The alternatives to SSP for company directors
Statutory sick pay is the legal minimum your company must pay you if you are off sick, and executive income protection is a policy your company buys to top that up to something you could actually live on. The one difference between the two is who funds the money: with SSP your own business pays it out of revenue you are no longer generating, and with executive income protection an insurer does.
The short answer
The minimum your company must pay you as an employee of that company when you are too ill to work. It is a flat weekly amount, it is taxable through PAYE, it lasts a maximum of 28 weeks per period of sickness, and your business funds every penny of it.
A policy your limited company owns and pays for on your life and health. If illness or injury stops you working, the insurer pays a monthly benefit to the company once your chosen deferred period has passed, and the company passes it to you through payroll in the normal way.
Where the money comes from and how long it lasts. SSP is a small, short, self-funded floor. Executive income protection is an insured benefit sized against your real earnings, which can run for a set number of years or all the way to your chosen retirement age.
Where the other alternatives fit
Directors looking at this usually have five other options on the table, and it is worth knowing why they tend not to solve the same problem.
- A contractual company sick pay schemePays more than SSP but is still funded by your own business, so it moves the cost rather than removing it.
- Personal income protectionWorks, and is the right answer for sole traders, but insurers typically assess PAYE salary and often give little or no credit for dividends, so a director on a £12,570 salary can end up with cover that bears no relation to their actual income.
- Group income protectionUsually aimed at larger payrolls and often impractical for a company with one or two people on it.
- Critical illness coverPays a lump sum on diagnosis of a defined condition, which is useful but does not respond to the far broader category of being signed off unable to work.
- Building a cash reserve in the businessSensible in any case, but it is the option that costs the most to get right.
Which is right for you?
- Your household could run for six months or more on your partner’s income alone
- The company holds enough cash to keep paying you properly through a long absence without putting the business at risk
- Your business genuinely trades without you, because the team delivers and sells rather than you personally
- You are within a few years of drawing your pension and could bring that forward if you had to
- Your outgoings are low, with no mortgage and no dependants
- Your health history means underwriting terms would be restrictive enough to change the value of cover, in which case an adviser can tell you what is actually available before you decide
- You are the main or only earner and the household budget assumes your income keeps arriving
- You take a small salary and large dividends, so a personal policy would only recognise a fraction of what you actually live on
- Your company has a mortgage, lease, loan or staff wages that carry on regardless of whether you are working
- Your savings would cover a couple of months of bills rather than a couple of years
- Your work is physical, or involves travel, driving or site work
- You want the cost to sit in the business, where premiums are usually treated as an allowable expense and usually do not create a P11D charge for you
Side-by-side comparison
| Comparison | Statutory sick pay | Executive income protection |
|---|---|---|
| Who funds it | Your own company, out of its own money. | An insurer, in return for premiums the company pays.An insurer carries it |
| Cost to arrange | Nothing, it is a legal obligation already in place.Nothing to pay | An ongoing monthly premium based on age, health and occupation. |
| Health questions | None, entitlement does not depend on your medical history.No health questions | Medical underwriting, and terms or exclusions may apply. |
| Amount for 2026/27 | £123.25 a week, or 80 per cent of average weekly earnings if lower. | Usually up to around 60 to 70 per cent of total remuneration, subject to insurer limits.Sized against real earnings |
| Does it recognise dividends | No, dividends are not earnings for SSP purposes. | Yes, salary, dividends and P11D benefits can usually be included.Dividends can count |
| Employer NI and pension contributions | Not covered. | Can usually be added at extra cost, subject to insurer caps.Can be included |
| When payment starts | Day one of absence under the rules from 6 April 2026.Pays from day one | After your chosen deferred period, commonly 4, 13 or 26 weeks. |
| How long it lasts | Maximum 28 weeks per period of sickness. | A fixed payment term such as 2 or 5 years, or through to policy end.Lasts years, not weeks |
| Can the cost be recovered | No, SSP cannot be reclaimed from HMRC. | Premiums are usually an allowable business expense, subject to HMRC’s wholly and exclusively test.Premiums usually deductible |
| Tax on what you receive | Taxable through PAYE like salary.The same either way | Taxable through PAYE like salary once the company pays it on. |
| Benefit in kind | Not applicable. | Usually not treated as a P11D benefit for the director. |
| Admin burden | Payroll records, qualifying days and SSP calculations. | Application and underwriting up front, then very little.Set up once |
| Who it suits | Directors with strong reserves, short expected absences or a second household income. | Directors who are the main earner with limited reserves. |
The highlighted cells show where one option has the edge on that row. Executive income protection takes more of them because it is an insured benefit rather than a statutory minimum, but SSP wins outright on the three that often matter most: it costs nothing to arrange, it asks no health questions, and it pays from day one. The Percentage Threshold Scheme that once let employers recover SSP was abolished in 2014, and the temporary coronavirus rebate scheme closed in March 2022, so there is currently no route to reclaim it. Small Employers’ Relief, which for 2026/27 reimburses eligible employers at 109 per cent of certain statutory payments, specifically excludes SSP. Tax treatment depends on your circumstances and on legislation, both of which can change. Allowability of premiums is not automatic and can be a matter for your local HMRC inspector, so ask your accountant to confirm the position in writing. Cover is subject to underwriting and acceptance.
Real-world scenarios
The examples below are illustrative only. They are not quotes, recommendations or predictions of cost or outcome. Actual premiums and payouts depend on your age, health, occupation, cover level and the insurer’s terms.
The director whose income is mostly dividends
Sam, 41, is a director of a marketing agency. He takes £12,570 in salary and around £58,000 in dividends, and has a £1,450 monthly mortgage. He is signed off for seven months after surgery.
Read the full scenario
SSP from his own company would give him £123.25 a week, so roughly £534 a month, and the company would be funding it from a pipeline he is no longer working on.
Executive income protection covering 60 to 70 per cent of his £70,570 total remuneration would give a monthly benefit of around £3,529 to £4,117 gross, paid to the company after his chosen deferred period and passed to him through payroll.
- Total remuneration£70,570
- SSP a monthAround £534
- Insured benefit a month£3,529 to £4,117
The director who is off for three weeks
Nadia, 52, runs a recruitment firm with six employees and two other directors. The business holds around £140,000 in cash, she has no mortgage, and her consultants generate most of the fee income. She breaks her wrist and is off for three weeks.
Read the full scenario
Any executive income protection policy with a 13 or 26 week deferred period would not have paid a penny here, whereas SSP applies from day one under the rules that took effect on 6 April 2026.
The reserves and the team absorb the rest comfortably.
- AbsenceThree weeks
- Cash reservesAround £140,000
- Deferred periodLonger than the absence
The switch case, the very low salary
Tom, 36, is the sole director of a plumbing company and pays himself £6,500 through payroll on his accountant’s advice, taking the rest in dividends. He assumed a low salary had no downside.
Read the full scenario
Under the reformed rules SSP is paid at the lower of the flat rate or 80 per cent of normal weekly earnings, so his average weekly earnings of £125 mean his SSP works out at £100 a week rather than £123.25.
In practice a very low salary slightly reduces the only sick pay he has, and it also limits what a personal income protection policy would cover him for. Reviewing the salary and dividend split with his accountant is worth doing, but on its own it moves him from £100 a week to £123.25 a week, which is why the conversation usually ends up with insured cover rather than a payroll tweak.
- Salary£6,500
- SSP a week£100
- Best a payroll tweak gets him£123.25
The rule of thumb
SSP is a floor but not a reliable plan.
If 28 weeks at £123.25 a week, roughly £3,451 in total and funded by your own company, would not keep your household and your business going, then the difference between that figure and your real monthly commitments is the gap worth insuring. Figures are for the 2026 to 2027 tax year.
Frequently asked questions
Can a company director claim SSP?
Can income protection cover my dividends as well as my salary?
How much SSP does a company director get in 2026/27?
Can my company claim SSP back from HMRC?
Does executive income protection replace SSP?
How quickly would the money actually start arriving?
Related decision guides
What would your household do from week four?
Speak to a business protection specialist at IGotCover. We will size executive income protection against your total remuneration rather than just your salary, match the deferred period to what your reserves and SSP could realistically cover, and compare our panel of insurers for you. Free, and with no obligation.
Get a Free Quote →Important information: This guide is for general information purposes only and does not constitute financial, legal, or tax advice. Tax treatment depends on individual circumstances and may change in the future. All figures and scenarios are illustrative only and do not represent a guarantee of cover, premium, or payout. Eligibility for cover is subject to insurer underwriting criteria and acceptance. You should seek advice from a qualified financial adviser and, where relevant, a solicitor or tax adviser before taking out any policy or entering into a legal agreement. Insurance provider benefits are subject to change. IGotCover is a trading name of Caspian Assured Ltd, authorised and regulated by the Financial Conduct Authority (FCA reference [FRN]).
