While many assume sick pay is a flat 80% of their salary, statutory calculation rules based on gross income and variable bonuses can occasionally result in benefits exceeding standard monthly wages.
The Myth of Fixed Benefit Rates
Sick pay is commonly perceived as 80% of a salary or 100% in specific cases like pregnancy. This is a simplification, as benefits are calculated based on the “benefit assessment basis,” not the base salary listed in an employment contract.
The assessment basis is the average monthly remuneration paid during the 12 calendar months preceding the incapacity for work. If an employee has been employed for less than 12 months, the average is calculated based on the full months worked.
Determining the Assessment Basis
Under the Social Insurance Act, the assessment basis reflects the employee’s income subject to social security contributions. This amount is calculated after deducting the 13.71% social insurance contributions paid by the employee.
Because the basis includes all contribution-linked income, it encompasses not just the base salary, but also premiums, bonuses, and annual performance pay. Consequently, an employee with a low base salary but high variable compensation may receive a benefit that exceeds their usual paycheck.
Exclusions from the Calculation
Not all compensation components count toward the benefit basis. For instance, fixed monthly supplements that remain payable even during periods of sickness are excluded. Similarly, components whose eligibility period has expired are not factored into the calculation.
Treatment of Bonuses and Awards
One-off bonuses are attributed to the month for which they were awarded or the month of payment if no period was specified. Monthly, quarterly, and annual components are calculated using specific fractions—such as 1/12 of the total paid over the preceding four quarters or the previous year.
If a component is due but has not yet been paid, employers must use the previous period’s data to calculate the benefit. Once the delayed payment is issued, the employer does not recalculate the sick pay or issue retroactive adjustments.
