Sick leave and income compensation: who pays for the first days

When an employee falls ill, the question arises of who pays them for the period of sick leave (PN). The answer is not straightforward – the first days of sick leave are covered by the employer in the form of income compensation, and only after that does the Social Insurance Agency (Sociálna poisťovňa) take over the payments. Understanding this split helps companies set up their payroll administration correctly and plan in advance for the costs they incur while their employees are ill.

How sick leave works

Sick leave is confirmed by the attending doctor, and its duration determines how long the employee cannot perform work. During sick leave, the employee is not entitled to a wage but to income compensation or sickness benefit. Which of the two is paid depends on how long the sick leave lasts and on which phase of it the employee is in.

• first part of sick leave – income compensation from the employer,
• the following period – sickness benefit from the Social Insurance Agency,
• confirmation and records from the doctor.

Income compensation from the employer

During the first defined part of the sick leave, the employer pays the employee income compensation directly from its own funds. Its amount is based on the daily assessment base and is divided into periods with different compensation percentages. The specific percentages and the number of days for which the employer pays may change, so always check the current rules when calculating.

Sickness benefit from the Social Insurance Agency

Once the period during which the employer pays income compensation has ended, the Social Insurance Agency takes over the payments in the form of sickness benefit. It is paid directly to the employee on the basis of documents from the doctor and from the employer. Entitlement to the benefit and its amount depend on how long the employee has been covered by sickness insurance and on the employee’s assessment base.

The employer’s obligations during sick leave

The employer must calculate and pay the income compensation correctly, record the duration of the sick leave and pass the documents to the Social Insurance Agency for the subsequent benefit, so that payments to the employee continue smoothly without interruption.

1. receive the sick leave certificate,
2. calculate the income compensation for the first period,
3. pass the documents to the Social Insurance Agency,
4. reflect the sick leave in the wage and contributions.

Common points of confusion

The most frequent questions concern until when the employer pays and from when the Social Insurance Agency pays, how the assessment base is calculated and what happens with contributions during sick leave. Professional payroll processing ensures that the income compensation and the transition to sickness benefit are handled correctly and on time.

Contributions and obligations during sick leave

During sick leave, the employee’s contribution situation also changes, as certain insurance contributions are not paid for the period in which the employee receives the benefit. The employer must therefore reflect this period correctly in the monthly reports for the insurance institutions. It is also important that the employee delivers the sick leave certificate on time, and later the confirmation that it has ended, because the correct processing of the wage depends on it. Electronic confirmation of sick leave has simplified this process in recent years, but the records and the link to income compensation and to the benefit remain the employer’s responsibility. Accurate and timely processing protects the employee from a loss of income and the company from errors in reports and contributions. Long-term sick leave requires particular attention, as the continuity of the documents needs to be monitored on an ongoing basis and the period correctly reflected both in the wage and in the statements for the insurance institutions.

If you want your employees’ sick leave to be processed correctly every time, Bilvao’s payroll specialists will help you with it.

Related articles: Employee benefits and their tax treatment, Maternity and parental benefits: entitlement and calculation, Home office and how to set it out in the employment contract.

Frequently asked questions

Who pays for the first days of sick leave?

The first defined period of sick leave is covered by the employer in the form of income compensation. Only after it has ended does the Social Insurance Agency take over the payments in the form of sickness benefit. The number of days may change, so check the current rules.

What is income compensation during sick leave calculated from?

From the daily assessment base derived from the employee’s income, with the individual periods of sick leave having different percentages. The specific figures change, so check the current rates when calculating.