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HMRC internal manual

PAYE Manual

PAYE operation: payments for PAYE purposes: sick pay

The Employment Income (EIM) Manual gives full instructions on Sick Pay.

Advice for Employer sections is contained in subject ‘SICK Pay Scheme’ PAYE20150.

Third party pays sick pay

A third party, such as an insurance company, may pay sick pay.

Where a third party pays sick pay, Statutory Sick Pay (SSP) is chargeable to tax as PAYE income. The third party employer should operate PAYE in the same way as on wages or salaries.