As a contractor, it’s vital to understand what you are entitled to should you become ill or injured and unable to work. Statutory Sick Pay helps to provide you with some guaranteed income while you recover, giving you financial stability.
The different types of sick pay available to contractors depends on their engagement method—whether through a limited company, agency payroll or an umbrella company. This free guide will help explain how statutory sick pay works, assess the eligibility criteria, and the variations in sick pay in different scenarios.
What is Statutory Sick Pay (SSP)
Statutory Sick Pay, also known as SSP, is a mandatory payment for eligible workers who are unable to work for more than three consecutive days due to illness or injury. As of April 2026, the SSP rate is £123.25 per week, and this will be paid for up to 28 weeks.
Workers must be classed as an employee and have done some work for the employer, however waiting days and the lower earnings limit have now been removed. This means there is no minimum amount workers must earn in order to qualify, and SSP starts from the first full day of sickness absence.
You must usually tell your employer you’re unable to work before the deadline they set (or within 7 days if they have not set one).
Image: What is Statutory Sick Pay (SSP)? A simple guide to employee sick pay rights in the UK.
Sick Pay for Limited Company Directors
If you are contracting outside IR35 as a director of your own limited company, you may be treated as an employee of your company for SSP purposes if you are paid through payroll/PAYE and have done some work for the company. Since 6 April 2026, there is no longer a minimum earnings threshold for SSP eligibility. However, the amount you receive may be affected by your salary, as SSP is paid at the lower of the flat weekly rate or 80% of your average weekly earnings. Your limited company remains responsible for processing and funding any eligible SSP through payroll and keeping accurate records.
Sick Pay for Agency Employees
You are eligible for SSP if you are classified as an ’employee’ of the agency. To receive SSP from your agency, you must meet the full eligibility criteria, including the minimum weekly pay and the required number of days unable to work. The agency is responsible for processing SSP and adhering to their own reporting rules. A downside to being employed by an agency, rather than an Umbrella Company, is that agencies typically do not offer enhanced sick pay.
Sick Pay for Umbrella Company Employees
As an umbrella company employee, you are considered a full employee of the umbrella company. This means that if you qualify for Statutory Sick Pay, you will receive the full statutory amount. In some cases, you may also be eligible for enhanced sick pay. Opting for sick pay through an umbrella company, rather than agency payroll or a limited company, often provides structured HR support, a clear process, and quicker payments.
| Limited Company Director | Agency Payroll | Umbrella Company |
SSP Eligible | Sometimes (depends on salary) | Yes | Yes |
Enhanced Sick Pay | No | Rare | Often possible |
Who Processes Pay | You | Agency | Umbrella company |
Admin Burden | High | Low | Low |
Support/HR Guidance | None | Basic | Full support |
Benefits of Umbrella Company Sick Pay
If you meet the criteria, being an umbrella employee guarantees you Statutory Sick Pay. Your umbrella company handles all the administrative tasks, ensuring you have no paperwork to worry about. During your time off work, you will have continuous access to HR guidance.
With Danbro Umbrella, our dedicated customer experience team will regularly check in to see how you’re doing and offer any additional support to help you get back on your feet.
If you’re looking for full HR support, full statutory employment rights, plus extra benefits all included as standard, then join Danbro Umbrella today!
