Work out Statutory Sick Pay
Day-one SSP under the 2026 rules: the lower of £123.25 or 80% of average weekly earnings.
Employers cannot reclaim Statutory Sick Pay from HMRC. The route that once let them do so, the Percentage Threshold Scheme, was abolished on 6 April 2014, and since then the employer has absorbed 100% of every pound of Statutory Sick Pay paid [1][2]. At the 2026-27 weekly rate of £123.25, a full 28-week claim therefore leaves the employer roughly £3,451 out of pocket with no recovery available [3].
That makes Statutory Sick Pay the odd one out among UK statutory payments. Every family-related statutory payment can be recovered, most at 92% and small employers at 109%, yet Statutory Sick Pay stands alone as the payment the employer never gets back [4]. The distinction catches out businesses that assume all statutory pay works the same way through the Employer Payment Summary.
This article explains why Statutory Sick Pay cannot be reclaimed, when that changed, how it differs from recoverable statutory payments, what the 6 April 2026 reforms did to the cost employers carry, and the legitimate ways a business can reduce the burden without a recovery that no longer exists.
Key takeaways
- Statutory Sick Pay cannot be reclaimed from HMRC; the employer bears the full cost.
- Recovery ended on 6 April 2014 when the Percentage Threshold Scheme was abolished.
- Family-related statutory payments are different: employers recover 92%, or 109% under Small Employers' Relief.
- The 6 April 2026 reforms widened the SSP bill by removing waiting days and the Lower Earnings Limit.
- Employment Allowance and well-designed absence management are the practical ways to offset the cost.
The short answer: no recovery for Statutory Sick Pay
There is no mechanism for an employer to reclaim Statutory Sick Pay from HMRC in the 2026-27 tax year [4]. Government guidance for employers states plainly that Statutory Sick Pay is the one statutory payment that cannot be recovered, and the cost sits entirely with the business that pays it [1].
This is a settled position, not a temporary one. Unlike statutory maternity, paternity, adoption, shared parental, parental bereavement and neonatal care pay, which all carry a recovery percentage, Statutory Sick Pay carries none [4][5]. For an employer budgeting for absence, Statutory Sick Pay should be treated as a pure cost line.
What changed on 6 April 2014
Before April 2014, the Percentage Threshold Scheme let an employer reclaim Statutory Sick Pay where the total paid in a month exceeded 13% of that month's Class 1 National Insurance liability [2]. The scheme was withdrawn from the start of the 2014-15 tax year, shifting full financial responsibility for Statutory Sick Pay onto employers [6].
The government's stated reasoning was to redirect the funding into occupational health support rather than a blanket rebate [2]. Employers were given a transitional window to submit outstanding Percentage Threshold Scheme claims for sickness up to 5 April 2014, but no new claims have been possible since [6]. More than a decade on, many long-standing businesses still remember the old rebate and wrongly assume it survives.
The one historic exception, now closed
A temporary recovery route did exist during the coronavirus pandemic. The Statutory Sick Pay Rebate Scheme let smaller employers reclaim coronavirus-related Statutory Sick Pay for a limited period [7]. That scheme closed to claims and amendments on 24 March 2022, and it applied only to pandemic-related absence, never to ordinary sickness [8].
The rebate scheme is worth understanding only so it is not mistaken for a live option. No equivalent exists in the 2026-27 tax year, and the default position, full employer liability, has applied to routine Statutory Sick Pay throughout [7][8].
Why Statutory Sick Pay differs from other statutory payments
The contrast with family-related statutory payments is the source of most confusion. Those payments flow through the same payroll and the same Real Time Information submissions, yet they are treated very differently when it comes to recovery [4]. The table below sets out where each payment stands.
| Statutory payment | Recoverable from HMRC? | Standard recovery | Small Employers' Relief |
|---|---|---|---|
| Statutory Sick Pay (SSP) | No | 0% | 0% |
| Statutory Maternity Pay (SMP) | Yes | 92% | 109% |
| Statutory Paternity Pay (SPP) | Yes | 92% | 109% |
| Statutory Adoption Pay (SAP) | Yes | 92% | 109% |
| Statutory Shared Parental Pay (ShPP) | Yes | 92% | 109% |
| Statutory Parental Bereavement Pay (SPBP) | Yes | 92% | 109% |
| Statutory Neonatal Care Pay (SNCP) | Yes | 92% | 109% |
The pattern is stark: six statutory payments are recoverable, and Statutory Sick Pay is the single exception [4][5]. An employer running these figures across several clients needs a system that applies recovery to the right payments and zero to Statutory Sick Pay, which is why accountants typically manage this in a payroll bureau platform rather than by hand.
How family payment recovery works
Employers reclaim family-related statutory payments at 92% of the amount paid, or 109% if the business qualifies for Small Employers' Relief [4]. A business qualifies as a small employer when its total Class 1 National Insurance liability was £45,000 or less in the last complete tax year before the qualifying week, ignoring reductions such as Employment Allowance [9]. Qualifying employers recover the full payment plus a further 9% as compensation for the employer National Insurance due on it [10].
None of this applies to Statutory Sick Pay. The 92% and 109% rates, the £45,000 threshold and the Small Employers' Relief concept all belong to the family-payment regime and have no read-across to sick pay [4][9].
Recovery runs through the Employer Payment Summary
Recoverable statutory payments are claimed by including them on an Employer Payment Summary submitted to HMRC, which reduces the PAYE and National Insurance the employer pays over that month [4]. The Employer Payment Summary is a Real Time Information submission, so it depends on software that holds the HMRC Recognised badge to file correctly [12]. Because Statutory Sick Pay is not recoverable, it never appears as a recovery figure on the Employer Payment Summary, even though it is reported through payroll like any other payment [1].
What the 2026-27 reforms mean for the cost employers carry
The 6 April 2026 reforms to Statutory Sick Pay increased the amount employers pay while leaving the no-recovery rule untouched. Two structural changes drove the increase [13].
Day-one payment and the removal of the Lower Earnings Limit
Statutory Sick Pay is now payable from the first qualifying day of sickness rather than the fourth, because the three waiting days were abolished [13]. Short absences that produced no cost under the old waiting-day rule now generate Statutory Sick Pay from day one [14]. At the same time, the Lower Earnings Limit was removed as an eligibility test, so lower-paid and part-time staff who previously earned too little to qualify are now covered, with those below the flat rate receiving 80% of their average weekly earnings [15].
Both changes widen the population and the number of days that attract Statutory Sick Pay, and because none of it is recoverable, the full increase falls on the employer [15][3]. For a platform embedding UK payroll into its own product, absorbing this kind of change automatically is exactly what an HMRC-recognised payroll API is designed to do.
The scale of the cost
Because Statutory Sick Pay cannot be reclaimed, the reform translates directly into a higher net cost for businesses. The change extends some sick pay protection to around 1.3 million lower-paid workers who previously had none, and every day of that new entitlement is funded by employers rather than the state [15][13]. For businesses with frequent short-term absence, the removal of the waiting-day buffer is the most noticeable part of the increase, since it is those short spells that were previously free [16].
A worked example of the unrecoverable cost
The gap between Statutory Sick Pay and the recoverable payments is easiest to see side by side. Consider a small employer that qualifies for Small Employers' Relief and has two absences in the same period: one employee off sick for eight weeks, and one on maternity leave drawing the flat rate for the same span [4].
| Payment | Weeks | Weekly amount | Employer pays | Recovered from HMRC | Net cost to employer |
|---|---|---|---|---|---|
| Statutory Sick Pay | 8 | £123.25 | £986.00 | £0.00 | £986.00 |
| Statutory Maternity Pay (flat rate, SER) | 8 | £194.32 | £1,554.56 | £1,694.47 (109%) | Net gain of £139.91 |
The maternity payment costs the employer more per week yet ends as a net gain once the 109% recovery and 9% National Insurance compensation are applied, while the cheaper sick pay leaves the business £986 down with nothing reclaimed [4][10]. The figures are illustrative, but the direction is fixed: Statutory Sick Pay is the only line in the statutory-pay budget that never comes back [1].
For a growing business, that asymmetry compounds. As headcount rises and short absences become more frequent under the day-one rule, the unrecoverable sick pay line grows faster than most owners expect, which is why larger and multi-entity employers plan for it explicitly in their enterprise payroll budgeting [13].
How employers can offset the cost without a recovery
With no recovery route for Statutory Sick Pay, the practical question is how to manage the cost rather than reclaim it. Several legitimate levers exist.
Employment Allowance reduces employer National Insurance
Employment Allowance does not touch Statutory Sick Pay directly, but it reduces an eligible employer's secondary Class 1 National Insurance bill, freeing cash that helps absorb unrecoverable statutory costs [17]. It is claimed through payroll and set against employer National Insurance as it falls due [17]. Because employer National Insurance rose to 15% on 6 April 2026, the allowance is more valuable than before, a point explored in the guide to employer National Insurance.
Employers should note that Employment Allowance and Small Employers' Relief use the same £45,000 Class 1 National Insurance measure but for different purposes, and Employment Allowance is ignored when testing the Small Employers' Relief threshold [9]. Keeping the two separate in the accounts avoids double-counting when budgeting for absence [17].
Absence management and occupational sick pay design
The most effective control on Statutory Sick Pay cost is reducing avoidable absence and designing any contractual sick pay carefully around the statutory floor [16]. Many employers offer occupational sick pay above the statutory minimum, but only Statutory Sick Pay is a legal obligation, so a clear policy that sets out where contractual pay stops and the statutory floor takes over keeps the cost predictable [16]. Accurate records also ensure the business pays exactly what is due and no more, which matters when the payment cannot be recovered [14]. Modern SME payroll software tracks the statutory figure separately from any top-up so the two never blur.
Recording Statutory Sick Pay correctly even though it is not recoverable
Statutory Sick Pay still has to be reported through payroll and shown on payslips, even though nothing is reclaimed [1]. Getting the figure right protects the employer twice: it ensures the employee receives their legal entitlement, and it prevents the business from paying more than the statutory amount by mistake, an overpayment that cannot be recovered from HMRC [14]. Employers that price payroll per payslip can compare the cost of running this accurately against manual processing on the Moonworkers pricing page.
Check the Statutory Sick Pay figure before it hits the payroll
Because the cost is unrecoverable, the figure has to be right first time. The Moonworkers SSP calculator applies the 2026-27 rate, the qualifying-days logic and the day-one rule so an employer can confirm the exact amount payable.
Count every calendar day of sickness, including weekends and days off. If the employee is still off, enter today as the last day for the amount due so far.
Statutory Sick Pay due
£0.00
Three quick steps: the absence dates, the working pattern, then the last few payslips. The calculation updates here.
Sick pay handled automatically, from day one
Moonworkers applies the 2026 SSP rules on every payrun: average weekly earnings, the 80% taper, linked absences and the 28-week cap, all itemised on HMRC-compliant payslips.
Conclusion
The answer to whether employers can claim back Statutory Sick Pay is a clear no, and it has been since the Percentage Threshold Scheme ended in April 2014. Statutory Sick Pay is the one statutory payment with no recovery mechanism, which sets it apart from the family-related payments that employers reclaim at 92% or 109%. The 6 April 2026 reforms did not soften that position; by starting payment on day one and extending it to lower earners, they increased the unrecoverable bill.
The realistic response is to manage the cost rather than chase a rebate that does not exist. Accurate calculation, disciplined absence management, and full use of reliefs such as Employment Allowance all reduce the net burden. As statutory pay obligations keep expanding, the businesses that stay in control will be those whose payroll systems separate the recoverable from the unrecoverable and get every figure right at the point of payment.
Frequently asked questions
Can a small business reclaim Statutory Sick Pay from HMRC?
No. Small businesses cannot reclaim Statutory Sick Pay, and there is no small-employer concession for it [4]. Small Employers' Relief, which lets qualifying businesses recover 109% of family-related statutory payments, does not extend to Statutory Sick Pay in any form [9].
When did employers stop being able to reclaim SSP?
Employers stopped being able to reclaim Statutory Sick Pay on 6 April 2014, when the Percentage Threshold Scheme was abolished [2]. The only later exception was the temporary coronavirus Statutory Sick Pay Rebate Scheme, which closed to claims on 24 March 2022 and applied only to pandemic-related absence [8].
Which statutory payments can employers actually claim back?
Employers can reclaim Statutory Maternity Pay, Statutory Paternity Pay, Statutory Adoption Pay, Statutory Shared Parental Pay, Statutory Parental Bereavement Pay and Statutory Neonatal Care Pay [4]. The standard recovery rate is 92%, rising to 109% for employers who qualify for Small Employers' Relief, and the claim is made through the Employer Payment Summary [5].
How can an employer reduce the cost of Statutory Sick Pay?
An employer cannot recover Statutory Sick Pay, but the net cost can be managed. Claiming Employment Allowance reduces the employer National Insurance bill, freeing cash to absorb unrecoverable statutory costs [17]. Careful absence management and a clear sick pay policy that separates any contractual top-up from the statutory floor keep the cost predictable [16].
Image prompt for Imagen (also in frontmatter)
Documentary photograph, a small business owner at a workshop desk reviewing payroll paperwork and a laptop showing a spreadsheet, an invoice tray and a calculator nearby, warm natural light through an industrial window on a weekday afternoon, palette of warm cream, aged oak, muted teal and brushed steel, the paperwork and calculator anchoring the lower-left two-thirds of the frame, shot on a Canon R6 at 50mm f/2.8, photojournalism, subtle film grain, no AI artefacts, no warped text, landscape orientation 16:9.
