Statutory Sick Pay: £123.25 a week or 80% of earnings, whichever is lower, for up to 28 weeks, worked for a client's employee

An employer client has someone off sick for a month and asks what they must pay. Another has a part-timer on £100 a week and wants to know if the same figure applies. The GOV.UK rule is a "whichever is lower" test, so the answer changes with the person's pay. This guide sets out the rule and works it for a few pay levels.

What the source says

GOV.UK gives Statutory Sick Pay (SSP) as £123.25 a week or 80% of average weekly earnings, whichever is lower, paid for up to 28 weeks. The page says the employer works out average weekly earnings over eight weeks, and that someone who has not yet been paid for eight weeks can still qualify. The pages I fetched do not give a tax year for the rate, so check that £123.25 is the current figure before quoting it to a client.

The sums: where the flat rate takes over

The two limbs are equal when 80% of earnings is £123.25, so earnings of £123.25 / 0.8 = £154.06 a week (£154.0625 before rounding).

Check: £100 x 0.8 = £80.00; £150 x 0.8 = £120.00; £154.06 x 0.8 = £123.25; £123.25 / £200 = 0.61625; £123.25 / £300 = 0.4108; £123.25 / £500 = 0.2465. The practical point for a client: below about £154 a week the employee gets 80% of pay, and above it the sick pay is a fixed sum, so a higher earner loses a bigger share of pay.

Two cases to run for a client

A full 28 weeks at the flat rate. 28 x £123.25 = £3,451.00 (£123.25 x 20 = £2,465.00, and £123.25 x 8 = £986.00; together £3,451.00). That is the most SSP one employee can be paid for one spell under the figures I read.

A part-timer on £150 a week. 80% is £120.00, which is below £123.25, so SSP is £120.00 a week. Over 28 weeks that is 28 x £120.00 = £3,360.00, which is £91.00 less than the flat-rate total (£3,451.00 - £3,360.00).

Variable pay. If the last eight weeks of pay total £1,000, the average is £1,000 / 8 = £125.00 a week. 80% of £125.00 is £100.00, which is lower than £123.25, so SSP is £100.00 a week, or 28 x £100.00 = £2,800.00 over 28 weeks. The same employee on a £200 average would be on the flat rate instead.

Why it matters to the client

• Keep the eight-week earnings figure on file. The lower-of test cannot be run from a contract rate alone when pay varies.
• Say the cost up front. For one long absence the client can budget up to £3,451.00 of SSP, before any employer costs on top, which I did not read about here.
• Check the floor first for low earners. Pay for the hours worked still has to meet the National Minimum Wage rates. Other costs of staff are in what a new hire costs at 15% employer NI, and pension on pay is in auto-enrolment at 8% of qualifying earnings.

What I did not read

I did not read the GOV.UK rules on who qualifies, the lower earnings limit, waiting days, how the daily rate is split for part weeks, linked spells of sickness, when SSP ends, recovering any of the cost, or how SSP is treated for PAYE and National Insurance. The tables assume a full week of sickness and one average-earnings figure, and I have not checked any client's payroll.

Overlyft builds AI staff who join your practice team and take the sick-pay check for a client's payroll, work out each absent employee's eight-week average and the lower-of figure, and list the weeks left to 28, with a person approving before anything goes back to the client.

This is general information, not legal or financial advice. Check the GOV.UK pages for your client's case.