as "waiting days." If the PIW links with a previous PIW (see the linking rule above), waiting days are not served again.

Step 4: Calculate the daily SSP rate

Divide the weekly SSP rate by the number of qualifying days in the week:

For a 5-day worker: £118.75 ÷ 5 = £23.75 per day For a 3-day worker: £118.75 ÷ 3 = £39.58 per day

Note that part-time workers receive the same weekly amount as full-time workers — the daily rate is higher because it is spread across fewer qualifying days.

Step 5: Calculate total SSP for the absence

Multiply the daily rate by the number of qualifying days in the absence, excluding the 3 waiting days.

Example: A full-time (5-day) employee is sick for 10 working days.

• Qualifying days: 10
• Less waiting days: 3
• Payable qualifying days: 7
• Daily rate: £23.75
• Total SSP: 7 × £23.75 = £166.25

Average weekly earnings calculation

To determine whether an employee earns enough to qualify for SSP, you must calculate their average weekly earnings (AWE) over a specific reference period. The reference period is the 8 weeks (for weekly-paid employees) or 2 months (for monthly-paid employees) ending on the last normal pay day before the first day of the PIW.

Include in the calculation:

• Basic pay
• Overtime pay
• Bonuses and commission paid in the period
• Statutory maternity pay, statutory paternity pay
• SSP from a previous period

Exclude:

• Benefits in kind
• Pension contributions
• Payments made after the calculation period

SSP and payroll processing

SSP is processed through your normal payroll run and is subject to Income Tax and National Insurance deductions in the same way as regular pay. It should be reported through PAYE Real Time Information as part of the employee's gross pay. See our PAYE RTI guide for details on reporting requirements.

Since April 2014, employers can no longer recover SSP from HMRC through the Percentage Threshold Scheme (PTS). SSP is now entirely an employer cost — factored into your total employer National Insurance burden — making accurate calculation and effective absence management even more important.

Evidence of incapacity

For the first 7 calendar days of sickness, the employee can self-certify — they do not need a doctor's note. After 7 calendar days, they must provide a "fit note" (Statement of Fitness for Work) from their GP or other qualified healthcare professional.

A fit note may state that the employee is either "not fit for work" or "may be fit for work" with adjustments such as amended duties, altered hours, or workplace adaptations. If the employee is signed as "may be fit" but you cannot accommodate the suggested adjustments, you should treat them as "not fit" for SSP purposes.

When SSP ends

SSP entitlement ends when any of the following occurs:

• The employee returns to work
• The 28-week maximum is reached
• The employee's contract of employment ends
• The employee is taken into legal custody
• The employee starts receiving Statutory Maternity Pay
• The employee dies

When SSP is about to be exhausted (at least 4 weeks before), send the employee an SSP1 form so they can apply for ESA.

Interaction with company sick pay

If you operate a company sick pay scheme, you need to decide how it interacts with SSP:

Inclusive approach: Company sick pay includes SSP. For example, if your scheme pays full pay for 4 weeks, SSP is included within that full pay — you do not pay both.

Exclusive approach: Company sick pay is paid on top of SSP. This is more generous but more expensive.

Most employers use the inclusive approach. Whichever method you choose, document it clearly in your employment contracts and absence policy.

SSP and salary sacrifice

If an employee participates in a salary sacrifice scheme, their average weekly earnings are calculated on the post-sacrifice salary. This could potentially reduce earnings below the Lower Earnings Limit, disqualifying them from SSP. This is an important consideration when offering salary sacrifice to lower-paid employees.

Frequently asked questions

Next steps

Key takeaways

SSP calculation is straightforward once you understand the building blocks: qualifying days, waiting days, the daily rate, and the linking rule. The most common errors come from ignoring the linking rule, miscalculating average weekly earnings, and failing to issue SSP1 forms when employees do not qualify.

Build SSP into your absence management processes, document your company sick pay interaction clearly, and use your payroll software to automate calculations wherever possible. For broader guidance on managing employee sickness, see our sickness absence management guide.