Statutory Sick Pay

Statutory Sick Pay (SSP) is paid to employees who are unable to work because of illness. SSP is paid at the same time and in the same way as you would pay wages for the same period.

As an employer you're responsible for paying SSP to employees who meet certain qualifying conditions.

You'll need to:

• determine whether an employee meets the qualifying conditions
• calculate how much SSP they're due
• pay the SSP to them
• keep a record of the SSP you pay

If you keep paying your employees their normal wage when they're sick - and you pay them at least as much as the SSP they'd get - you don't have to operate the SSP scheme.

You must put your sickness policy in a written statement of employment particulars and give a copy to all employees who have worked for you for at least a month.

ENTITLEMENTS

STATUTORY SICK PAY TERMS (SSP)

PERIOD OF INCAPACITY FOR WORK

SSP is only payable if there's a period of incapacity for work (PIW). This is a period of four or more days in a row when the employee can't work because they're sick or incapacitated.

The days that make up a PIW don't need to be working days. If an employee normally works from Monday to Friday and they're sick on Friday, Saturday, Sunday and Monday - then that's a PIW. Similarly if they only work Tuesdays and Fridays but are sick on both of these days and also sick on Wednesday and Thursday then that's a PIW.

WAITING DAYS

The first three qualifying days (days the employee normally works for you) of a PIW are called 'waiting days' and SSP isn't payable for these waiting days. SSP is payable from the first qualifying day after the three waiting days. However, if several PIWs are linked, the waiting days only apply to the first PIW.

QUALIFYING DAYS

These are the employee’s contractual or normal working days. SSP is paid for each qualifying day after the waiting days. You can however decide not to use the contracted working days if, for example, your workforce operates a varied work pattern each week but for simplicity you may want to have the same days each week as the QDs.

CALCULATING AVERAGE EARNINGS

The calculation of an employee’s average weekly earnings for SSP purposes simply determines if the employee is entitled to SSP and not how much. In order to qualify for SSP an employee must have weekly average earnings of at least the LEL for NI which is currently £102.00 per week.

From 6th April 2011 the weekly rate of SSP is £81.60

RECOVERY OF STATUTORY SICK PAY (SSP)

Employers are entitled to recover part of SSP paid if they qualify for the SSP reimbursement scheme known as the Percentage Threshold Scheme (PTS). The amount of SSP that an employer is entitled to recover is the excess SSP paid which is more than 13% of the Class 1 NIC for employees and employers less NIC rebates and excluding Class 1A and 1B for the same month.

This calculation is done automatically by the payroll software.

ENTERING STATUTORY SICK PAY ON BRIGHT PAY

To access this utility, simply go to Payroll> and select the employee’s name on the left:

1)     Under Statutory Pay, click Calendar

2)     On the Calendar, select the date range the employee is out sick

3)     Click Sick icon at the bottom right hand corner to apply the sick leave

The number of Qualifying Days, Waiting Days & SSP days will be displayed on the screen.

4)     Close the Calendar and the program will automatically apply any SSP due to the employee

OVERRIDING THE ‘AVERAGE WEEKLY EARNINGS’ CALCULATION

If existing payment records have not been recorded in Bright Pay, the automatic calculation performed by the program after completing the above may be inaccurate. In the event of this occurring, the user may override the AWE by doing the following:

1)     On the main Payroll screen, click Edit icon in the employee’s Statutory Payments section

2)     In Sick Pay, select the option ‘Override calculated average weekly earnings’

3)     Enter the average weekly earnings amount for the employee, then click out of this box

4)     The program will calculate SSP based on the AWE manually entered by the user

HMRC SSP Daily Tables for 2011/2012

Further information regarding the operation and calculation of Statutory Sick Pay can be found on the HMRC website or by consulting the HMRC Guide E14 (2011) Employer Helpbook for Statutory Sick Pay.