Woman on the phone

Sick Pay: a simple guide

What is sick pay? If the thought of sorting out your company’s sick pay sends you into a tailspin, our guide helps you figure out who to pay sick pay to, plus when to pay it and how much sick pay to offer.

As an employer, employee sickness is part and parcel of running a company.

Since the turn of the century, the average number of working days lost to sickness in Great Britain each year stands at almost 150 million — equivalent to around 5 days per worker annually over this period.1

Based on average UK earnings per week in August 2021, if a company offered full sick pay for each day off sick, 5 days of sickness absence would cost £581 every year per average employee.2

Managing sickness absence is therefore incredibly important, but not just because of costs — it’s also vital to ensure the health and wellbeing of employees. It’s also why some employers choose to offer certain employee benefits that take care of this for their staff.

All this makes it vital to understand how UK sick pay works, what your obligations are and the options open to both you as an employer and them as an ill employee.


Types of sick pay

The two main types of sick pay are:

The legal minimum amount you must pay eligible workers who are off sick

  • Occupational sick pay

A discretionary scheme you might want to offer employees that’s more generous than the legal minimum.


Statutory Sick Pay

As mentioned, this is the legal minimum you must pay eligible workers who are off sick. The government sets the amount and reviews it each year.


How much is Statutory Sick Pay?

In 2020/21, SSP is worth £96.35 per week for eligible employees.3

Use this handy government sick pay calculator to work out how much Statutory Sick Pay an employee is entitled to.


Who is eligible for SSP?

To get Statutory Sick Pay, an employee must:

  • Be an employee (working under an employment contract for you)
  • Earn at least £120 per week
  • Have been sick for at least 4 days in a row (including non-working days)
  • Have given you correct notice, within any time limit set by you (e.g. before 9am on the first morning they are sick)
  • Provide proof of their illness if they’re off for more than 7 days in a row (including non-working days), usually in the form of a fit note from their doctor.4


Who pays SSP?

Employers are legally obliged to pay Statutory Sick Pay to all eligible workers (see above).


When do you start paying Statutory Sick Pay?

You start paying SSP from the fourth day an employee is off sick following a 3-day waiting period.


When do you stop paying SSP?

You are legally obliged to pay Statutory Sick Pay for 28 weeks, or until the employee:

  • Returns to work
  • No longer qualifies for it
  • Starts receiving Statutory Maternity Pay or Maternity Allowance.5,6


How do I pay Statutory Sick Pay?

You should pay SSP the same way you pay wages: On your normal payday and deducting tax and National Insurance.


Occupational sick pay

Occupational sick pay is any sick pay you choose to offer as a company above and beyond the legal minimum set out by SSP.

Some employers offer sick employees full pay for a set period, e.g. up to 6 months, followed by a percentage of their salary (such as 50-75%) for another period thereafter.


How much is occupational sick pay?

As occupational sick pay is entirely up to you, it can be as much as you want or can afford to provide. The only rule is that you can’t offer less than SSP.

Options include:

  • Paying Statutory Sick Pay to workers for the first 3 days before SSP kicks in
  • Adding a little bit extra to SSP to top it up by a set amount each week for a set number of weeks
  • Paying a sick employee a proportion of their salary (e.g. 75%) for a set period (e.g. 2, 3 or 5 years)
  • Going the whole hog and pay workers full pay for a set period (e.g. for up to a year).


Who pays occupational sick pay?

As the employer, you pay occupational sick pay entirely out of your pocket.

While it’s a great benefit to provide, consider affordability. Could you run into financial problems if you offer a period of full sick pay and two or three members of staff go off sick all at once, meaning you have to provide not just full sick pay but also pay for replacement cover?


Who gets occupational sick pay?

Again, as it’s your scheme, you can set the rules. You might offer it to every employee from their first day on the job. Or you might extend it only to employees who’ve been at the company for a certain period.

Of course, you must still pay SSP to any eligible employees who don’t fall within the scope of your occupational sick pay rules.

This said, one thing to bear in mind is that it’s important to treat all employees broadly the same where you can. Otherwise, there may be potential discrimination claims if there’s a significant difference in your approach from employee to employee.7


Why should I offer occupational sick pay?

You might ask why you’d pay more than the legal minimum, especially given that sick pay can be expensive. Yet, as with all benefits, occupational sick pay is a great way to show your people you appreciate them.8

Moreover, the reality is that many businesses have sick pay as a cornerstone of their benefits offering. For many employees, it’s often the bare minimum they expect, making it a strong attraction when you’re looking to hire.9

Yet, as mentioned, paying decent sick pay — especially to multiple people for a prolonged period if this is necessary — would likely be costly.

As a result, some businesses choose a benefit such as Unum’s Income Protection Insurance. This pays a benefit after an employee has been off sick for a set period, allowing them to receive a longer period of sick pay than you may otherwise be able to afford.

See more about Group Income Protection Insurance


What should my sick pay policy be?

This is entirely up to you. However, when thinking about your sick pay policy, consider these key points:

  • In the first instance, whether you want to offer only SSP or some form of occupational sick pay over and above this
  • If you do offer occupational sick pay, how much this should be and how long to provide it for
  • For an occupational sick pay scheme, eligibility criteria — for example, do staff have to pass probation before becoming entitled to occupational sick pay?
  • How to communicate your company’s sick pay policy and how it’s written into contracts etc.
  • How employees should tell you they’re unwell — for example, should they call before a certain time in the morning?
  • The financial impact occupational sick pay could have, especially if more than one employee becomes sick for a prolonged period.


How can Unum help?

As one of the UK’s leading employee benefits providers,10 Unum offers support for both employers and employees regarding sickness absence.

Our Group Income Protection provides longer-term financial assistance than you might otherwise be able to afford under an occupational sick pay scheme. It pays a percentage of an employee’s wages and starts paying out from 8 weeks. Again, consult with your adviser to decide how long it pays out for — 2, 3, 4 or 5 years, or until State Pension Age.

There are also some benefits with Group Income Protection that you don’t get as part of a standalone occupational sick pay scheme. For example, Unum’s policy offers:

  • Preventative support before a claim is even made to maintain employee health and wellbeing
  • Rehabilitation experts after a claim to advise in areas such as structuring a gradual return to work if possible
  • Additional health and wellbeing support at no cost to you with our award-winning health and wellbeing app Help@hand*
  • The Unum Mental Health Pathway, an early intervention service providing fast, specialist support for both employers and employees on managing mental ill health and work.

Help@hand won Benefits Innovation of the Year at the 2021 WSB Awards.11 It offers employees a range of supportive and preventative options to keep them well and help tackle issues when they do arise by putting the following five key services in the palm of their hands via a smartphone:

  • 24/7 digital GP appointments
  • Mental health support from qualified professionals
  • Physiotherapy
  • Medical second opinions
  • Access to an employee assistance programme packed with life, money, health and wellbeing support, including a 24/7 employee helpline.

For more information about Group Income Protection, speak to your adviser.

1 Office for National Statistics (ONS), Sickness absence in the UK labour market, March 2021
2
ONS, Average weekly earnings, October 2021
3
Gov.uk, Statutory sick pay (SSP)
4
Gov.uk, Statutory sick pay (SSP)
5
Gov.uk, Statutory Sick Pay (SSP): employer guide
6
Gov.uk, Statutory Sick Pay (SSP): employer guide
7
XpertHR, Introduce, manage and review an occupational sick pay scheme
8
Ondeck, Benefits of Sick Leave for Small Businesses
9
Cover Magazine, Sick pay: How much do you get?, July 2013
10 Corporate Adviser Workplace Protection & Wellbeing Report
11
WSB Awards 2021, 2021 winners, October 2021

* Help@hand is a virtual, value-added benefit service which connects the employees of Unum customers to third party specialists who can help manage their health and wellbeing, and that of their family. Access to the service is facilitated by Unum at no cost to the Unum customer. Unum is not the provider of the service but can withdraw or change the service at any time. The service is entirely separate from any insurance policy provided by Unum and is subject to the terms and conditions of the relevant third-party specialists. There is no additional cost or increase in premium as a result of Unum making this benefit available.

All information is correct as of the date of publishing (29/11/2021). Whilst Unum has taken great care to ensure all information on this page is accurate, we accept no responsibility or liability for anyone’s use of the information on this page.

We're here to help

Have a question or can’t find what you’re looking for? Get in touch with us.

Contact us