Statutory Sick Pay vs Occupational Sick Pay
Understanding the difference between Statutory Sick Pay (SSP), which is the minimum entitlement under the Social Security Contributions and Benefits Act 1992, and contractual occupational sick pay (OSP), which employers may offer voluntarily.
Overview
When an employee is off work due to sickness, they are entitled as a minimum to Statutory Sick Pay (SSP) under the Social Security Contributions and Benefits Act 1992 (SSCBA 1992) and the Statutory Sick Pay (General) Regulations 1982 (SI 1982/894), provided they meet the qualifying conditions. Many employers offer more generous contractual sick pay — known as occupational sick pay (OSP) or company sick pay — under the contract of employment or company policy. The two systems operate independently: an employee may receive SSP alone, OSP alone (if the employer's scheme is more generous), or a combination. The key difference is that SSP is a minimum statutory floor — employers cannot contract out of it — whereas OSP is whatever the employer has contractually agreed. SSP is paid at £116.75 per week for 2025–26.
Side-by-Side Comparison
Statutory Sick Pay (SSP)
Pros
- A statutory minimum — employees are entitled to it regardless of their contract or how long they have worked for the employer
- Paid by the employer for up to 28 weeks — provides a basic income floor during sickness
- Employer cannot lawfully withhold SSP once qualifying conditions are met (SSCBA 1992 s.151)
- Available from day 4 of incapacity — the first 3 days (waiting days) are unpaid unless the employer agrees otherwise
Cons
- Low flat rate — £116.75/week (2025–26) is significantly below most employees' actual earnings
- Maximum 28 weeks — after this, the employee may need to claim Employment and Support Allowance or Universal Credit
- Three 'waiting days' are unpaid (unless OSP covers them)
- Employer-paid — in theory the employer bears the cost with no HMRC rebate since 2014
Best For
All eligible employees as a safety net — particularly those whose employer offers no OSP scheme, agency workers, and those on low pay.
Occupational Sick Pay (OSP) / Company Sick Pay
Pros
- Can be significantly more generous than SSP — e.g. full pay for 3 months, then half pay for 3 months is a common public sector structure
- Employer can tailor the scheme to its workforce — different entitlements by length of service, role, or absence record
- Provides financial security for longer absences — reduces the gap between normal pay and the SSP flat rate
- Can include enhanced waiting day payments — removing the 3-day SSP qualifying gap
Cons
- No universal entitlement — many employers, particularly in lower-paid sectors, offer SSP only
- Subject to employer conditions — failure to follow sick reporting procedures or attend Occupational Health may result in OSP being withheld
- Terms can be varied by the employer (subject to contractual rights) — not as secure as the statutory SSP entitlement
- OSP may be reduced or withdrawn for repeated short-term absences, depending on the scheme's absence management provisions
Best For
Employees with longer service in established organisations — particularly public sector, financial services, and large private employers — whose contracts provide enhanced sick pay.
Key Differences
Our Recommendation
Employees should check their contract of employment and staff handbook carefully to understand whether their employer offers OSP above SSP. If your employer offers SSP only and you have been off sick for more than 28 weeks, claim Employment and Support Allowance (or the equivalent Universal Credit equivalent). If you believe your employer has withheld SSP to which you are entitled, you can dispute this with HMRC (who administer SSP entitlement) or raise a formal grievance. Employers should ensure their OSP policy is clearly documented in the contract — vague or informal sick pay arrangements lead to disputes.