How Does Statutory Sick Pay Work When You’re Self-Employed?

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Unfortunately, no matter how careful you are with your health, it’s likely that you’ll become ill and unable to work at some point. If you’re employed, the course of action is simple: inform your employer and receive Statutory Sick Pay. However, if you’re self-employed, it’s not that easy. First, let’s look at the type of business you’re running and whether that could influence whether you’re entitled to SSP.

Directors of limited companies

If the company employs you, whether that’s as an employee or a director, you’re entitled to SSP. To qualify for SSP, you must:

  • Have been ill for at least four days in a row
  • Earn an average of at least the Lower Earnings Limit of £123 per week*

The amount of SSP paid depends on your employment contract; however, it is at least £109.40 per week*. If you’re not receiving a regular income as part of your directorship, there are different rules for calculating the amount of SSP you’re entitled to; for more information about this, check out the GOV.uk guidance.

Sole traders and partners in partnerships

Unfortunately, as a sole trader or partner, you’re not classed as an employee, which means you’re ineligible for SSP. However, you can apply for Employment and Support Allowance (ESA).

Employment and Support Allowance (ESA)

ESA is a fortnightly benefit designed to provide an income if you’re unable to work due to being ill or having a disability that restricts the number of hours you can work. There are five criteria you need to meet before you can claim:

  1. You must be under the state pension age
  2. You must have a disability or other health condition that affects the number of hours you can work
  3. You are not currently claiming SSP through an employer
  4. You are not currently claiming Jobseekers’ Allowance (JSA)
  5. In the last two to three years, you have paid enough National Insurance contributions

To apply for ESA, you’ll need the following information:

  • Your National Insurance Number
  • Your bank/building society account number and sort code
  • Your doctor’s name, address and phone number
  • A fit note (sometimes known as a “sick note” or “statement of fitness to work”) if you’ve not been able to work for more than seven days in a row
  • Details of your income
  • The date your SSP ends if you’re currently claiming it

Can you still work while claiming ESA?

The general rule is you can still work up to 16 hours and earn £152 per week* while claiming ESA. There is also Perimitted Work that you can carry out while claiming ESA, which comes with its own rules and regulations; for more information about Permitted Work, check out the GOV.uk guidance.

Summing up

The rules around taking SSP while self-employed can be complex, so it’s worth seeking legal advice.

However, as a rule of thumb, you can’t claim SSP if you’re classed as a sole trader, and you’ll have to apply for ESA.

But if you’re a director of a limited company, you might still be able to claim SSP.

* Figures correct as of October 2023

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