The Contractor Sick Pay Guide

One major benefit of working through an umbrella company for contractors is that it allows them to receive statutory benefits. This means that umbrella contractors are entitled to holiday pay, maternity or paternity pay, and sick pay.

For example, should you fall ill or be unwell, you will still receive pay even if you can't work on the contract at hand.

Working as a contractor with an umbrella company has several advantages, including statutory holiday, paternity and sick pay. This Compare Your Pay guide to statutory sick pay (SSP) for umbrella contractors provides information on eligibility, payment rates and claim procedures. Read on to find out more.

Required Sick Pay – Who’s In?

Not all contractors qualify for Statutory Sick Pay. Workers who work through an umbrella company are employees of that company, therefore they are entitled to SSP if they become sick and cannot work. Contractors, on the other hand, whose business is conducted through their limited liability corporations are not employees and are thus not eligible for SSP. 

How Much Sick Pay Do Umbrella Contractors Make?

From the tax year 2024/25, SSP is £116.75 a week. Some umbrellas might have other sick pay programs as well, so make sure you ask your provider if they have any additional options. 

How Long Does Statutory Sick Pay Last?

It's worth noting that statutory sick pay doesn't last forever. SSP is offered for up to 28 weeks a year.

How to Receive Statutory Sick Pay?

Umbrella contractors that qualify for SSP must meet the following requirements:

- Employment Status: You should be employed by the umbrella company.

- Fees: You need to earn at least £123 per week (pre-tax, plus National Insurance).

-Severity of Illness: You should have been sick at least four consecutive days, not including vacation days. SSP pays for "qualifying" days, which are the days you would normally work.

- Exclusions: You will not be receiving statutory maternity or paternity pay and you will not have reached your 28-week SSP threshold. 

Sick Pay Claim: What Should You Get?

Tell your umbrella company of your condition within their designated time frame, typically seven days. If you’re sick longer than seven days, you might have to submit a fit note (formerly a sick note) from a doctor.

Other Legal Rights for Umbrella Contractors

Holiday Pay  

One of the advantages of working through an umbrella company is that umbrella contractors receive payment while on leave.

This is excellent news for contractors who deserve a well-earned break but do not want to pay for it out of their own pockets.

Similar to other UK employees, full-time umbrella contractors are entitled to 5.6 weeks of paid holiday annually.

For part-time contractors, the holiday entitlement is as follows:

- 22.4 days for those working four days per week

- 16.8 days for those working three days per week

Contractor holiday pay is calculated based on your basic pay, which is the amount you receive from the umbrella company, not the hourly rate you charge your client.

For contractors with varying hours or workdays, holiday pay will be computed using the average hours worked over the 12 weeks preceding the holiday.

Maternity and Paternity Leave  

Contractors are entitled to certain statutory benefits, including maternity leave.

Umbrella contractors can receive 90% of their average weekly pay for the first six weeks of maternity leave. After this period, they will receive either 90% of their average weekly pay or £156.66, whichever amount is lower, for the next 33 weeks. If your pay varies from contract to contract, your maternity leave pay will be calculated based on your average pay from the previous eight weeks.

Statutory maternity leave is paid in the same manner as your salary, either monthly or weekly, with tax and National Insurance contributions deducted accordingly.

To qualify for paid maternity leave, contractors must start their leave no earlier than 11 weeks before their due date.

In addition to maternity leave, umbrella contractors are also eligible for paid paternity leave.

Statutory paternity leave is available to contractors following the birth of their child. They are entitled to take one to two weeks of paid leave, which is again calculated as 90% of their pay or £156.66, whichever is lower.