When an employee is off sick, the business may continue paying them through payroll while also managing reduced productivity, replacement costs, and cash-flow pressure. Many employers assume HMRC will reimburse some or all of that payment, leading to a common question: can employers claim back Statutory Sick Pay?
The short answer is no, employers cannot currently reclaim ordinary Statutory Sick Pay (SSP) from HMRC. Unlike some other statutory payments, SSP remains a cost that employers must fund through payroll.
This distinction matters most for smaller businesses. When several employees are absent during the year, SSP can become a noticeable payroll cost, particularly when the business is already covering overtime, temporary workers, or reduced output.
Key Takeaways
- Employers cannot generally claim back SSP from HMRC.
- SSP is paid by employers through normal payroll processes.
- Statutory maternity, paternity, adoption and similar payments can usually be recovered.
- SSP rules changed from April 2026, increasing employer responsibilities.
Can Employers Claim Back SSP From HMRC?
The current position is that employers cannot reclaim Statutory Sick Pay from HMRC. There is no general SSP reimbursement scheme where employers submit SSP payments and receive the money back.
Some employers still expect SSP recovery because previous schemes allowed limited reimbursement in specific circumstances. For example, the former Percentage Threshold Scheme allowed certain employers to recover SSP costs when payments exceeded a set level compared with their National Insurance liability. However, that scheme was removed and is no longer available.
Today, employers should treat SSP as part of their normal payroll cost. The payment is processed alongside wages, with the employer responsible for calculating entitlement, paying the employee, and maintaining supporting records.
(Source: Statutory Sick Pay (SSP): Employer Guide)
Who Pays Statutory Sick Pay?
The employer pays SSP directly to the employee through payroll. It is not paid separately by HMRC and does not operate like a benefit that employees claim from the government.
SSP appears in payroll in the same way as other employee payments. The employer calculates the amount due, includes it in the employee’s pay, and reports the relevant payroll information through normal PAYE processes.
This can create confusion because employers also pay PAYE and National Insurance to HMRC. However, paying HMRC does not mean HMRC reimburses SSP. The employer is simply meeting its statutory payroll obligations.
For businesses with regular payroll cycles, this means sickness absence should be considered alongside other employment costs. A company may need to continue paying SSP while also arranging cover for the absent employee.
Why Can Employers Recover Other Statutory Payments?
A common question is why employers can recover some statutory payments but not SSP.
The difference comes from how the payments are designed. Statutory maternity pay, statutory paternity pay, statutory adoption pay, shared parental pay, parental bereavement pay and neonatal care pay include employer recovery mechanisms through PAYE.
Eligible employers can usually recover a percentage of these payments from HMRC. For 2026/27, employers may recover:
• 92% of qualifying statutory payments where Class 1 National Insurance liability exceeded £45,000 in the previous tax year.
• 109% where Class 1 National Insurance liability was £45,000 or less.
SSP does not fall within this recovery system. The employer remains responsible for the full cost.
This difference is why businesses should not assume that all statutory payments work in the same way. Each payment has separate rules, recovery methods, and payroll treatment.
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What Changed to SSP From April 2026?
SSP rules changed significantly from 6 April 2026. These changes increased access to SSP and removed some previous restrictions.
The main changes include:
• SSP is payable from the first full day of sickness absence.
• The previous three-day waiting period has been removed.
• The Lower Earnings Limit requirement has been removed, meaning more employees can qualify.
• SSP is paid at £123.25 per week or 80% of average weekly earnings, whichever is lower.
For employers, the practical impact is that some sickness absences may create a payroll cost earlier than before. Businesses that previously avoided SSP payments because employees did not meet earnings requirements may now need to review their payroll processes.
Employers should also update sickness policies, payroll software settings, and internal procedures to reflect the new rules.
How Much Can Employee Sickness Cost a Business?
Although SSP is limited compared with normal wages, the wider cost of employee absence can be much higher. Employers may still need to pay SSP while covering lost productivity or arranging additional staffing.
For example, assume an employee qualifies for SSP during a six-week sickness absence in 2026/27.
The SSP rate is £123.25 per week. If the employee receives the full weekly rate for six weeks:
£123.25 × 6 weeks = £739.50
The employer pays £739.50 through payroll and cannot recover that amount from HMRC.
The actual business cost may be higher if the company also pays overtime to colleagues, hires temporary cover, or experiences delays in completing work.
For small businesses, forecasting these costs can be important because sickness payments often arise unexpectedly.
Can Small Employers Claim Back Statutory Sick Pay?
The size of the business does not currently change the general SSP recovery position. A small employer and a large employer both pay SSP themselves.
However, smaller businesses may feel the impact more because they often have fewer employees available to cover absences. One employee being away for several weeks can affect operations, customer service, and cash flow.
While there is no general SSP reimbursement scheme, small employers can still reduce administration issues by having clear sickness procedures, accurate payroll records, and reliable absence tracking.
How Should SSP Be Processed Through Payroll?
SSP should be handled through the normal payroll process. Employers should not treat it as an informal payment or simply adjust wages without supporting records.
Businesses should:
• record the employee’s sickness dates;
• confirm SSP eligibility;
• calculate the correct payment;
• process SSP through payroll;
• keep sickness records and supporting documents;
• report payroll information correctly through PAYE.
HMRC may ask to review records where there is a dispute about SSP payments. Employers should therefore keep enough information to demonstrate how the calculation was reached.
What Happens When SSP Ends?
SSP is normally payable for up to 28 weeks where the employee continues to meet the qualifying conditions. Once SSP entitlement ends, the employer does not continue paying SSP unless another arrangement applies.
When SSP ends, employers may need to issue an SSP1 form. This allows the employee to understand that SSP has stopped and whether they may need to explore other support.
Employers should also consider whether further discussions are needed regarding the employee’s return to work, adjustments, or ongoing absence management.
What Employers Should Take Away
Employers cannot currently claim back Statutory Sick Pay from HMRC. SSP remains a business cost that must be managed through payroll, unlike certain other statutory payments that include recovery mechanisms.
The 2026 changes make accurate payroll processing even more important, particularly for businesses with lower-paid employees or frequent sickness absence. Keeping records updated and reviewing payroll procedures can prevent incorrect payments and unnecessary administration.
Where sickness payments, payroll reporting, or statutory calculations become difficult to manage, payroll support can help ensure employees are paid correctly and compliance obligations are met.
