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HMRC internal manual

Statutory Payments Manual

From
HM Revenue & Customs
Updated
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Average Weekly Earnings (AWE) - SSP: earnings used to determine entitlement

Employees are only paid SSP if their AWE in the relevant period immediately before the start of the PIW or series of linked PIWs are above the LEL.

When calculating an employee’s AWE, all earnings paid in the relevant period must be included even if they relate to periods outside the relevant period, for example, holiday pay which is paid on a pay day in the relevant period but is for a past or forward period. If, on any pay day, the employee was not due any pay, blank weeks are included as zero pay.

If incorrect earnings have been paid, which would produce a situation that worked to the disadvantage of either the employer or employee, and there is documentary evidence of an agreement between both parties as to the actual earnings that should have been paid, you should use the earnings agreed to calculate an employee’s AWE. Where there is no evidence of an agreement, you should calculate the AWE using the earnings actually paid.

For mistimed payments see SPM170900.

When calculating the AWE for directors’, see SPM170800 

Earnings for SSP purposes are defined by regulation 17(2) of the Statutory Sick Pay (General) Regulations 1982 as:

“any remuneration or profit derived from employment”, except where specifically excluded by regulations.

Any payments which are liable for Class 1 NICs, or would be if they were high enough are included.

Payments not included in earnings

The following earnings or payments are not included when calculating earnings for SSP purposes.

  • earnings which attract Class 1A NICs, paid on company benefits such as cars
  • earnings which attract Class 1B NICs, paid on PAYE Settlement Agreements
  • Tax Credits