John Davison explains where to find a calculator to work out the Statutory Sick Pay (SSP) and a number of exceptions to the normal rules. This is important as modern business often rely on contract workers and employees with more than one job.

Issue

Employees are usually eligible for SSP of £92.05 a week for up to 28 weeks. More pay can be given under a contractual or occupational sick pay scheme. The amount is paid for days that the employee is sick for days that the employee normally works. It is paid in the same way as normal pay, tax and National Insurance is deducted as normal. It is necessary to be able to calculate what the eligibility is for SSP and also to understand the exceptions to the normal rules.

Calculation

If a person is eligible for SSP it is necessary to calculate the payments to be made. Croner-i provides a calculator to work out the employee’s SSP.

Exceptions

There are several exceptions to the rules, or guidance to how SSP is applied in different circumstances. Given the changing nature of UK business it is important to ensure that the business calculates the entitlements correctly. The major exceptions are the following.

Casual, zero-hour contract and agency workers

These workers are treated as employees for PAYE and National Insurance contributions (NICs). The period for which SSP is due is different depending upon whether the employee has had three months’ continuous employment or not (irrespective of periods of sickness, annual leave or periods where no work was offered). If the employee has had at least three months’ continuous employment, SSP continues for the whole period of the period of incapacity for work (PIW) unless the employee has been given written notice that the contract has come to an end or SSP entitlement stops for some other reason. If the employee has not had three months’ continuous employment the SSP entitlement will continue to the end of any assignment he or she had agreed to work.

Directors

There are several circumstances that apply to director.

  • For companies incorporated after 1 October 2009 new articles of association are provided that apply by default, unless other articles are adopted. These allow its directors to determine the director’s remuneration. Directors decide what remuneration to pay and when. These are regarded as earnings for determining SSP.

  • For companies incorporated before 1 October 2009 the previous standard articles apply by default and continue to apply. As such, an ordinary resolution is required to determine the director’s remuneration. The resolution will be used to determine the average weekly earnings (AWE), and any payments made in anticipation of the annual resolution is not considered when determining the AWE.

  • Where a director is contractually paid a regular salary, the AWE is calculated like any other employee.

  • Should a director’s pay be calculated by a determination of the directors, but not a formal vote, then the AWE is calculated by adding together the monies paid and any other payments of earnings.

  • Where a director is paid contractually and by formal vote, the AWE is calculated like any other employee but the monies voted by formal vote are only included if the date of the vote falls within the relevant period.

  • A director paid by formal vote only, will calculate the AWE in the usual way but the dates of the formal votes will be used instead of pay dates.

  • Any monies drawn in anticipation of a formal vote are not included when calculating the AWE.

Employee with two contracts

An employee can have two contracts (whether with the same employer or with different employers). Where a person had more than one contract with the same employer (or different employers’ trading in association) his or her earnings are aggregated. He or she must be incapable of work under all contracts before being entitled to SSP.

Employee with more than one job with the same employer

Where all earnings for the jobs are to be added together for NICs, they are aggregated to calculate AWE. The employee must be incapable of work under all jobs to be entitled to SSP. If the NICs are worked out separately on earnings from each job, the AWE is calculated separately and the employee can get more than one amount of SSP.

Employees working outside the UK on the first day of Period of Incapacity for Work

The employee may be entitled to SSP if there is a liability to Class 1 NICs. SSP entitlement stops when the liability to Class 1 NICs ceases.

There are also further exceptions such as:

  • agricultural workers

  • educational term-time workers

  • mariners.

These have different rules which must be followed when calculating SSP.

For further details, see our in-depth topic on Pay and Benefits.

Last reviewed 13 August 2018