Small businesses can often end up losing a lot of money through employees taking sick leave.
Having clear policies in place is necessary to help you to take action where needed, and understanding the rules around Statutory Sick Pay (SSP) is vital.
Employers should understand their obligations to pay sick pay, know who is entitled to it, and when employees qualify.
Read on for the information you need to know about how to deal with pay roll for employees taking sick leave…
When to pay Statutory Sick Pay (SSP)
You have to pay SSP to employees who are too ill to work. Employees are entitled to claim SSP from the fourth ‘qualifying day’ of sickness – i.e when they have been absent from work for 4 days in a row. A qualifying day is a day which the employee would normally have been at work.
You cannot count a day as a sick day if the employee has worked before going home sick.
Can employers opt out of SSP?
Many employers choose to opt out of the SSP scheme. However, if you decide to go down this route, your company’s sick pay arrangements must pay employees daily rates that are the same or better than the statutory sick pay amount.
How much is SSP?
SSP is paid at a flat rate of £94.25 per week and is payable for a maximum of 28 weeks for a single period of sickness.
SSP is subject to income tax and employees’ National Insurance contributions (NICs).
Who qualifies for SSP?
All employees who are unable to work because of sickness and who earn over £118 per week will qualify for SSP, including temporary staff and agency workers on fixed-term contracts.
An employee must tell you they’re sick within the notice period set by you, and supply proof of their illness after 7 days off. Proof of illness could be a note from a doctor, physiotherapist, podiatrist or occupational therapist.
There is no qualifying length of service or minimum number of hours per week, but an employee must have completed
some work under their contract.
Can you withhold SSP?
There are some circumstances when an employer can withhold SSP.
You can do this if the employee has recently drawn a benefit such as maternity allowance or maternity pay, or is off work for a pregnancy-related illness in the 4 weeks before the week that their baby is due.
Employees who have claimed Employment and Support Allowance within 12 weeks of starting or returning to work for you are not eligible for SSP.
Employees in custody or on strike on the first day of their sickness do not qualify for SSP.
You can also withhold SSP if you have a genuine reason to suspect an employee is not actually ill.
You cannot force your employees to take annual leave if they are eligible for sick leave.
How to pay SSP
The first SSP payment should be on the next pay day after the sick leave has been taken and is paid in the same way as wages, deducting tax and National insurance contributions.
You cannot reclaim SSP for sick leave.
If you need any help in doing payroll for an employee who is on sick leave, get in touch with us here at Magpie Accountancy for advice.