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How Zoho Payroll calculates and tracks Statutory Sick Pay
An employee calls in sick. You record the absence, check their eligibility, work out the applicable Statutory Sick Pay (SSP), adjust their salary, and make sure the right amount appears on their payslip.
It sounds straightforward until you have multiple employees with different working patterns, sickness periods, and pay levels.
Statutory Sick Pay (SSP) is a statutory payment that eligible UK employees receive when they are unable to work because of illness. From 6 April 2026, the rules changed significantly: SSP is now available to eligible employees regardless of their earnings, and it is payable from the first full day of sickness absence. The weekly amount is the lower of 80% of average weekly earnings or £123.25 for the 2026/27 tax year. (GOV.UK)
This is where payroll automation can help. Zoho Payroll brings sickness information and payroll calculations together, helping employers calculate SSP and keep track of the amount paid as part of the regular pay run.
What is Statutory Sick Pay?
SSP is the minimum amount an employer must pay an eligible employee when they are off work due to sickness, subject to the statutory rules.
For 2026/27, SSP is calculated at the lower of:
80% of the employee's average weekly earnings
£123.25 per week
SSP is paid from the first full day of sickness absence rather than from the fourth day, as under the previous rules. The lower earnings limit that previously determined SSP eligibility has also been removed. (GOV.UK)
The amount paid for a partial week depends on the employee's qualifying days.
How Zoho Payroll calculates SSP
Calculating SSP involves more than applying a fixed amount to an employee's salary. The calculation needs to take into account the employee's earnings, sickness dates, and qualifying days.
With Zoho Payroll, the process starts with recording the employee's sickness absence.
1. Record the employee's sickness absence
When an employee is absent because of sickness, the relevant leave or absence information needs to be recorded in the payroll system.
This establishes the period for which SSP needs to be considered and ensures that the absence is reflected when payroll is processed.
2. Determine the applicable SSP rate
For sickness absences beginning on or after 6 April 2026, Zoho Payroll can apply the current statutory framework when calculating SSP.
The weekly SSP amount is the lower of:
80% × average weekly earnings
or
£123.25
For example, if an employee's average weekly earnings are £140, 80% of their earnings is £112. Since £112 is lower than £123.25, the employee's weekly SSP would be £112.
If their average weekly earnings are £185, 80% is £148. The statutory weekly rate of £123.25 is lower, so £123.25 is used.
3. Calculate SSP based on qualifying days
SSP is not always paid as a simple weekly amount. If an employee is sick for part of a week, the amount needs to be calculated based on the number of qualifying days.
For example, if an employee has five qualifying days in a week and the applicable weekly SSP is £123.25:
£123.25 ÷ 5 = £24.65 per qualifying day
If the employee is sick for three qualifying days:
£24.65 × 3 = £73.95 SSP
HMRC provides different daily rates depending on the number of qualifying days in the employee's working week. (GOV.UK)
Zoho Payroll handles these calculations as part of the payroll process, reducing the need to work out daily SSP manually.
How Zoho Payroll tracks SSP
Calculating SSP is only one part of the process. Payroll teams also need to keep track of how sickness absence affects an employee's pay.
Zoho Payroll connects the recorded absence with the employee's payroll calculation so that SSP can be reflected in the relevant pay run.
This helps payroll teams:
Record sickness periods
Calculate the applicable SSP
Include SSP in the employee's payroll
Reflect the payment on the payslip
Maintain payroll records for reference
Avoid repeating manual calculations for each pay period
Instead of maintaining separate spreadsheets to calculate sick pay, payroll teams can manage the process within their payroll workflow.
Handling the 2026 SSP changes
The changes introduced on 6 April 2026 make accurate payroll configuration even more important.
Previously, SSP generally depended on the employee meeting the Lower Earnings Limit and was not normally paid for the first three qualifying days.
For sickness absences beginning on or after 6 April 2026:
The Lower Earnings Limit no longer applies to SSP eligibility.
SSP is payable from the first full day of sickness absence.
The weekly rate is the lower of £123.25 or 80% of average weekly earnings.
This means employers need payroll processes that reflect the rules applicable to the date the sickness absence began.
Absences that started before 6 April 2026 can require different treatment, particularly where the absence continues across the change in legislation. HMRC has provided specific transitional guidance for these cases.
What happens when SSP is included in payroll?
Once SSP is calculated, it becomes part of the employee's payroll calculation for the relevant pay period.
The employee's salary is adjusted to account for the sickness absence, and the applicable SSP is included in their pay.
This gives the employee a clear view of how their sickness absence has affected their earnings when they receive their payslip.
For payroll administrators, it also means that SSP does not have to be calculated separately and then manually added to the pay run.
Why automate SSP calculations?
Sick pay can become difficult to manage when payroll teams have to calculate each absence manually.
Common challenges include:
Different employee working patterns
Part-week sickness absences
Changes in SSP rules
Absences that cross tax years or rule changes
Calculating the correct daily amount
Keeping sickness records aligned with payroll
Checking that SSP appears correctly in the pay run
Automating these calculations helps reduce repetitive work and gives payroll teams a consistent process for handling statutory sick pay.
Keep the data connected
Sickness absence starts as an employee event, but its impact extends into payroll.
When absence data and payroll calculations are handled separately, payroll teams may need to manually transfer information between systems. This creates additional work and increases the possibility of missed or incorrect payroll inputs.
With an integrated payroll workflow, sickness information can feed into the calculation process, helping ensure that the employee's pay reflects the recorded absence.
This is particularly useful for businesses managing multiple employees and recurring sickness absences.
Conclusion
SSP is one of those payroll components where a small calculation can have a direct impact on an employee's pay.
With the 2026/27 SSP rules, employers need to account for the removal of the Lower Earnings Limit, the removal of waiting days, and the new weekly calculation of 80% of average weekly earnings or £123.25, whichever is lower.
Automating the process can help payroll teams spend less time calculating sick pay manually and more time managing payroll effectively.
FAQs
What is Statutory Sick Pay?
Statutory Sick Pay (SSP) is the statutory payment employers provide to eligible employees who are off work due to sickness.
What is the SSP rate for 2026/27?
For 2026/27, SSP is paid at the lower of 80% of the employee's average weekly earnings or £123.25 per week.
When is SSP paid from?
For sickness absences beginning on or after 6 April 2026, SSP is payable from the first full day of sickness absence.
Does an employee need to earn a minimum amount to qualify for SSP?
No. From 6 April 2026, the Lower Earnings Limit no longer applies when determining SSP entitlement. Eligible employees can receive SSP regardless of their earnings.
How is SSP calculated for part of a week?
The applicable weekly SSP amount is divided by the number of qualifying days in the employee's week and multiplied by the number of qualifying days they were sick.
Can employers recover SSP from HMRC?
No. Employers cannot currently recover SSP payments from HMRC.
Can Zoho Payroll calculate SSP automatically?
Zoho Payroll can incorporate statutory sick pay into the payroll calculation based on the employee's recorded sickness absence and applicable payroll rules, helping reduce manual SSP calculations.