From April 2026, the Employment Rights Act will come into effect, bringing reforms to Statutory Sick Pay (SSP) that will affect every employer.
It will change how SSP is calculated and create new responsibilities for employers.
What are the changes to SSP?
One of the biggest changes is the removal of the three waiting days within current legislation. SSP will instead become payable from the first day of sickness, rather than from day four.
This means employers will need to pay SSP for short absences that may have previously gone unpaid.
The Lower Earnings Limit (LEL) will also be abolished and part-time, low-paid and casual workers will now qualify for SSP.
How SSP is calculated will also change and the payment rate will be the lower of:
- 80 per cent of Average Weekly Earnings (AWE)
- The standard SSP flat rate, which is rising to £123.25 per week
SSP will still be based on average weekly earnings, usually calculated over the eight weeks before the sickness absence.
If your employee is already receiving SSP before 6 April 2026, transitional protections will apply.
This protection lasts for the remainder of their 28-week entitlement, provided they do not return to work or end their contract beforehand.
How should employers prepare for SSP changes?
These changes will bring additional responsibilities to your payroll teams and you must start planning now.
This includes:
- Reviewing sickness absence policies to reflect day-one SSP
- Updating contracts and handbooks on waiting days or earning thresholds
- Checking payroll systems can handle percentage-based SSP calculations
- Budgeting and forecasting costs, as more employees will qualify for SSP
- Communicating clearly with employees so new obligations are met
How can we support you?
Our payroll specialists can help you model the financial changes to SSP and make sure your systems and calculations are compliant.
We can also review your policies and help reduce the risk of costly payroll errors.
For further guidance or advice on the SSP changes, contact our team today.
