Statutory Sick Pay (SSP) is paid to employees who are unable to work because of illness. This is the legal minimum you must pay your employee. This guide explains how you would go about this, but first let’s look at some of the terminology around SSP.
|Important: If you need help with SSP for employees due to COVID-19 then please see Track COVID-19: Statutory Sick Pay.
Period of incapacity for work (PIW)
In order for SSP to be paid a PIW needs to be formed. This is a period of sickness lasting 4 or more consecutive days, this includes non-working days, bank holidays and weekends.
If there are less than 4 days then no PIW has been formed, so no SSP is due.
Average Weekly Earnings (AWE)
An employee must have average weekly earnings of at least the Lower Earnings Limit (LEL) for National Insurance to qualify for SSP.
These are the days your employee normally works, they can be counted as waiting days and can be paid SSP.
When a PIW had been formed, the first 3 days are not payable, these are the waiting days, after this SSP is due. If the PIW is linked then the waiting days only apply to the first PIW.
- Go into your Open pay run, and select the employee you wish to pay.
- Click on Actions, Pay Statutory Leave.
- Select Statutory Sick Pay from the drop down list. This will open up the SSP screen.
- The ‘from’ and ‘to’ dates default to the date range of your open pay run.
- The waiting days will default to 3 but you can override this should you require.
- The qualifying days default to Mon to Fri.
- Select the start and end date your employee was off sick by clicking the calendar buttons.
- Tick the qualifying days your employee works.
- In the Basic Pay Adjustment drop down list, you can select one of the following options:
- Reduce basic pay by statutory amount - Pays the Basic pay deducting the SSP
- Do not pay basic pay - Pays only the SSP
- Pay basic pay as entered - Pays the Basic pay along with the SSP
- Click Save.
Note: If the Basic pay adjustment is set up incorrectly for an employee before the pay run was created, you can edit the adjustment on the Open Payrun. To edit, hover over the SSP line and select the red square icon that appears on the right-side of the SSP line.
Once applied, you will see the waiting days, the number of SSP days and the amount of SSP paid.
You will also see the corresponding days of salary being deducted, so the employee won’t get paid his normal wage and SSP at the same time.
Should the employee be off sick again for more than 4 consecutive days within a period of eight weeks or less, their SSP will be linked. This means that the employee will not have 3 waiting days deducted.
Employee Not Entitled to SSP
You may have an employee that isn’t entitled to SSP, it could be that they have reached the maximum 28 weeks payable, or they don’t have sufficient earnings. In these cases you need to issue an SSP1 form.
If you tick Choose not to pay SSP, it will then allow you to select a reason from the drop down list.
Once this has been applied, the pay run will show that no SSP has been paid.
Once the pay run has been finalised, go into Employee Details, Leave Balances to find the link to the SSP1 form.
Note: if you are transferring your payroll from another system and you have an employee who is currently off sick, you can override the waiting days in the pay run to 0.
You also have the option to override the average weekly earnings in the pay run as well.
If your employee has reached the cap of 28 weeks SSP, you will be unable to pay any more SSP and will be given a warning in the View Log area.
Use the Employee Details, Documents to store any sick certificates.
You can set up your employees qualifying days pattern in Employee Details, Pay run Defaults, Standard Work Week, then click on Advanced to edit the days your employee works.
If you have moved from another software to QuickBooks Online Advanced Payroll, check whether the employee has another SSP instance. If they do, the employer should check that the sickness is linked to the previous absence within 8 weeks:
- Go to Employees or Payroll menu, then select List
- Select the Employee who requires the SSP Adjustment.
- Select Statutory Payments from the Employee Settings list.
- Click Statutory Sick Pay and click Add.
- Select the Advance options on the set-up of SSP, then select Override.
- Enter the number of Waiting Days as 0 (zero) because the Waiting Days would have been taking into account before the Sickness data was migrated to QuickBooks Online Advanced Payroll.
- Check the amount due to be paid and select Save.
This process will ensure that the employee will have the correct SSP paid. The waiting days will be taken into account, and the SSP should be paid for the full days, if less than 28 weeks.
The employer would need to keep track of the linked SSP, and manually check that no more than 28 weeks are paid to the employee in the linked SSP.
Note that SSP is not a statutory payment where the employer is able to reclaim back from HMRC.