Company Sick Pay Calculator 2026/27

Sick Pay in the UK: What You're Entitled To

Sick pay in the UK operates across two distinct tiers: the baseline statutory minimum that every employer must provide by law (Statutory Sick Pay, or SSP), and enhanced contractual sick pay that employers may offer as part of their occupational benefits package. Understanding both levels ensures employees know their legal rights and employers effectively budget absence costs.

Statutory Sick Pay (SSP) — Key Facts 2026/27

Enhanced Sick Pay: What Employers Offer

While there is no legal mandate to pay more than statutory minimum SSP, many employers offer enhanced (contractual or occupational) sick pay to attract and retain talented staff. Common contractual structures include:

• Full pay for X weeks, then half pay for Y weeks, then SSP: Highly common in the public sector, NHS, and large corporate employers.
• Full pay for short absences: Many employers pay 100% of salary for the first 5 to 10 sick days before reverting to statutory SSP.
• Contractual sick pay equal to SSP: Employers explicitly specify that statutory SSP is paid with no extra contractual top-up.

Sick Pay and the Bradford Factor

Frequent short-term unplanned absences generate a significantly higher Bradford Factor score than a single extended period of illness with the same total number of days off. HR teams track Bradford Factor scores alongside sick pay expenditure to identify disruption patterns and trigger supportive absence reviews.

Sick Pay Worked Example: SSP + Enhanced Combined

Total Sick Pay Calculation: (4 × £538.46) + (4 × £123.25) = £2,153.84 + £493.00 = £2,646.84. The employer bears the entire cost — SSP cannot be reclaimed from HMRC.

How to Design an Enhanced Sick Pay Policy

If your business plans to offer sick pay benefits beyond statutory SSP, these are the standard structures categorized by employer size:

Always document policies clearly within written employment contracts. Apply sick pay rules consistently across all teams to eliminate discrimination risk.

Return to Work: What Employers Must Do

1. Conduct a return-to-work interview: Maintain an informal, supportive conversation to understand the absence cause and confirm fitness to resume duties.
2. Agree reasonable adjustments: Implement phased returns or lighter duties where appropriate (disabled employees require adjustments under the Equality Act 2010).
3. Maintain statutory SSP records: Retain accurate records of statutory sick payments for at least 3 years for HMRC audit compliance.
4. Issue Form SSP1 if required: Provide form SSP1 if an employee is ineligible or when statutory SSP expires after 28 weeks, enabling them to claim Employment and Support Allowance (ESA).
5. Reset Bradford Factor tracking: Ensure return-to-work dates are closed off in your HR system to update absence trigger levels accurately.

Self-Employed: No SSP — What Are Your Options?

Sole traders and self-employed directors are not covered by Statutory Sick Pay. If illness prevents you from earning, consider these statutory and private safeguards:

• Employment and Support Allowance (ESA): State financial support for individuals unable to work due to medical conditions. Basic rate starts at £90.50/week via Universal Credit or legacy ESA.
• Income Protection Insurance: Replaces 50% to 70% of gross earnings if ill or injured after a deferred waiting period. Essential safety net for sole traders.
• Critical Illness Cover: Pays a tax-free lump sum payout upon diagnosis of covered serious conditions.

For Employers: Managing Sick Pay Costs

SSP is a direct operating expense as HMRC no longer reimburses sick pay. The UK national average is 4.4 sick days per employee per year (CIPD 2024 survey). At £24.65/day for a 5-day week, direct SSP costs average ~£108 per employee annually before covering temporary cover or lost productivity.