Who pays statutory sick pay: the employer's duty

Statutory sick pay is paid by the employer, not the state, at a rate of £123.25 a week for up to 28 weeks of sickness absence ^[1]. Unlike statutory maternity or paternity pay, none of that cost can be reclaimed from HM Revenue and Customs, a position that has held since the Percentage Threshold Scheme was abolished on 6 April 2014 ^[2].

The question of who pays sounds simple until an employee has two jobs, works through an agency, or sits inside an umbrella company. Each of those arrangements changes which party carries the liability, and getting it wrong exposes an employer to a claim, a penalty, or an HMRC dispute determination.

This article sets out who is legally responsible for paying SSP, why the burden falls entirely on the employer, how liability works across agencies and umbrella companies, who receives no SSP at all, and what recourse an employee has when an employer refuses to pay.

Key takeaways

• The employer pays SSP directly through payroll, subject to Income Tax and National Insurance in the normal way.
• HMRC does not reimburse SSP; the employer absorbs the full cost, unlike other statutory payments where 92% or more is recoverable.
• Agency workers are usually paid SSP by the agency, and umbrella company workers by the umbrella, because those bodies are the employer of record.
• An employee with more than one job can receive SSP from each employer separately, assessed job by job.
• The self-employed cannot get SSP, and an employee who is refused it can escalate to HMRC's Statutory Payment Dispute Team.

The short answer: the employer pays

By law, an employer must pay SSP to every employee who meets the qualifying conditions, from the first day of sickness absence and for as long as 28 weeks in a single spell of incapacity ^[1]. SSP is a statutory floor, the legal minimum an employer owes a sick employee, and it cannot be contracted out of or reduced below the flat weekly rate.

SSP is a legal minimum, not a discretionary benefit

Many employers confuse SSP with occupational sick pay, the more generous contractual scheme some businesses offer. The two are separate. Occupational sick pay is whatever the contract promises, and it may pay full salary for a set number of weeks. SSP is the statutory backstop that applies to every eligible employee regardless of what the contract says ^[3]. Where a contractual scheme pays more than SSP, the SSP is treated as included within it rather than paid on top ^[4].

Since 6 April 2026 the qualifying conditions have widened considerably. The Employment Rights Act 2025 removed the Lower Earnings Limit as an eligibility test and abolished the three waiting days, so SSP is now payable from the first qualifying day of absence and to employees who earn below the flat rate ^[3]. An employer that still applies the old three-day wait is underpaying, and the reforms are explained in more depth in the Moonworkers guide to what changed in the SSP reform.

The employer pays through payroll, with tax and NI deducted

SSP is not a separate cheque or a benefit paid outside the payroll. It runs through the employee's normal pay cycle, is shown on the payslip, and is reported to HMRC through Real Time Information like any other earnings ^[4]. Because SSP counts as earnings, it is subject to Income Tax, employee National Insurance and any pension or student loan deductions that apply, although in practice the personal allowance often covers a low weekly payment so little or no tax is deducted ^[1]. The tax treatment is covered in full in the Moonworkers article on whether sick pay is taxable.

Payroll software that holds the HMRC Recognised badge calculates SSP, applies the correct deductions and files the resulting FPS automatically, which removes the manual reconciliation that in-house spreadsheets often get wrong. Most modern UK payroll software handles the SSP calculation and the RTI submission in a single pass.

Who counts as "the employer" for SSP

The word "employer" carries the whole answer, so the harder cases are the ones where the employing party is not obvious. Agency work, umbrella arrangements and personal service companies each place the liability somewhere specific.

Agency workers and temporary staff

An agency worker is normally paid SSP by the agency, not by the end client where the worker is placed ^[9]. The agency is the party that pays the worker's wages, operates PAYE and therefore sits as the employer for SSP purposes. The hirer that the worker actually attends has no SSP liability, because it does not pay the worker directly.

The same qualifying conditions apply as for any other employee, and since 6 April 2026 a temporary worker qualifies from the first day of absence with no earnings floor ^[3]. Agencies that engage large numbers of short-assignment workers now carry a materially larger SSP exposure than before the reform, because low-paid and short-tenure staff who were previously excluded are now inside the scheme ^[9].

Umbrella company employees

Where a worker is engaged through an umbrella company, the umbrella is the employer of record and pays the SSP, not the agency and not the end client ^[9]. The umbrella runs the worker's payroll, deducts tax and National Insurance, and therefore holds the statutory duty to pay SSP when the worker is sick and eligible. Every period of sickness has to be recorded accurately and shown on the payslip so the entitlement can be traced ^[4].

The table below summarises who pays across the common engagement types.

Directors and one-person companies

A director who takes a salary through PAYE is an employee of their own company and can receive SSP from it, provided the qualifying conditions are met ^[1]. The company is the employer, so the company pays. For a one-person business that pays a low director's salary, this is often academic, because the SSP would still run through payroll and be reported on the FPS in the usual way ^[4]. Accountants managing payroll for many director-only companies typically rely on a payroll bureau platform to flag SSP entitlement automatically across the client base.

Employees with more than one employer

An employee who holds two or more jobs is treated separately by each employer for SSP ^[10]. Each employer assesses eligibility as though it were the worker's only employer, so the worker can receive SSP from more than one of them at the same time.

This matters because sickness does not always stop a person doing every job. A worker signed off from a physically demanding role might still be fit for a desk-based second job, in which case one employer pays SSP and the other does not ^[10]. The test is whether the illness makes the worker incapable of the specific work under that specific contract, applied employer by employer ^[3].

Where two contracts with the same employer are aggregated for National Insurance, they are treated as one job and one SSP payment applies. Where they are not aggregated, each is assessed on its own ^[11]. The practical result is that a multi-job worker's total SSP can exceed the single-job maximum, because each employer's 28-week cap runs independently.

Who does not pay, and who does not receive

The flip side of the employer duty is that two groups fall outside it entirely: the self-employed, who have no employer, and HMRC, which does not reimburse the employer.

The self-employed get no SSP

Self-employed people are not entitled to SSP, because SSP depends on an employment relationship that pays wages through PAYE ^[1]. A sole trader who cannot work through illness has no statutory sick pay to fall back on and must instead consider Employment and Support Allowance or Universal Credit through the benefits system ^[10]. This is one of the clearest lines between employment and self-employment in payroll terms.

HMRC does not reimburse SSP

The most consequential point for employers is financial: SSP cannot be recovered from HMRC. The Percentage Threshold Scheme, which once let employers reclaim SSP above a monthly threshold, was abolished on 6 April 2014, and the temporary Coronavirus SSP Rebate Scheme that briefly reopened recovery for small employers closed on 24 March 2022 ^[2]. No replacement exists, so every pound of SSP is a direct cost to the business.

That contrasts sharply with the family-related statutory payments, where employers recover most or all of the cost through the Employer Payment Summary. The table below shows the gap.

For a small business, the difference is stark. A month of maternity pay is largely funded by HMRC, whereas a month of sick pay is not, which is why absence management and accurate SSP calculation matter to cash flow as much as to compliance ^[11].

Eligibility the employer must check before paying

Before paying, the employer has to confirm the employee actually qualifies. Since the 6 April 2026 reforms the conditions are fewer than they were, but they still exist ^[3]. The main gates are set out below.

The removal of the earnings floor is the single biggest change. Employees earning below the flat weekly rate now receive 80% of their average weekly earnings instead of being excluded altogether ^[3]. An employer running payroll in-house must apply the "lower of 80% of average weekly earnings or £123.25" test for low earners, which is exactly the kind of rule a HMRC-recognised payroll API resolves automatically at the point of calculation.

What happens when an employer will not pay

An employee who believes SSP has been wrongly withheld is not left without recourse. There is a defined route that ends with HMRC, and employers who refuse without cause face a penalty.

Form SSP1 and the dispute route

If an employer decides not to pay SSP, it must explain why on form SSP1, which also signposts the employee towards other support such as Employment and Support Allowance ^[8]. Where the employee disagrees, or the employer fails to issue an SSP1 at all, the employee can ask HMRC to decide the matter ^[7]. The referral goes to HMRC's Statutory Payment Dispute Team, which can issue a formal, binding decision on entitlement ^[5].

Once HMRC has issued a formal decision and the employer has not appealed within the 30-day window, HMRC can arrange to pay the outstanding SSP to the employee directly where the employer still defaults ^[12]. This makes SSP one of the few payroll obligations that HMRC will ultimately settle on the employer's behalf when the employer refuses.

HMRC penalties for refusing to pay

An employer that refuses or repeatedly fails to make a statutory payment is liable to a penalty of up to £3,000, set by an authorised HMRC officer ^[6]. The penalty sits on top of the SSP that remains owed, so non-payment is both a legal breach and a financial risk. From 7 April 2026 the newly created Fair Work Agency also began consolidating state enforcement of employment rights, with statutory payments enforcement planned to come within its scope in later phases ^[9].

Work out an employee's SSP quickly

An employer working out how much SSP is due, especially for a part-time employee with fewer qualifying days, can size the figure with the Moonworkers SSP calculator, which applies the 2026-27 rate and the first-day rule to any pattern of qualifying days.

Conclusion

The rule underneath every complication is the same: whoever pays the wage pays the sick pay. That places the burden on the direct employer, the agency, the umbrella or the personal service company, and it leaves the self-employed outside the scheme and HMRC out of pocket only when an employer defaults. The reforms of 6 April 2026 widened the pool of employees an employer must pay, so the cost of getting SSP wrong, whether by underpaying a low earner or missing the first-day rule, has grown.

For any business that engages staff through more than one route, the safest position is a payroll system that assesses each engagement on its own terms and settles the SSP through RTI without manual intervention. As statutory sick pay enforcement tightens under the Fair Work Agency, accurate calculation at source stops being a convenience and becomes a defence.

Frequently asked questions

Does the government pay statutory sick pay or does my employer?

The employer pays SSP directly through payroll, not the government. HMRC does not fund or reimburse it, because the recovery scheme that once allowed employers to reclaim SSP was abolished on 6 April 2014. HMRC only steps in to pay an employee directly in the narrow case where an employer defaults after a formal dispute decision has been issued.

Who pays SSP if I work through an agency or an umbrella company?

If a worker is engaged directly by an agency, the agency pays SSP because it operates the worker's payroll. If the worker is engaged through an umbrella company, the umbrella pays, because it is the employer of record. The end client where the work is carried out does not pay SSP in either case, since it does not pay the worker's wages.

Can I get statutory sick pay from two jobs at the same time?

Yes. An employee with more than one employer is assessed separately by each, as though that employer were the only one. If the illness makes the person unfit for both jobs and both meet the qualifying conditions, both employers pay SSP. If the person can still do one job but not the other, only the employer of the job they cannot do has to pay.

What can an employee do if an employer refuses to pay SSP?

The employer should give reasons on form SSP1. If the employee disagrees, or no SSP1 is issued, they can refer the matter to HMRC's Statutory Payment Dispute Team, which can make a binding decision. An employer that refuses or repeatedly fails to pay a statutory payment can face a penalty of up to £3,000.