Statutory Sick Pay changes: What employers and employees need to know from April 2026

The Employment Rights Bill will introduce significant changes to Statutory Sick Pay (SSP) from April 2026. These changes are designed to provide better financial support for employees and simplify SSP eligibility. We have outlined what you need to know below:

SSP payable from day one

Currently, employees must wait for three unpaid “waiting days” before SSP is paid. From April 2026:

Waiting days will be abolished.
SSP will be payable from the first day of sickness absence.

This change will particularly benefit employees with short-term illnesses, ensuring they receive financial support immediately.

In practice, this means that new employees may be eligible for SSP immediately once employed, but they need to be on the employer’s payroll.

Removal of the Lower Earnings Limit (LEL)

At present, employees must earn at least £125 per week (2025/26) to qualify for SSP. From April 2026:

The LEL will be removed.
All employees, regardless of income level, will be eligible for SSP.

This means that even part-time or lower-paid staff will have access to sick pay from the first day of absence.

New SSP calculation

Under the new rules, SSP will be calculated as the lower of:

80% of an employee’s average weekly earnings, or
The flat rate, which is currently £118.75 per week (2025/26).

For most employees, this represents no change to the amount received, aside from being payable from day one. Only a small number of workers who earn just above the current LEL will see an increase.

In practice:

When an employee is off sick for one full day, you will need to check the employee’s average weekly earnings (AWE):

If this is £154.05 or less, you will need to pay the employee at 80% of this figure.
If the figure is £154.06 or higher, the flat rate will apply, from 6 April 2026.

Calculating Average Weekly Earnings (AWE)

Average weekly earnings are calculated each time there is a new Period of Incapacity for Work (PIW), unless it links to a previous period.

Key points to be aware of:

The calculation is based on an 8-week reference period.
This applies to all employees, including those previously below the LEL.
Any 80% calculation must be rounded up to the nearest whole penny.
The final SSP amount remains capped at the lower of 80% AWE or the flat rate.

Linking periods

Linking periods of sickness still apply under the new rules and become more important when determining SSP entitlement.

Periods of sickness are linked if they are separated by 56 days (8 weeks) or less.
Where periods are linked, they are treated as one PIW.
The AWE calculated for the first period is used for subsequent linked absences.

This means employers will still need to track sickness history carefully, even though waiting days are removed.

Transitional protection arrangements

Transitional rules will apply where an employee’s sickness absence spans 6 April 2026.

Employees already receiving SSP before 6 April 2026 will be protected so their SSP does not reduce under the new rules.
For example, employees earning between £125.00 and £154.05 per week who are already off sick and receiving SSP before 6 April will continue to receive the flat rate (uplifted for 2026/27) for that period of absence.
Transitional protection ends if the employee returns to work or their SSP entitlement otherwise ends. Any new sickness absence will then be calculated under the new rules.

Why employers should plan ahead

Individually, each of these changes will increase the overall SSP cost for employers. Preparing for the April 2026 changes now can help ensure:

Payroll systems are updated in time
HR policies reflect the new eligibility and payment rules
Employees are informed about their entitlements

Current SSP rules (for comparison)

Feature	Current rules (2025/26)	New rules (April 2026)
Waiting days	3 unpaid days	0 – SSP from day 1
Earnings threshold	£125/week	No threshold – all eligible
SSP rate	Flat rate £118.75/week	Lower of 80% of average earnings or £118.75/week

These upcoming changes underline the government’s focus on improving sick pay coverage and support for all employees.

How can Price Bailey help?

Our Payroll team can support your business to ensure you meet all your payroll obligations – leaving you to focus on running your business. To contact a member of the team about SSP or to ensure your payroll systems are up-to-date before the changes come into effect, fill out the form below.

We always recommend that you seek advice from a suitably qualified adviser before taking any action. The information in this article only serves as a guide and no responsibility for loss occasioned by any person acting or refraining from action as a result of this material can be accepted by the authors or the firm.

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