PAYE72070 | PAYE operation: payments for PAYE purposes: sick pay and when third party pays sick pay

The Employment Income (EIM) Manual gives full instructions on Sick Pay.

Third party pays sick pay

A third party, such as an insurance company, may pay sick pay.

Where a third party pays sick pay, Statutory Sick Pay (SSP) is chargeable to tax as PAYE income. The third party employer should operate PAYE in the same way as on wages or salaries.