Company Sick Pay vs SSP: Understanding Contractual Sick Pay in the UK

SSP is the statutory minimum for eligible workers; company sick pay is any additional contractual or discretionary provision offered by an employer. Company pay commonly includes SSP rather than being paid on top. Check your contract, entitlement remaining and payroll calculation.

This comprehensive guide provides a detailed comparison of company sick pay and Statutory Sick Pay in the UK. It covers the legal frameworks governing both systems, the eligibility criteria you must meet, the rules surrounding medical evidence, and what steps you can take if your sickness payments run out. If you require formal medical evidence to support your sickness claim and secure your pay, you can explore our private medical certificate service or submit an online consultation request directly through our portal for a swift clinical assessment.

The UK Sickness Payment Landscape: Statutory vs. Contractual

The UK sickness payment system is designed to provide a safety net for employees who are unable to work due to physical or mental illness. Sickness compensation is structured in two distinct tiers: the statutory minimum, which is legally mandated, and the contractual level, which is determined by individual employment agreements. Every employee in the UK is covered by the statutory minimum, provided they meet the legal eligibility criteria, but only a portion of the workforce receives contractual enhancements.

For sickness from 6 April 2026, eligible workers receive SSP from their first full qualifying day. The lower earnings limit and three waiting days have been removed. The ordinary 2026/27 weekly amount is the lower of £123.25 or 80% of average weekly earnings, for up to 28 weeks. Other eligibility rules and transitional protection can apply. See Acas SSP guidance.

Company Sick Pay, on the other hand, is an occupational scheme set up by an employer to pay employees more than the statutory minimum. These schemes are voluntary, meaning employers are not legally required to offer them. However, when an employer does offer a company sick pay scheme, and it is documented in the employment contract, the terms become legally binding. Contractual sick pay schemes vary widely between industries and employers, ranging from a few days of full pay to several months of full salary followed by half pay.

The historical development of sickness pay in the UK reflects a gradual shift towards protecting workers' financial security. Sickness payments are not merely an administrative detail; they are a critical component of public health and economic stability. When workers are forced to choose between attending work while ill or losing their income, many will choose to work, risking the spread of infectious illnesses or worsening their own health. The dual system of SSP and Company Sick Pay aims to balance the financial burden, with the state setting a basic floor of protection and employers having the flexibility to offer enhanced benefits to attract and retain talent in a competitive labor market.

What Is Company Sick Pay (Contractual Sick Pay)?

Company sick pay is a contractual benefit that replaces or enhances Statutory Sick Pay. If your employer operates an occupational sick pay scheme, the details will be outlined in your employment contract, your employee handbook, or your company's HR policy documents. Because these schemes are designed by the employer, they can establish their own rules regarding eligibility, payment rates, and administrative requirements, provided they do not fall below the statutory minimum.

A typical company sick pay scheme will specify: first, the length of service required to qualify for the scheme (e.g., passing a probation period or completing one year of service); second, the rate of pay during sickness (e.g., 100% of normal salary); and third, the maximum duration of the payments (e.g., 8 weeks of full pay in any 12-month period). Some schemes also include a sliding scale, where the entitlement increases with the employee's length of service.

It is important to note that company sick pay schemes can be discretionary. A discretionary scheme means that the employer reserves the right to evaluate each sickness absence individually and decide whether to pay the enhanced rate. However, employers must exercise this discretion fairly and consistently. If an employer behaves in a discriminatory or arbitrary manner when withholding discretionary sick pay, they may face claims of breach of contract or discrimination under the Equality Act 2010.

The inclusion of company sick pay in an employment contract serves as a powerful recruitment and retention tool for businesses. Companies that offer full pay during sickness are often viewed as more supportive and employee-centric, which can enhance staff morale and reduce overall turnover. However, because occupational schemes are contractual, they are subject to the terms agreed upon during hiring or updated through collective bargaining. Any changes to a contractual sick pay scheme must be agreed upon by both the employer and the employees or their representatives, and unilateral changes by the employer can lead to constructive dismissal claims.

Key Differences Between Company Sick Pay and SSP

To help you understand your rights, it is useful to compare the key features of Company Sick Pay and Statutory Sick Pay side-by-side. The most significant differences relate to the payment amounts, waiting days, and the duration of the benefits, which directly impact your financial security during a sickness absence.

The primary differences include:

Compare the amount, eligibility and duration in your contract. SSP now starts from the first full qualifying day for eligible workers, while company schemes have their own enhancement rules. Company pay may continue at full or partial salary for a stated period; there is no universal company entitlement.

When an employee receives company sick pay, the statutory sick pay is usually included within that amount rather than paid on top of it. The employer calculates the SSP entitlement, pays the employee their full salary, and offset the statutory amount internally. This means you do not receive "double pay" during your sickness absence.

Another key difference lies in the treatment of tax and national insurance contributions. Both Statutory Sick Pay and company sick pay are subject to Class 1 National Insurance and income tax deductions through the Pay As You Earn (PAYE) system. However, because company sick pay is often paid at the employee's normal salary rate, the tax deductions will be higher than those applied to the flat statutory rate. It is also important to note that if an employee is receiving company sick pay, they cannot also receive SSP as a separate, additional payment; the SSP is always topped up by the company pay to reach the agreed contractual amount.

Sickness Evidence and Notification Rules

Both Statutory Sick Pay and company sick pay schemes require employees to provide evidence of their illness and follow specific notification procedures. However, because company schemes are contractual, the rules for claiming occupational sick pay can be stricter than the statutory minimums set by the government.

Self-certification normally covers the first seven calendar days, including weekends. For a longer absence, discuss a fit note with the healthcare professional treating you and follow your employer's reporting policy. A private medical certificate is a different document from an NHS Med 3 fit note; check that your employer will accept it before paying. See GOV.UK sickness evidence guidance.

Follow the employer’s sickness reporting deadline. For SSP, notify your employer within the deadline they set, or within seven days if no deadline is set. If notice or evidence is delayed, explain why and ask payroll how it affects the payment.

Moreover, the notification requirements under company schemes are often designed to minimize disruption to business operations. For instance, a retail business may require a sick employee to call their direct supervisor by phone at least two hours before their shift starts so that cover can be arranged. A text message or email may not be accepted under the company policy. If the employee fails to follow these specific steps, the employer may be contractually entitled to withhold the enhanced company sick pay for that day, even if the employee later provides a valid GP fit note. This highlights the importance of familiarizing yourself with the exact reporting lines of your company.

What Happens When Your Sickness Payments Run Out?

A major concern for employees facing long-term illnesses is what happens when their sickness pay entitlement is exhausted. Sickness payments do not continue indefinitely, and understanding the transition to other support systems is vital for long-term financial planning.

When company sick pay ends, SSP may continue if you still qualify and have entitlement remaining within the 28-week maximum. The amount is calculated under current SSP rules, not the old £116.75 rate. Ask your employer for the reason and relevant SSP1 information if you are not entitled or entitlement ends.

Form SSP1 is a critical legal document. It explains why SSP has stopped or why you do not qualify, and it allows you to claim other state benefits. With form SSP1, you can apply for Employment and Support Allowance (ESA) or Universal Credit through the Department for Work and Pensions (DWP). Additionally, you should check whether your employer offers a Group Income Protection scheme or if you have private income protection insurance, which can provide long-term financial support during extended sickness absences.

For employees facing the exhaustion of their sick pay, the financial transition can be daunting. The reduction from full pay to SSP or state benefits represents a significant income drop. To mitigate this risk, many large UK employers offer group income protection insurance as an employee benefit. These policies typically kick in after a specified deferral period (often 13 or 26 weeks, matching the expiry of company sick pay) and pay a percentage of the employee's salary (e.g., 60% or 75%) for several years or until retirement if they remain unfit for work due to long-term illness or disability.

How DoctorCert Can Help with Your Sickness Documentation

DoctorCert offers a remote review for a private medical certificate. Issuance and the dates supported depend on the doctor's assessment and available evidence. This does not guarantee sick pay, employer acceptance or protection from dismissal. Check the work sick note service and your employer's requirements before booking. Urgent symptoms need medical care, not a certificate application.

Our service is built to support your sick pay claims with these key benefits:

A private certificate can provide medical evidence following a doctor’s assessment. It cannot establish a contractual pay entitlement or guarantee an employer’s acceptance. Confirm what document is needed before applying.

To request a private fit note or check our fees, visit our online booking page or view our pricing details on our pricing overview. We are here to provide the professional clinical evidence you need, helping you manage your sickness absence and secure your pay with confidence.

Frequently Asked Questions

Can my employer pay me less than Statutory Sick Pay (SSP)?

Your employer must pay the SSP amount you are entitled to. In 2026/27 the ordinary weekly rate is the lower of £123.25 or 80% of average weekly earnings, apportioned to qualifying days, with transitional protection in some cases.

Do I have a legal right to company sick pay?

No. There is no automatic legal right to company sick pay in the UK. Enhanced sick pay is a contractual benefit. You only have a right to it if it is included in your employment contract or company policy.

Can my employer stop my company sick pay if I don't provide a fit note?

Company sick pay depends on the contract or scheme rules. Ask HR what evidence is required and what happens if it is delayed. Check acceptance before buying a private work sick note; a purchase does not guarantee payment.

What is form SSP1 and when do I need it?

Form SSP1 is a DWP document provided by your employer when your Statutory Sick Pay is ending (after 28 weeks) or if you do not qualify. You need this form to claim Employment and Support Allowance (ESA) or Universal Credit.

Can I receive company sick pay and SSP at the same time?

When you receive company sick pay, the SSP amount is usually included within it, rather than paid as an extra sum. Your total payment will match your contractual rate, which must be equal to or higher than the SSP minimum.

Sources and scope

Information updated 8 October 2026 using Acas sick pay guidance, GOV.UK SSP rates, GOV.UK sickness evidence guidance. This article provides general information, not an individual clinical assessment or legal advice. Original publication date retained.