The Relevant Period is a period of time that is long enough to ensure that there is a fair representation of the worker's average earnings.
First, employers must identify the end date of the Relevant Period as this determines when the Relevant Period begins. This is used to calculate SSP for zero hour workers.
The end date of the Relevant Period is the last normal payday before the first complete day of sickness.
To work out the start date of the Relevant Period, employers must select a date no less than 8 weeks before the end date. The start date is the day after the last normal payday, with that payday being at least 8 weeks prior to the end date. The Relevant Period must also be a full pay period.
For example, If your worker's first full day of sickness is 21st January 2017, the RP for a monthly or weekly salary will be:
|Salary payment frequency||
Last payday before the first day of sickness
|RP start date
(the day after the last payday at least 8 weeks before)
|RP||Calculation for average weekly earnings (AWE)|
(eg every Friday)
13 January 2017
|18 November 2016||19 November 2016 to 13 January 2017||Total earnings for RP / 8 weeks = AWE|
(eg last day of the month)
31 December 2016
|31 October 2016||1 November 2016 to 31 December 2016||Total earnings for RP / number of months in the year / number of weeks in the year = AWE
(Total earnings for RP / 2 x 12 / 52 = AWE)
If the AWE is over the threshold, the employer will need to provide SSP. If the AWE does not reach the threshold, then the employer will not have to pay SSP.
- John has worked for Steve for 2 years on a zero hours contract paid weekly on a Thursday
- John falls ill on 27 November 2017, and notifies Steve on the same day
Before Steve agrees to make any SSP payment to John, he needs to check that John's average weekly earnings meet the threshold. The first step is to identify the relevant period:
- Because John's first day of sickness is a Monday, the last day of the relevant period is the last pay day being Thursday 23 November 2017
- The start of the relevant period is the day after the payday at least 8 weeks before the last pay date being 29 September 2017
- Therefore, the relevant period is 29 September to 23 November
Now that Steve knows the relevant period, he needs to calculate John's average weekly earnings. Steven knows that John was paid £1,050 for hours worked in the relevant period. To calculate John's AWE, Steve must divide £1,050 by 8 weeks:
£1,050 / 8 = £131.25
Therefore, Johns AWE is £131.25 which is above the threshold, so Steve is required to pay SSP.
- Karen has worked for Matt for 6 months on a zero hours contract paid monthly on the 15th day of the month
- Karen falls ill on 20 November 2017, and notifies Matt on the same day
To check that Karen's average weekly earnings meet the threshold, Matt needs to identify the relevant period:
- The last day of the relevant period is 15 November 2017 (the last payday prior to falling ill)
- The start of the relevant period is 16 September 2017 (the day after the payday at least 8 weeks prior to the last payday)
- Therefore, the relevant period is 16 September to 15 November.
Now that Matt knows the relevant period, he needs to calculate Karen's average weekly earnings. Karen was paid £850 for hours worked in the relevant period. To calculate Karen's AWE, Matt must divide £850 by the number of months in the relevant period (2 months), multiply that number by 12 to find the annual earnings, and then divide that amount by the number of weeks in a year (52 weeks):
£850 / 2 = £425
£425 x 12 = £5,100
£5,100 / 52 = £98.08
Therefore, Karen's AWE is £98.08 which is below the threshold, so there is no entitlement to SSP.
Workers who have not had 8 weeks of earnings yet
Workers who fall ill prior to 8 weeks of continuous service may still be entitled to SSP. Employers will need to calculate their AWE in the same way as above, but the relevant period will be the total amount of employment prior to the first day of sickness.
|Period of employment pre-sickness||
|Calculation of average weekly earnings (AWE)|
|Exact number of weeks
(eg 5 weeks pay prior to sickness)
|Total earnings / number of months = AWE|
|Incomplete number of weeks
(eg 2 weeks and 3 days prior to sickness)
|Total earnings / number of days worked x days in a calendar week = AWE
(Total earnings / 17 x 7 = AWE)
- Charley has been working for Lindsay for 3 weeks and 3 days on a zero hour contract paid weekly on a Wednesday
- Charley falls ill on 21 November 2017, and notifies Lindsay on the same day
Because Charley has not been working for 8 weeks, the relevant period will be 24 days. The calculation of days will always be 7 days per week regardless of the actual number of days worked. Charley is going to be paid £365 for the days she has worked.
Therefore, Charley's AWE is the total amount of earnings divided by the total number of days worked, multiplied by 7:
£365 / 21 = £17.38
£17.38 x 7 = £121.66
Therefore, Charley's AWE is £121.66 which is above the threshold, meaning she will be entitled to SSP.