Accountants Sick Pay (Hourly) Formula
Learn how to estimate gross contractual sick pay for hourly-paid staff using paid hours, hourly rate, and a sick pay percentage.
This formula estimates the gross contractual sick pay for an hourly-paid employee during a sickness absence. It first removes unpaid sick hours, then applies the employee's normal hourly rate and the applicable paid sick leave percentage.
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Estimated Gross Sick Pay
Where:
Remove unpaid hours from the total sickness absence, value the remaining eligible hours at the normal hourly rate, and apply the percentage of pay due under the sick leave policy.
Variables Explained
| Variable | What It Means | Unit |
|---|---|---|
| hourlyRate - Hourly pay rate | The employee's normal gross hourly rate before deductions. | currency |
| sickHours - Total sick leave hours | Scheduled working hours missed because of sickness in the pay period. | hours |
| unpaidSickHours - Unpaid sick hours | Sick hours excluded from paid sick leave, such as waiting-period hours or hours outside entitlement. | hours |
| sickPayPercent - Paid sick leave rate | The percentage of normal pay due for eligible sick hours. | percent |
Step-by-Step Calculation
Record total sick hours
Start with the scheduled working hours missed due to sickness in the relevant pay period.
sickHours
Remove unpaid sick hours
Only hours remaining after unpaid hours are removed are included in the paid sick leave estimate.
eligibleSickHours = max(0, sickHours - unpaidSickHours)
Value eligible hours at full rate
This gives the normal gross value of the eligible sick hours before applying a reduced sick pay rate.
fullPayForEligibleHours = hourlyRate * eligibleSickHours
Apply the paid sick leave percentage
Multiply the full-rate value by the policy percentage, such as 1.00 for 100% or 0.80 for 80%.
sickPayDue = fullPayForEligibleHours * (sickPayPercent / 100)
Compare with normal pay for all sick hours
This shows the gross reduction from paying every recorded sick hour at the normal hourly rate.
payDifference = max(0, (hourlyRate * sickHours) - sickPayDue)
Worked example: 16 sick hours paid at 80%
Eligible paid sick hours
max(0, 16 - 0)
16 hours
Full-rate value of eligible hours
£20.00 × 16
£320.00
Apply the sick pay percentage
£320.00 × (80 ÷ 100)
£256.00
Normal value of all sick hours
£20.00 × 16
£320.00
Difference from normal pay
max(0, £320.00 - £256.00)
£64.00
Final Result
Estimated gross sick pay is £256.00 before deductions, with a £64.00 difference from normal pay for the 16 sick hours.
Assumptions
- ✓The entered hourly rate is the normal gross rate applicable to the sick hours.
- ✓The entered percentage and unpaid hours accurately reflect the relevant employment policy or payroll instruction.
- ✓All eligible hours are paid at one hourly rate and one sick pay percentage.
- ✓The result is calculated before tax, payroll deductions, pension contributions, and other adjustments.
Limitations
- !The calculation does not determine whether the employee qualifies for contractual or statutory sick pay.
- !It does not apply country-specific rules, qualifying-day tests, waiting periods, entitlement caps, or linked absence rules automatically.
- !It does not account for overtime rates, shift premiums, commissions, bonuses, salary sacrifice, or averaging arrangements.
- !Payroll system rounding and pay-period cut-off rules can produce a different processed amount.
Common Mistakes to Avoid
Entering calendar hours rather than scheduled working hours missed through sickness.
Including unpaid waiting-period hours in both total sick hours and paid eligible hours without entering them as unpaid.
Entering 0.8 instead of 80 for an 80% sick pay rate.
Using a net hourly rate instead of the employee's gross hourly rate.
Assuming the estimate confirms statutory entitlement or replaces a contract and payroll review.
Related Formulas
Frequently Asked Questions
What is the hourly sick pay formula?
Estimated gross sick pay equals the hourly rate multiplied by eligible paid sick hours and the paid sick leave percentage divided by 100.
How are eligible paid sick hours calculated?
Eligible paid sick hours equal total sick leave hours minus unpaid sick hours, with the result not allowed to fall below zero.
How do I calculate sick pay at 80%?
Multiply the value of eligible sick hours at the normal hourly rate by 0.80, or enter 80 as the paid sick leave rate.
Does unpaid sick leave reduce the estimate?
Yes. Unpaid sick hours are removed before the paid sick leave percentage is applied.
Is hourly sick pay calculated before tax?
This calculation estimates gross pay before tax, social contributions, pension deductions, and other payroll adjustments.
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