Sick pay: how it works and how it is calculated
TL;DR, the essentials
- When an employee is off sick, their pay usually comes from two bricks: a statutory minimum (in the UK, Statutory Sick Pay) and, in many contracts, an occupational (contractual) sick pay top-up from the employer.
- From 6 April 2026 in the UK, SSP is £123.25 per week or 80% of average weekly earnings, whichever is lower (Employment Rights Act 2025, gov.uk).
- The old three-day waiting period has been removed: SSP is now paid from the first qualifying day of sickness, for up to 28 weeks.
- The Lower Earnings Limit has also gone, so all eligible employees qualify, whatever they earn.
- Every figure below is indicative, not personalised advice. Sick pay rules and amounts differ from one country to another, so always check your local rules and your employment contract.
“Will I keep my full salary while I am off sick?” The answer is rarely a simple yes or no. Your pay depends on how two mechanisms stack up, each with its own rules, timing and caps. Here is how sick pay works and how it is calculated, step by step, with a worked example. The amounts use the UK Statutory Sick Pay system as a reference point (verified against gov.uk and Acas, July 2026). They are indicative only: rules vary by country, so treat this as an explainer, not a payroll ruling for your exact situation.
What makes up your income when you are off sick?
When an employee cannot work because of illness, their income usually stops coming from their normal salary and instead comes from up to three sources that can sit on top of each other.
The statutory minimum
A legally required floor paid by the employer, such as Statutory Sick Pay (SSP) in the UK, to replace part of the lost wage.
Occupational sick pay
Many contracts add an employer top-up (occupational or contractual sick pay) that lifts income above the statutory floor, often to full pay for a set period.
Insurance, sometimes
Beyond the contractual period, an income protection or group sickness policy may pay out, depending on the employer’s benefits.
These bricks do not start at the same moment and do not have the same ceiling. That layering is exactly why two employees on the same salary can receive very different amounts while off sick.
Worth knowing
This article covers ordinary sickness absence. The rules differ for work-related injury, maternity or other statutory leave, where the rates and timing are not the same. Outside the UK, the statutory scheme has a different name, rate and duration entirely.
How is statutory sick pay calculated?
In the UK from 6 April 2026, Statutory Sick Pay is the lower of two figures: a flat £123.25 per week, or 80% of the employee’s average weekly earnings. Most people simply get the flat weekly rate, because 80% of their earnings is higher than £123.25. The 80% cap only bites for lower earners, who now receive a proportion of their pay rather than nothing.
- Weekly SSP = the lower of £123.25 or (average weekly earnings × 80%)
- Daily SSP = weekly SSP ÷ number of qualifying days that week
SSP is paid only on qualifying days, meaning the days the employee would normally be contracted to work. So the daily amount depends on the working pattern: someone who works five days a week has a lower daily rate than someone who works three, because the same weekly total is spread over more or fewer days.
Mind the cap
For a higher salary, £123.25 a week is far below normal take-home pay. That is exactly where occupational sick pay and income protection matter. Always check the current statutory rate on gov.uk, as it is reviewed each tax year in April.
Two changes from April 2026 matter here. The Lower Earnings Limit was removed, so every eligible employee now qualifies regardless of how little they earn. And SSP can be paid for up to 28 weeks per period of sickness before it runs out.
Running payroll for your team?
The right HR software applies the rate, qualifying days and any top-up automatically, kept up to date with each tax year.
When does sick pay start?
Historically, the first three days of sickness in the UK were “waiting days” with no SSP. That waiting period has now been removed. Under the Employment Rights Act 2025, SSP is payable from the first qualifying day of sickness absence.
- Statutory minimum: from day one. There is no longer an unpaid waiting period for SSP, so the statutory floor applies from the first day the employee is off and due to work (gov.uk, Acas).
- Occupational top-up: whenever the contract says. Any employer scheme that pays above SSP starts, and ends, according to the terms in the employment contract, which can be more generous than the statutory minimum.
Good habit
Read the sickness clause in your contract before you assume anything. Many employers pay full salary for a number of weeks before dropping to SSP. The contract, not the legal minimum, decides what you actually receive, and it is often more favourable. In other countries, the waiting period and start date can be entirely different.
How does occupational (contractual) sick pay work?
Above the statutory floor, many employers run their own occupational sick pay (OSP) scheme, also called contractual or company sick pay. It is optional for the employer, but once it is written into the contract it becomes an enforceable entitlement. A typical scheme replaces income far more generously than SSP, usually on a tapering basis.
Eligibility and generosity are set by the contract, not the law, but the common pattern looks like this, with SSP counted inside the total (the employer tops up on top of the statutory amount):
These periods usually grow with length of service: a longer-serving employee keeps full pay, then half pay, for longer. Once the contractual entitlement is exhausted, the employee falls back to SSP alone, until the 28-week statutory limit is reached.
Employers also handle the admin so the employee sees a single, clean payslip. Rather than the person chasing separate payments, SSP and the top-up are combined into one salary line, which is simpler for everyone and easier to audit.
Avoid payslip errors
Qualifying days, the SSP cap, the 28-week limit, the contractual taper: good HR software keeps all of these current for you.
A worked example (indicative)
Take an employee earning £600 gross per week, working a five-day week, off sick for two weeks, on a contract with no enhanced sick pay. Here is the method, purely for illustration.
Which figure applies
80% of £600 is £480, which is higher than £123.25, so the flat rate of £123.25 per week applies.
Daily rate
£123.25 ÷ 5 qualifying days ≈ £24.65 per qualifying day.
From day one
With no waiting period, SSP is due from the first qualifying day the employee is off.
Two-week total
10 qualifying days × £24.65 ≈ £246.50 gross across the fortnight, before tax and National Insurance.
Now change one detail: give the same person a contract with full pay for the first six weeks of sickness. Their income for that fortnight would be their normal £600 per week, with the £123.25 of SSP simply absorbed inside that figure. Same illness, same salary, very different outcome, which is the whole point about reading the contract.
This is not personalised advice
These amounts are orders of magnitude to show the method. Your real figure depends on your contract, your working pattern, tax and National Insurance, and the statutory rate in force. For a binding calculation, rely on gov.uk, Acas or a payroll professional. In other countries, use the local statutory scheme instead.
Sick pay is not a single percentage: it is a stack of rules (the statutory rate, qualifying days, the contractual taper) that a spreadsheet reproduces badly and that payroll software makes reliable.The MiisterSoftware team, payroll fundamentals.
How do you get sick pay right in a company?
For an HR team or a small-business owner, working out the statutory rate, qualifying days and any contractual top-up by hand for every absence is a classic source of errors. A good HR or payroll platform automates the lot: it applies the correct statutory rate, spreads it across the right qualifying days, layers on the occupational scheme by length of service, and updates the figures at each tax year.
- Rates kept current: the statutory weekly rate, the 80% cap and the 28-week limit tracked automatically.
- Contractual schemes handled: full pay, half pay and service-based tapers applied without manual lookups.
- Auditability: every payslip line is justified, which is useful in a dispute or an inspection.
The next step
To manage sickness, absence and payroll without errors, compare our best HR software 2026, or head back to the HR & payroll hub to explore the other topics.
Frequently asked questions
How much is statutory sick pay in 2026?
In the UK from 6 April 2026, Statutory Sick Pay is the lower of £123.25 per week or 80% of the employee’s average weekly earnings (Employment Rights Act 2025, gov.uk). It is paid on qualifying days, so the daily amount is the weekly rate divided by the number of days the person would normally work. These figures are indicative and vary by country, and your contract may pay more.
When does statutory sick pay start?
From 6 April 2026 the old three-day waiting period was removed, so SSP is payable from the first qualifying day of sickness absence. Any occupational sick pay from the employer starts and ends according to the employment contract, which can be more generous than the statutory minimum.
How long can you get sick pay?
Statutory Sick Pay can be paid for up to 28 weeks per period of sickness. Contractual or occupational sick pay can run for a shorter or longer period depending on the contract, often full pay for a set number of weeks or months, then half pay, before the employee falls back to SSP only.
Who is eligible for statutory sick pay?
From April 2026 the Lower Earnings Limit was removed, so all eligible UK employees qualify for SSP regardless of how much they earn, provided they are off sick and would normally be due to work. Rules differ in other countries, where the statutory scheme, rate and eligibility conditions are set nationally.
What is occupational sick pay?
Occupational (or contractual) sick pay is an employer scheme that pays above the statutory minimum. It is optional for the employer, but once written into the contract it becomes an entitlement. A common pattern is full pay for a number of weeks, then half pay, before dropping to SSP alone, with the generosity often increasing with length of service.