Many directors or small business owners do not claim statutory sick payments (SSP) even though they are entitled to. By all accounts many directors are under the mistaken impression that they are not entitled to SSP because they own the business.
How is statutory sick pay assessed?
The formula of assessing SSP is strict and often works in the favour of smaller companies. If you are a small business with a small wage bill then it is likely that you will be able to reclaim ay payments made under SSP rules. The rules state that if SSP is more than 13% of national insurance contributions then it can be reclaimed. One of the advantages of outsourcing your payroll is that all of the administration linked to SSP will be taken care off on hence claiming SSP need not be problematic.
How is SSP assessed?
It does not matter whether a director or business owner receives a fee or a salary; they both count under the rules pertaining to SSP. SSP can be used to top up a shortfall in a normal salary. For example if a normal salary were £1,000 per month and a director decided to claim SSP. The normal salary could then be reduced to £800.00 and then be topped up with £200.00 SSP.
The moral of this tale.
Always seek professional help and advice in relation to paying salaries and employee related benefits. Mis-information often results in missing out on benefits that your business could be entitled to.