Statutory Sick Pay (SSP)
This guide is designed to assist you when processing periods of sickness for your employees. Please see the section at the bottom of this guide for information on proposed changes to the SSP rules introduced by the Government in response to the Coronavirus / COVID-19 situation.
When one of your employees has time off sick, you may need to pay them Statutory Sick Pay (SSP). Payroll Manager is able to determine whether or not your employee is entitled to SSP and if so automatically calculate how much is due.
Basic rules of SSP
There are a number of rules which determine whether or not an employee is eligible to be paid SSP, and also the amount of SSP that they should receive. Payroll Manager has these rules built-in, and can automatically calculate the amount of SSP to be paid (if any) once a period of sickness has been recorded on the ‘Calendar’ screen. The rules themselves can found in the GOV.UK Statutory Sick Pay (SSP): employer guide.
The normal* rules state that:
- In order to be eligible to claim SSP the employee’s earnings must be at or above the ‘Lower Earnings Limit’, which is £118 (for 2019-20)
- In order for SSP to be payable a ‘Period of Incapacity for Work’ (PIW) must be formed. A PIW is only formed when the employee is sick for 4 or more consecutive days. Sickness periods of 3 days or less do NOT constitute a PIW.
- When a PIW has been formed, the first 3 working days are called ‘waiting days‘, for which NO SSP is due. SSP is then payable from the 4th working day onwards.
- If a new PIW is formed within 8 weeks of the end of a previous PIW then these two PIWS are ruled as being ‘linked’. If the employee qualified for SSP in the first of these PIWs, then SSP is payable for the second PIW and will start from the first working day of this period of sickness (i.e. no waiting days are required).
*NOTE: There may be a temporary change to the SSP system away from these ‘normal’ rules in response to the coronavirus outbreak (e.g. a temporary measure may allow for the payment of SSP from day 1 of sickness). If this is the case then you should refer to any documentation provided by HMRC, and also to the FAQ section at the bottom of this guide.
Recording the period of sickness
1) – From the main menu, click on ‘Employees – Calendar’, then select the appropriate employee.
2) – Click the first day on the calendar that the employee was sick and then click on the ‘Ambulance/Sickness’ symbol from the calendar toolbar.
3) – Click back on the first day of sickness (which will now show an ambulance symbol), hold down the left mouse button and drag along the calendar, selecting the amount of days off sick. A dialogue box will appear asking you to confirm the amount of days selected are correct.
When highlighting the sick days, you must select all days that the employee was sick, regardless of whether these are working days or not, in order for the software to correctly calculate SSP. The employee must be sick for four consecutive days or more in order to qualify for SSP. (4 or more consecutive days off sick forms a ‘Period of Incapacity for Work’ or ‘PIW‘) – The first three working days of this sick leave are classed as Waiting Days and no SSP is payable at this point.
On the next working day following the 3rd waiting day the ambulance symbol changes to SSP, indicating that statutory sick pay is now payable.
Adding SSP to the payslip
4) – To add SSP to an employee’s payslip, click on the ‘Settings’ button, select the Sickness tab and click in the box ‘Add SSP to Payslip’.
5) – The SSP payable will then appear in the Pay Details screen in the ‘SSP, SMP, SPP & SAP’ column in the relevant pay period. For tax year 2019-20 the weekly rate for SSP is £94.25, which for an employee who works a five day week equates to £18.85 per day.
6) – Note that SSP will be added to any other pay currently entered for that employee. If you already have other items of pay entered for the employee for that particular pay period then it may be necessary for you to adjust their pay to account for the fact that the employee was off sick. There are no fixed rules for this, and so Payroll Manager will not reduce an employees pay automatically when they are absent due to sickness. Instead you should make these changes manually according to the contract of employment between the employee and the employer. In the example below, the Basic Pay for April has been adjusted by £300 in respect of the employee absence.
New rules in response to the Coronavirus / COVID-19 situation
The Government has announced that it plans to bring forward legislation to change the SSP eligibility rules in response to the Coronavirus / COVID-19 situation. The proposed new rules have not yet been published in detail. We would advise you to read the GOV.UK Coronavirus (COVID-19) guidance for employees, employers and businesses page for further information. The instructions below show how to process SSP in Payroll Manager for affected individuals, and will be updated as and when the Government publish further information.
Paying SSP from day 1 instead of day 4
The Government have announced that SSP will be available from day 1 instead of day 4 for affected individuals (i.e. they will not have to serve the three ‘waiting days’ as described in step 3 of the guide above). If you need to pay SSP to an employee that is entitled to SSP under these new rules then you should proceed as follows:
i) Enter the period of sickness into the calendar screen as normal (using the method described in steps 1 to 6 above). The software will calculate the SSP due (but will still apply the ‘3 waiting days’ rule)
ii) Refer to the relevant table below to see how much additional SSP should be paid to the employee to cover these ‘waiting days’
FOR SSP paid in tax year 2019-20
|2019-20 Unrounded daily rates||Days employee normally works in week||1 day to pay||2 days to pay||3 days to pay||4 days to pay||5 days to pay||6 days to pay||7 days to pay|
2019-20 Example (using the table for 2019-20 above): If an employee normally works 5 days a week, then their ‘daily’ rate of SSP (for 2019-20) is £18.85. If they are entitled to 3 extra days of SSP then their additional payment will be £56.55
FOR SSP paid in tax year 2020-21
|2020-21 Unrounded daily rates||Days employee normally works in week||1 day to pay||2 days to pay||3 days to pay||4 days to pay||5 days to pay||6 days to pay||7 days to pay|
2020-21 Example (using the table for 2020-21 above): If an employee normally works 5 days a week, then their ‘daily’ rate of SSP (for 2020-21) is £19.17. If they are entitled to 3 extra days of SSP then their additional payment will be £57.51
iii) From the main menu in Payroll Manager click ‘Pay‘ then ‘Pay Details‘ and select the appropriate employee.
iv) Click on the ‘Adjustments’ tab, and enter the amount of the additional SSP to be paid in the relevant pay period in the ‘SSP Adjustment‘ column. This figure will be added to any SSP already calculated by Payroll Manager.
Reclaiming SSP paid to affected individuals from HMRC
The Government has announced that they will allow certain employers (i.e. those with less than 250 employee) to reclaim up to 14 days SSP per eligible employee affected by COVID-19. On 3 April 2020 they published further guidance about who would be eligible for the scheme. Details of how the scheme will work have not yet been finalised. Please see the GOV.UK page Claim back Statutory Sick Pay paid to employees due to coronavirus (COVID-19) for the latest information.
We would advise you to keep detailed records of all SSP payments that you make to affected employees so that you can reclaim SSP once a mechanism has been introduced by HMRC in order for you to do so.
I have added ambulance\sickness symbol to the calendar but no SSP is being paid, why? – There are a number of reasons why Payroll Manager may not calculate the payment of SSP.
1) The ‘Average weekly pay’ of the employee is not high enough for them to qualify for SSP. The average weekly pay (taken over an 8 week period prior to them becoming sick) must be at or above the ‘Lower Earnings Limit (LEL)’ for that year. The LEL for 2019-20 was £118, and for 2020-21 the LEL is £120. To see if this is the cause, click on the first ambulance\sickness symbol that you have added to the calendar. e.g.
If you see a message indicating the Average Weekly Pay is below the LEL, then this means that the employee does not earn enough to qualify for SSP. EXCEPTION: In cases where the employee has been working for the employer for less than 8 weeks then you should calculate what the employees normal pay would have been if they were not sick, and use that figure instead. To do this, click on the ‘Settings’ button on the calendar, then on the ‘Sickness’ tab, and enter your calculated figure in the ‘Over-riding average weekly pay’ box.
If this figure is above the LEL then this will trigger the payment of SSP.
2) The sickness period that you have entered on the calendar is not in this tax year, or continues into the following tax year.
By default, The ‘Calendar’ screen allows you to enter periods of sickness in this tax year, and also into the first few months of the next tax year. If you enter sick days after the last pay day of the year, then the symbols on the calendar will remain as ‘ambulance’ symbols, and not change to ‘SSP’ symbols. This is because SSP for those particular days will be paid in the following tax year. e.g.
In the example above, the monthly pay date has been set to 29th March (signified by the small, black, vertical line on the calendar screen). The SSP for 30th and 31st March, which are after the final pay day for the year, will be paid in the following year.
What about ‘linked’ periods of sickness? – If an employee has a further PIW (i.e. a period of sickness of 4 consecutive days or more) and there is a gap of less than 56 days between the start of this new PIW and the end of the previous PIW, then any ‘waiting days’ served in the original PIW count towards the three waiting days required in the second PIW. Payroll Manager ‘links’ PIWs automatically.
Can the employer reclaim SSP from HMRC? – No (*unless the SSP is related to COVID1-9 – see section above). Prior to April 2014, small employers could recover a proportion of the total SSP paid to their employees via what was called the ‘Percentage Threshold Scheme. This scheme came to an end in April 2014, and since then SSP has been entirely employer funded.