Statutory Sick Pay (SSP) plays a crucial role in supporting employees who are unable to work due to illness. As an employer, understanding how SSP works and whether you can recover these costs is essential to managing your business finances effectively.
While some reimbursement options have existed in the past, the current rules are stricter and often misunderstood. This article explores everything you need to know, from eligibility and payment processes to historical schemes and future legislative changes, helping you stay compliant and informed.
What Is Statutory Sick Pay and Who Qualifies for It?
Statutory Sick Pay (SSP) is a legal requirement for employers to pay eligible employees who are unable to work due to illness. Employees must have an employment contract, earn at least £125 per week, and be off work for more than three consecutive days to qualify.
The SSP rate is £118.75 per week for up to 28 weeks. Some exceptions apply, such as maternity leave or receiving Employment and Support Allowance.
Key eligibility criteria include:
- Employee must have done some work under their contract
- Must give notice and proof of illness
- Certain employment types, such as agency workers or directors, have different rules
- Linked sickness periods must be considered
If the employee is not eligible or their SSP entitlement ends, form SSP1 must be issued so they can apply for other benefits.
When and How Should SSP Be Paid to Employees?
SSP should begin after the employee has been off sick for at least four consecutive days, with the first three being unpaid waiting days unless linked to a recent previous claim.
The payment should be made on the employee’s usual payday and processed through the normal payroll system. Tax and National Insurance deductions still apply.
Employers cannot force employees to use annual leave while on sick leave. If an employee returns to work or their entitlement ends, SSP should stop. If they are sick again within eight weeks, and the previous period was SSP-eligible, the waiting days might not apply again.
How Does the SSP Rebate Scheme Work for Employers?
Previously, employers could reclaim SSP costs under schemes like the Percentage Threshold Scheme (PTS) and the COVID-19 SSP Rebate Scheme.
These allowed eligible employers to recover SSP costs when they exceeded certain thresholds or applied during public health emergencies.
However, these schemes are now closed. Employers today generally cannot claim SSP back unless exceptional, government-announced provisions are in place. Understanding these past schemes is essential to recognise the current responsibilities.
Can Employer Claim Back SSP from HMRC?
In most cases, employers cannot claim back SSP from HMRC. The Percentage Threshold Scheme ended in 2014, and the temporary COVID-19 SSP Rebate Scheme has also been withdrawn. Therefore, the default position is that employers must absorb SSP costs as part of regular employment expenses.
Limited exceptions apply, such as:
- Specific government interventions during health emergencies
- Temporary rebate schemes introduced during national crises
Without an active relief scheme, employers must plan SSP costs into their regular budget and adopt absence management strategies.
What Is the HMRC Process for Claiming Back SSP?
If a rebate scheme is reintroduced in future, employers must follow a formal claim process through HMRC’s online services. This involves eligibility checks, accurate documentation, and timely submissions.
To prepare, employers should:
- Confirm eligibility against scheme criteria
- Gather accurate records of qualifying SSP payments
- Ensure valid medical evidence is retained
- Submit claims through HMRC’s online portal or payroll software
Claim submission should include:
- Employee details and sickness dates
- Payment records (SSP amounts, payroll dates)
- Fit notes or AHP reports
- Copies of SSP1 forms if issued
Proper use of HMRC’s Basic PAYE Tools or a recognised payroll system ensures compliance and avoids miscalculations.
What Records Should Employers Keep for SSP Claims?
Even though employers cannot currently claim back SSP, good record-keeping is vital in case of disputes or audits. HMRC recommends maintaining sickness and payment records for at least three years after the end of the relevant tax year.
Records should include:
- Employee name and National Insurance number
- Dates of sickness and qualifying days
- Daily SSP rate and total amount paid
- Fit notes or Allied Health Professional reports
- Payroll and tax documentation
Keeping these records helps in demonstrating compliance, especially if HMRC requests proof during an investigation or if a future rebate scheme becomes available.
What Were the Previous SSP Rebate Schemes and Why Were They Removed?
The Percentage Threshold Scheme (PTS) allowed employers to reclaim SSP if it exceeded 13 percent of their National Insurance liability. It was removed in 2014 to simplify the system and shift focus to managing employee sickness absence effectively.
During the COVID-19 pandemic, the government introduced a temporary SSP Rebate Scheme, allowing employers with fewer than 250 staff to reclaim up to two weeks’ SSP per eligible employee.
This ended in March 2022. These changes emphasised employer responsibility and the importance of health-focused workplace policies.
What Are the Common Reasons SSP Claims Get Rejected?
SSP claims, particularly during rebate scheme periods, may be rejected due to errors or non-compliance.
| Reason for Rejection | Explanation |
| Incomplete Records | Missing documentation or fit notes |
| Employee Not Meeting Eligibility | Earnings too low or not enough consecutive sick days |
| Late Claim Submission | Claims made after the allowed period |
| Incorrect Payroll Reporting | Errors in calculating or recording SSP payments |
Being organised with documentation and following HMRC guidelines reduces the chance of errors or denial.
What Steps Should You Follow If Your Employee Is Not Eligible for SSP?
Employees may not qualify for SSP due to contract type, insufficient earnings, or specific exclusions. Here’s how to proceed:
Issue Form SSP1
If your employee is ineligible or their SSP ends, you must issue Form SSP1. This allows them to apply for Universal Credit or Employment and Support Allowance.
Timely Notification
You must provide the SSP1 form:
- Within 7 days of the sickness start date (if ineligible)
- On or before week 23 of absence (if nearing 28-week limit)
Advise on Alternative Benefits
Help employees understand their rights and guide them on applying for financial support.
Checklist:
- Verify reason for ineligibility
- Complete and issue SSP1 promptly
- Maintain communication with the employee
Following these steps ensures your employee is informed, supported, and able to access alternative financial assistance without unnecessary delay.
Is There Any Alternative Support If SSP Can’t Be Reclaimed?
If reclaiming SSP is not an option, employers should explore alternative forms of financial support and proactive planning.
| Support Option | Details |
| Business insurance | Policies to cover long-term employee sickness |
| Government-backed schemes | Grants or relief in emergencies (COVID-style support) |
| Tax relief for small businesses | Adjustments that indirectly ease financial pressure |
Creating a healthy workplace and reviewing insurance options can provide stability when SSP costs arise unexpectedly.
What Happens If an Employer Overclaims SSP from HMRC?
Overclaiming SSP can lead to financial and legal consequences. HMRC may audit your claim and impose penalties or require repayments.
If overclaiming occurs:
- Review the claim details thoroughly
- Notify HMRC as soon as an error is discovered
- Rectify the mistake using the PAYE online system
- Be prepared for possible interest or penalties
Preventing overclaims starts with accurate record-keeping and consistent payroll processes. When in doubt, consult a compliance expert.
How Can Employers Correct Mistaken Claims?
Correcting an SSP overclaim should be done promptly and transparently. Begin by identifying the nature and scope of the mistake, whether it’s due to miscalculations or misreported sick days.
Once confirmed, you should amend the figures in your payroll system and inform HMRC using their online services.
If the error was claimed through a rebate scheme, you may need to resubmit the correct figures with supporting documents. Keeping accurate records helps in justifying the correction and avoiding further scrutiny.
Steps include:
- Identify the incorrect data
- Adjust payroll entries
- Inform HMRC using the appropriate form or portal
- Retain documentation of the correction
Acting quickly and keeping clear records ensures the overclaim is resolved efficiently and maintains compliance with HMRC requirements.
Conclusion
Understanding your obligations around Statutory Sick Pay (SSP) is essential for maintaining compliance and managing your business finances responsibly.
While most SSP costs cannot currently be reclaimed from HMRC, knowing the rules, maintaining proper records, and preparing for legislative changes ensures you remain on the right side of the law.
Be proactive, stay informed, and seek professional guidance when needed to navigate this area effectively.
Frequently Asked Questions
Can part-time workers receive the full SSP rate?
Yes, as long as they meet the eligibility criteria, part-time workers are entitled to the full weekly SSP rate. It is not calculated on a pro-rata basis.
What happens if an employee becomes sick during a holiday?
Sick leave takes precedence, and annual leave continues to accrue during the sickness period. The employee may reschedule their holiday once recovered.
Are zero-hour contract workers entitled to SSP?
Yes, if they meet the average weekly earnings threshold and other eligibility rules. Their contract type does not automatically disqualify them.
How do fit notes affect SSP eligibility?
Fit notes are only required if the absence exceeds 7 days. Employers cannot deny SSP solely for delayed submission of a fit note.
Can SSP be paid during maternity leave?
No, SSP is not payable during periods when the employee receives Statutory Maternity Pay or Maternity Allowance. Different rules apply to pregnancy-related illness.
What should I do if my payroll software miscalculates SSP?
Manually verify the calculations and correct the payroll entry. You should also report and fix the issue using HMRC’s online tools.
Will the SSP rules change under the Employment Rights Bill in 2026?
Yes, the government has proposed to remove the Lower Earnings Limit and waiting days from April 2026. Employers should prepare for these upcoming changes.
Also Read:
