Can self-employed people get sick pay? A guide for sole traders

If you’re self-employed, taking time off work because you’re ill can be stressful. Unlike employees, you won’t automatically receive statutory sick pay if you’re unable to work.

But that doesn’t necessarily mean you’re without support.

The help available depends on how your business is set up. If you’re a sole trader or in a partnership, there are benefits and insurance options that may help replace some of your income while you’re off work. If you’re a limited company director, you may be able to claim Statutory Sick Pay through your company.

In this guide, we’ll explain how self-employed sick pay works, whether you can claim statutory sick pay and what support may be available if illness prevents you from working.

In this guide:

• What is statutory sick pay?
• Are self-employed people able to get sick pay?
  What are my options?

Statutory Sick Pay (SSP) is the minimum amount employers can pay eligible employees who are unable to work because of illness.

If you’re employed and meet the eligibility requirements, your employer can pay SSP for a period of sickness. Some employers also offer enhanced sick pay schemes that provide additional support on top of the statutory amount.

However, self-employed and statutory sick pay don’t usually go hand in hand. Whether you’re eligible depends on how your business is structured.

The short answer is: sometimes.

Whether you can claim sick pay depends on whether you’re operating through a limited company or working as a sole trader.

As you can see, being self-employed and Statutory Sick Pay don’t usually go together unless you’re operating through a limited company and paying yourself through PAYE.

Let’s look at an example:

Let’s say Sarah is a freelance graphic designer operating as a sole trader. She develops a health condition that prevents her from working for several months.

Because she’s self-employed, she can’t claim Statutory Sick Pay in the same way an employee can. Instead, she checks whether she’s eligible for Employment and Support Allowance (ESA) and Universal Credit to help cover her living costs while she’s unable to work.

If Sarah had income protection insurance in place, she may also be able to make a claim through her insurer. This could provide additional financial support until she’s able to return to work.

While everyone’s circumstances are different, this example highlights why it’s important for sole traders to understand what support may be available before they need it.

Now let’s go into more detail on what you’re entitled to as a limited company or a sole trader.

If you’re a director of a limited company and pay yourself a salary through PAYE, you’re considered an employee of your company.

This means you may be eligible for Statutory Sick Pay if you’re unable to work because of illness and meet the relevant eligibility requirements.

Your company would pay the SSP in the same way it would for any other employee on the payroll.

If you’re a sole trader or business partner, you generally can’t claim Statutory Sick Pay.

This is because SSP is paid by an employer to an employee, and as a sole trader, you’re effectively your own employer.

While sole trader sick pay isn’t available through SSP, there are other forms of financial support that may help if you’re unable to work due to illness.

If you’re looking for sick pay for self-employed workers, there are a few alternatives worth exploring.

The main options include:

• Employment and Support Allowance (ESA)
• Universal Credit
  Income protection insurance

Employment and Support Allowance (ESA) is a government benefit that can provide financial support if a health condition or disability affects your ability to work. Unlike Statutory Sick Pay, ESA isn’t paid by an employer. Instead, it’s paid by the government.

Like with any benefit, you have to meet certain criteria, such as:

• You’re below State Pension age
• You have a health condition or disability that affects your ability to work
• You’re not receiving Statutory Sick Pay from an employer
• You’ve paid or been credited with enough National Insurance contributions

Your eligibility will depend on your individual circumstances.

New Style ESA is the version most relevant to many self-employed people.

Eligibility is largely based on your National Insurance contribution record. If you’ve worked as an employee in the past or paid National Insurance as a self-employed person, you may qualify. It’s worth checking your National Insurance record to make sure your contributions are up to date.

To apply, you’ll usually need:

• Details about your health condition
• A fit note from your doctor
• Proof of identity
  Information about any income, pensions or insurance payments you receive

Applications can be made online here.

The amount you receive depends on your circumstances, including your age and how your condition affects your ability to work.

Rates can change each tax year, so it’s worth checking the latest information before applying.

In some cases, yes. You may be able to carry out a limited amount of work while receiving ESA, provided you stay within the permitted work rules set by the government.

Universal Credit may be available if illness affects your ability to work and your income falls as a result. It’s a monthly payment designed to help with living costs and can be claimed by people who are self-employed, unemployed, or unable to work because of illness.

When applying, you’ll need to explain how your condition affects your ability to work. You may be asked to complete a Work Capability Assessment, which helps determine what support you’re entitled to.

Depending on the outcome, you could receive additional support through your Universal Credit payments.

If you’re unsure whether ESA or Universal Credit is more appropriate, it’s worth reviewing both options before making a claim.

Many self-employed people choose to take out insurance to protect their income if they’re unable to work.

Common options include:

Income protection insurance
Provides regular payments if you’re unable to work because of illness or injury.

Critical illness cover
Pays a lump sum if you’re diagnosed with a serious illness covered by the policy.

Business overhead insurance
Helps cover ongoing business expenses while you’re unable to work.

For many self-employed people, insurance can provide greater financial security than relying solely on government support.

Nobody can foresee becoming unwell, but having a financial safety net can make a difficult situation much easier to manage.

Here are a few ways self-employed people can prepare for an unexpected period away from work:

Having savings set aside can help cover essential expenses if you’re unable to work for a period of time. Many experts recommend keeping at least three to six months’ worth of living expenses in an emergency fund.

Income protection insurance can provide regular payments if illness or injury prevents you from working. While there is a cost involved, it can provide valuable peace of mind for self-employed people whose income depends entirely on their ability to work.

Having a clear picture of your income, expenses and cash flow can make it easier to plan ahead and identify potential financial pressures if your income suddenly drops.

Keeping your business and personal finances separate can help you understand exactly how your business is performing and make it easier to manage your money during periods of uncertainty.

When you’re self-employed, managing your finances can feel like a full-time job in itself.

That’s why it’s important to have systems that help you stay organised, whether you’re working as normal or dealing with unexpected challenges.

Countingup combines a business current account with built-in accounting features to help you manage your business finances in one place. From automatic expense categorisation to invoicing and tax estimates, the app helps reduce admin and save valuable time.

If you’re just getting started, you can learn how to register as a sole trader or explore our free company registration service if you’re planning to set up a limited company.

Most self-employed people can’t claim Statutory Sick Pay. If you’re a sole trader, you may be able to access support through Employment and Support Allowance (ESA), Universal Credit, or an income protection insurance policy. The right option depends on your circumstances and eligibility.

You can apply for Employment and Support Allowance on the Government’s website. You’ll typically need information about your health condition, proof of identity, and a fit note from your doctor. Eligibility is usually based on your National Insurance contribution record.

The amount you receive depends on your circumstances, including your age and how your illness or disability affects your ability to work. ESA rates are reviewed regularly, so it’s best to check the latest figures.