Statutory Sick Pay (SSP) is the legal minimum your employer must pay you when you are too ill to work. At £116.75 per week for up to 28 weeks, it is significantly less than most people's normal salary — making budgeting during illness essential. This guide explains how SSP works, how it is taxed, what happens when it runs out, and how to check whether your employer offers something better in 26-27.[1]
How much is SSP and how long does it last?
SSP is paid at a flat rate of £116.75 per week for up to 28 weeks (approximately 6.5 months) of continuous illness. It is not paid for the first 3 qualifying days of your illness — these are “waiting days” where you receive nothing. After that, SSP is paid for every qualifying day (typically your normal working days) at the daily rate of £23.35 (if you work 5 days per week).
To qualify for SSP, you must earn at least £123 per week on average (the Lower Earnings Limit) and be genuinely unable to work due to illness or disability. You must have been ill for at least 4 consecutive days (including non-working days) before SSP kicks in. Agency workers, part-time employees, and fixed-term contract workers are all eligible provided they meet the earnings threshold.
The annual equivalent of SSP is approximately £6,071 — which is well below the Personal Allowance of £12,579. This means if SSP is your only income for the full year, you would pay no income tax. However, most people are only on SSP for part of the year, with normal salary for the rest, so the tax position depends on your total annual earnings.
How is Statutory Sick Pay taxed?
SSP is treated as normal earnings and processed through your employer's payroll system (PAYE). Income tax at 20% or 40% is deducted based on your tax code, and National Insurance would apply if the SSP amount exceeded the NI Primary Threshold. However, at £116.75/week, SSP is below the weekly NI Primary Threshold of £20 — meaning you pay no NI on SSP alone.
The cumulative PAYE system works in your favour during sickness. If you worked at full salary for several months before falling ill, you will have paid tax based on the assumption of earning that salary all year. When your income drops to SSP, the cumulative system recognises that your year-to-date income is lower than projected and may refund some tax through your payslip. This means your SSP payments may initially be slightly higher than the gross rate due to tax refunds being applied.
If you remain on SSP for the full 28 weeks and earn nothing else in the year, your total earnings are approximately £3,269 — well below the Personal Allowance of £12,579. In this scenario, any tax deducted earlier in the year should be refunded in full, either through the payroll or via a P800 reconciliation after the year ends.
What is enhanced or occupational sick pay?
Many employers offer sick pay above the statutory minimum, often called occupational sick pay or enhanced sick pay. Common arrangements include full pay for a certain number of weeks (e.g., 4 weeks full pay, then 4 weeks half pay), or a tiered system based on length of service. Enhanced sick pay is taxed identically to normal salary — full income tax and NI apply because it is contractual earnings.
Check your employment contract, staff handbook, or HR department for your specific sick pay entitlement. Employers are not required to tell you their scheme upfront unless asked. If your employer only pays SSP (the legal minimum), the income drop during illness will be severe — from your normal salary to just £116.75/week. This is why income protection insurance and emergency funds are important for anyone without a generous employer sick pay scheme.
When enhanced sick pay runs out, your employer switches to SSP for the remainder of the 28-week period. Some employers provide enhanced pay for longer than 28 weeks (which is more generous than the law requires). If your employer's enhanced scheme lasts less than 28 weeks, SSP continues until the total reaches 28 weeks.
What happens when SSP runs out after 28 weeks?
After 28 weeks, SSP stops regardless of whether you are still unwell. Your employer issues an SSP1 form confirming that SSP has been exhausted. At this point, you may be able to claim:
- Employment and Support Allowance (ESA) — if you have sufficient NI contributions and are assessed as having limited capability for work
- Universal Credit — means-tested support for those with low savings and household income
- Personal Independence Payment (PIP) — if your condition affects daily living or mobility (not means-tested)
The transition from SSP to benefits can take several weeks, creating a potential income gap. Apply for ESA or Universal Credit before your SSP ends to minimise the gap — you can apply up to 3 months before SSP expires. Your GP will need to provide medical evidence of your ongoing inability to work.
If you recover and return to work within 28 weeks but then fall ill again with the same condition within 8 weeks, the new period of illness is linked to the previous one. This means SSP continues from where it left off (no new waiting days) but the total28-week entitlement includes both periods combined.
How should I budget during illness on SSP?
The income drop from normal salary to SSP is dramatic. For someone earning £35,000, monthly take-home might be approximately £2,400. On SSP, monthly income drops to roughly £506 — a shortfall of over £1,900 per month. Planning steps include:
- Check your employer's sick pay policy — many employers provide several weeks at full pay before dropping to SSP
- Review insurance policies — income protection insurance, critical illness cover, or mortgage payment protection may provide additional income
- Contact your mortgage lender — most will offer a payment holiday if you are on SSP (interest still accrues)
- Check benefit eligibility — council tax reduction, Housing Benefit, or Universal Credit may be available depending on household income and savings
- Notify student loan company — if you earn below the threshold, repayments stop automatically through PAYE
Does SSP affect my pension contributions?
Your pension contributions during SSP depend on your scheme rules. Under auto-enrolment, contributions are based on qualifying earnings — if your SSP is below the auto-enrolment threshold (currently £10,000/year), your employer is not required to make contributions during SSP. Many employers do continue pension contributions during sick leave (on your pre-illness salary) as part of their enhanced package, but this is not legally required for SSP-only periods.
If pension contributions stop during illness, you can make up for the gap later through additional voluntary contributions — potentially benefiting from carry forward of unused annual allowance. See our pension carry forward guide for how this works.
Sources
- HMRC — Statutory Sick Pay (SSP). Rate: £116.75/week for up to 28 weeks. Eligibility: earn at least £123/week. Accessed July 2026.
- HMRC — Income Tax rates and Personal Allowances. Personal Allowance £12,579, basic rate 20%. Accessed July 2026.
- HMRC — National Insurance rates and categories. Primary Threshold £20/week. Accessed July 2026.