Major reforms to Statutory Sick Pay (SSP) are coming into force on 6 April 2026 as part of the Employment Rights Act 2025. These changes affect payroll processing, eligibility, and sickness policies for every employer — here’s a clear breakdown of what’s changing and what you need to do.
What’s Changing?
1. Removal of the Lower Earnings Limit
The current earnings threshold of £125 per week for SSP will be removed entirely. All employees will qualify for SSP regardless of how much they earn — a particularly significant shift for businesses with part-time, variable-hours, or lower-paid staff.
2. SSP Payable from Day One
The existing three waiting days will be abolished. SSP will become payable from the first day of sickness, which will increase employer costs for short-term absences. This is one of the most impactful changes for businesses where short-term sickness is common.
A new two-rate calculation will apply for employees with lower earnings. Employers will pay whichever is lower:
– 80% of the employee’s average weekly earnings, or
The standard SSP weekly rate — due to be £123.25 for 2026– 27
SSP will therefore no longer be a single flat rate for all employees.
4. Transitional Protection for Existing Absences
Employees already off sick before 6 April 2026 are protected under transitional arrangements so they are not disadvantaged mid-absence. Employees who earn between £125.00 and £154.05 per week and were already receiving SSP before 6 April 2026 will continue to receive flat rate SSP for the remainder of their absence, rather than the 80% average rate. This is a high-risk area for payroll errors — clear communication and accurate record-keeping of sickness dates will be essential.
Worked Example: Joan’s Absence Across the April Boundary
ILLUSTRATIVE EXAMPLE
Employee: Joan — Monday to Friday, earning £130 per week
Joan is off sick from 30 March 2026 with a sick note running to 8 April 2026 — a total of 8 working days.
Pre-6 April rules: 3 waiting days unpaid, then 5 days SSP at the 2025–26 rate of £118.75 per week.
Post-6 April rules: Because Joan’s 80% average earnings (based on £130 per week) are less than the new standard SSP rate of £123.25, she would normally receive the lower amount. However, as she was already off sick before 6 April, transitional protection applies — she continues to receive the standard SSP rate.
Her SSP is calculated as follows:
30 March – 5 April (2 paid days after 3 waiting days)
2025-2026 rate: £118.75 / 5 * 2
£47.50
6 April – 8 April (3 days at new rate)
2026-27 rate: £123.25 / 5 * 3
£73.95
Total SSP due: £121.45
Variable-Hours Workers
Most variable-hours workers will now be eligible for SSP, and the days for which SSP is payable will depend on their qualifying days — the days they normally work under their contract.
Employers must agree qualifying days with each employee. Where you cannot reach agreement, the rules provide the following defaults:
Default Qualifying Days Rules
- The days the employee is required to work under their contract
- A Wednesday only, if there is no named day of work
- Every day of the week except those when none of the workforce are required to work
Employers should review and document qualifying days for all variable-hours staff before April 2026.
What Employers Should Do Now
These changes require updates to payroll systems and internal processes. Ahead of April 2026, employers should:
→ Review budgets to account for increased SSP costs arising from dayone payments
→ Update sickness absence policies and employee-facing communications
→ Ensure payroll systems are configured for the new two-rate SSP calculation
→ Maintain accurate records of sickness start dates — particularly for absences spanning 6 April
→ Clearly document and communicate qualifying days for every member of staff, especially those on variable hours
We will continue to monitor HMRC guidance as further details are released and will ensure your payroll is updated in line with the new legislation.
Questions about how this affects your business?
Our payroll team is here to help. Get in touch and we’ll walk you through exactly what you need to do.
For payroll queries, call 0333 090 6613 or visit us at Edinburgh House, 170 Kennington Lane, London SE11 5DP