Significant reforms to Statutory Sick Pay (SSP) will take effect from 6 April 2026 under the Employment Rights Act 2025.

If you employ staff, these changes will directly impact your payroll processes and sickness absence policies.

SSP is the minimum amount you are legally required to pay to your eligible employees who are absent due to illness. While some employers offer improved sick pay arrangements, SSP remains the baseline legal requirement.

What are the SSP changes, and when do they take effect?

The revised SSP rules apply to any sickness absence that begins on or after 6 April 2026. From that date, the following changes will be introduced:

  • SSP will be payable from the first day of sickness absence, not the fourth consecutive day, which previously included three unpaid 'waiting days'.
  • The Lower Earnings Limit of £125 per week will be removed.
  • SSP will be calculated based on a revised earnings formula

Collectively, these changes will increase eligibility and are likely to result in more frequent SSP payments, particularly for short-term absences.

What is the revised SSP calculation method?

From 6 April 2026, SSP will be calculated as the lower of:

  • 80% of the employee's average weekly earnings
  • The statutory weekly rate, set at £123.25 for the 2026-27 tax year

Average weekly earnings are typically based on the eight-week period preceding the sickness absence.

However, employees earning between £123.25 and £154.06 per week may find they don't receive as much SSP as they would have done under the old rules.

Expanded eligibility for SSP

The removal of the Lower Earnings Limit represents a significant shift. Before 6 April 2026, employees had to earn at least £125 per week to qualify.

After 6 April 2026, this threshold will no longer apply, meaning all eligible employees, regardless of earnings level, may receive SSP, provided they also meet the following eligibility criteria:

  • They must have undertaken work for their employer.
  • They must notify their employer of their sickness within the required timeframe.
  • They must be classified as an employee for tax purposes and paid via PAYE.

Self-employed individuals who pay their tax through self assessment remain outside the scope of SSP.

What is the duration of SSP entitlement?

There is no change to the maximum payment period. SSP will continue to be payable for up to 28 weeks per period of sickness. Existing rules regarding linked periods of absence will also remain in place.

Practical considerations for employers

The introduction of the new rules is likely to create additional complexity in several areas, including:

  • Managing sickness periods that span the April 2026 transition date.
  • Ensuring employees are not disadvantaged where absences began before the new rules apply.
  • Correctly calculating SSP for linked or overlapping sickness periods.

Ensuring you have clear processes and accurate payroll handling is essential, whether you run payroll internally or use an external provider.

Preparing your business's payroll for the SSP changes

The SSP changes are not insignificant and could cause issues if you do not update your systems and procedures.

Employers need to review their payroll systems to confirm that they can accommodate the revised SSP calculations. If payroll is outsourced to an external provider, you should liaise with them to ensure the updates have been implemented.

HR manuals and procedures need to be updated to reflect the new sickness absence policies, and employment contracts may need to be amended where required. You should also communicate the changes clearly to your managers and employees to reduce uncertainty, minimise errors, and help maintain compliance.

What if an employee does not qualify for SSP?

Where an employee is not entitled to SSP, you must confirm this in writing. This can be done via letter, email or by issuing an SSP1 form.

The employee may then be eligible to apply for alternative financial support.

Conclusion

These changes represent a big shift in how SSP operates, with broader eligibility and earlier payment obligations for employers.

While the reforms are designed to support employees, they will require employers to review processes, update systems and ensure accurate implementation.

Need support reviewing your payroll processes?

The SSP changes are a good reminder that payroll and compliance processes can be a minefield. If you would like to outsource this, please contact us. We offer an efficient payroll service as part of our essential business services.

To book a free consultation to discuss your payroll needs, please ring 0113 320 0001 or email office@dwco.co.uk.