SSP vs Company Sick Pay

SSP is statutory: Parliament sets the eligibility rules, rate and maximum payment period, and an employer cannot contract out of an eligible employee's entitlement. Company sick pay is contractual: the employer chooses the rate, duration and qualifying conditions, provided the arrangement never delivers less than the statutory minimum when SSP is due.

GOV.UK publishes the current SSP rules and rates. ACAS explains how statutory and contractual sick pay should appear in employment terms and absence policies. Company sick pay may be more generous, but calling it discretionary does not automatically remove contractual obligations created by clear wording or consistent practice.

The rights can run at the same time. A company scheme does not switch SSP off; it must explain how the SSP element is treated within the promised payment.

An inclusive policy says the company sick pay amount includes any SSP due. If normal weekly pay is £600 and the policy promises full pay, payroll pays £600 in total and records the SSP element within it. This is the usual way to prevent double payment.

An additive policy says company sick pay is paid on top of SSP. If it promises £600 plus SSP, the total exceeds normal pay unless the wording adds a cap. Do not assume the scheme is inclusive because that is commercially convenient. State it expressly, for example: 'Company sick pay is inclusive of any SSP payable for the same absence.'

Assume an eligible employee normally earns £600 a week and receives £246.50 SSP for two complete weeks under the 2026/27 rate used on this site.

• SSP only: total gross sick pay is £246.50.
• Full pay, inclusive of SSP: total gross pay is £1,200; £246.50 is the SSP element and £953.50 is the company top-up.
• Half pay, inclusive of SSP: total gross pay is £600; £246.50 is SSP and £353.50 is the top-up.
• £600 company pay, additive: total gross pay is £846.50 if the policy truly promises £600 plus SSP.

The numbers show why one word in the policy can materially change cost.

A company scheme can have different limits from SSP, so payroll needs two running balances. Company full pay might end after four weeks while SSP continues, or company pay might continue after the statutory entitlement has ended. A service requirement for enhanced pay does not remove SSP rights.

Another edge case is a company scheme with unpaid waiting days. If SSP is legally due for those qualifying days, the employer still pays SSP even though the contractual enhancement has not started. Where normal earnings are below a promised percentage or an absence links to an earlier spell, calculate the statutory position separately before applying the contractual top-up.

Both SSP and company sick pay are earnings processed through payroll, with PAYE income tax and National Insurance applied as appropriate. Keep the SSP calculation visible in payroll records even where the employee receives full contractual pay, because the statutory maximum and linked-absence rules continue in the background.

GOV.UK sets out SSP record and notice requirements, including when form SSP1 is needed. ACAS recommends clear reporting procedures and consistent handling of fit notes and return-to-work arrangements. Reconcile the absence dates, qualifying days, statutory amount, contractual top-up and remaining entitlement rather than posting one unexplained sick-pay figure.

A workable policy states who qualifies, when entitlement starts, the rate and duration, and whether service affects the benefit. It should also cover:

• whether company sick pay is inclusive of SSP or additive
• notification, self-certification and fit-note requirements
• treatment of recurring or linked absences
• what happens when company pay or SSP runs out
• interaction with phased returns, holidays and other leave
• when the employer may withhold only the contractual enhancement

Match the contract, handbook and payroll configuration. If discretion is retained, describe its scope and apply it consistently to reduce breach-of-contract and discrimination risk.

Start by calculating SSP under the current GOV.UK rules, then apply the contractual scheme. Use inclusive wording if the promised total already contains SSP; use additive wording only if the extra payment is genuinely intended on top. Test the policy against a new starter, a long absence, a linked absence and the point at which enhanced pay ends.

The SSP calculator can check the statutory element, while the sick pay calculator can model a broader employer payment. The comparison is complete only when the payslip total, SSP record and policy wording all tell the same story.