Daily Sick Pay Formula
Learn how annual salary, working days and paid sick leave entitlement are used to estimate gross daily sick pay.
This calculator estimates the gross value of contractual paid sick leave by converting annual salary into a daily rate and applying that rate only to eligible sick days. It helps with an initial payroll estimate, but contract terms and local statutory arrangements can produce different outcomes.
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Estimated Gross Sick Pay
Where:
First, divide annual gross salary by the selected number of working days to get a gross daily rate. Then multiply that rate by the lower of the days absent and the paid sick leave allowance.
Variables Explained
| Variable | What It Means | Unit |
|---|---|---|
| annualSalary - Annual gross salary | The employee's gross annual salary before tax, pension, salary sacrifice and other deductions. | currency |
| workingDaysPerYear - Working days per year | The paid working-day divisor used to convert annual salary into a daily rate. | days |
| sickDaysTaken - Sick days taken | The number of working days of sickness absence in the period being reviewed. | days |
| paidSickLeaveDays - Paid sick leave entitlement | The number of sick days that are payable at the normal daily rate under the entered policy or contract. | days |
Step-by-Step Calculation
Calculate the daily salary rate
Convert annual gross salary into an estimated gross value for one working day.
dailySickPayRate = annualSalary / workingDaysPerYear
Identify eligible paid sick days
Only the lower of the absence taken and the paid entitlement is included at the normal daily rate.
paidSickDays = min(sickDaysTaken, paidSickLeaveDays)
Calculate gross sick pay
Multiply the estimated daily rate by the eligible paid sick days.
grossSickPay = dailySickPayRate * paidSickDays
Identify days outside the allowance
Show any absence days that exceed the entered paid entitlement. Their treatment may differ under the relevant arrangements.
unpaidSickDays = max(sickDaysTaken - paidSickLeaveDays, 0)
Example: Five sick days within a 10-day entitlement
Calculate daily sick pay rate
£45,000 ÷ 260
£173.08 per working day
Calculate eligible paid sick days
min(5, 10)
5 paid days
Calculate gross sick pay
£173.08 × 5
£865.38
Calculate days outside entitlement
max(5 - 10, 0)
0 days
Final Result
Estimated gross sick pay is £865.38 before deductions, based on a daily rate of £173.08 for 5 paid sick days.
Assumptions
- ✓Annual salary is divided by the entered working-days figure, rather than a monthly, hourly or average-pay method.
- ✓Eligible sick days are paid at the employee's normal estimated gross daily rate.
- ✓Only days within the entered paid sick leave entitlement are included in gross sick pay.
- ✓The result is before income tax, social insurance, pension contributions, salary sacrifice and other payroll deductions.
Limitations
- !Employment contracts may define daily pay using a different divisor, pay period or reference period.
- !Statutory sick pay, waiting days, qualifying conditions and local rules are not included.
- !Some policies provide tiered sick pay, such as full pay followed by half pay, which this calculation does not model.
- !Variable pay, overtime, commission, allowances and shift premiums may affect actual sick pay.
- !Payroll rounding and pay-period cut-off dates can change the amount processed.
Common Mistakes to Avoid
Using calendar days instead of working days for sickness absence.
Entering a 260-day divisor when the employer's payroll method uses another annual working-days figure.
Entering annual salary after deductions instead of gross annual salary.
Treating days above the paid entitlement as automatically unpaid without checking the applicable arrangements.
Including holidays or non-working days in sick days taken when they are not counted by the relevant policy.
Related Formulas
Frequently Asked Questions
What is the formula for daily sick pay?
This calculator uses annual gross salary divided by working days per year, multiplied by the lower of sick days taken and paid sick leave entitlement.
How do I calculate gross sick pay for five days?
Calculate the daily rate by dividing annual salary by working days per year, then multiply it by five if all five days are within the paid entitlement.
Why does the formula use min for paid sick days?
The min function prevents the calculation from paying more days than the employee has taken or more days than the entered paid allowance.
What does sick days outside entitlement mean?
It is the portion of sickness absence above the entered paid allowance. Those days may be unpaid or handled differently depending on the relevant policy and rules.
Should annual leave be removed from 260 working days?
Use the divisor applied by the relevant payroll method or contract. This calculator does not determine whether holiday days should be excluded.
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