Statutory Sick Pay changes from April 2026

As of 6th April 2026, Statutory Sick Pay (SSP) is subject to substantive reform under the Employment Rights Act 2025. These changes are expected to increase SSP exposure for many employers, particularly those with lower‑paid, part‑time or variable‑hours workforces.

Employers that have not assessed the operational and financial implications of these changes may face compliance risk, increased payroll complexity, and unanticipated cost pressures.

Key changes from 6th April 2026

SSP Payable from Day One of Absence

Historically, SSP acted as a relatively limited statutory obligation, with eligibility constrained by earnings thresholds and with short‑term absences frequently falling outside scope due to unpaid waiting days. From 6th April 2026, the three unpaid “waiting days” has been removed. SSP is now payable from the first qualifying day of sickness absence, regardless of the duration of absence. Formally the period of incapacity for work had to be 4 consecutive days absence and this is now 1 day.

This change increases the likelihood that short‑term absences will generate SSP liability. Payroll and absence systems will need to ensure that even single‑day absences are correctly captured and processed.

Removal of the Lower Earnings Limit

Eligibility for SSP is no longer linked to a minimum earnings threshold. Employees earning below the former Lower Earnings Limit (£125 per week) will now qualify, bringing into scope groups that were previously excluded from statutory sick pay altogether, particularly affecting:

• Part‑time employees
• Casual or zero‑hours workers
• Employees with irregular pay patterns

As a result, the SSP‑eligible population expands materially, particularly in sectors that rely heavily on flexible labour.

Revised SSP calculation and increased weekly rate

As of 6th April 2026, SSP is payable at the lower of:

• 80% of the employee’s Average Weekly Earnings (AWE)
• The statutory flat weekly rate of £123.25 (increased from £118.75)

This dual‑calculation approach introduces greater technical complexity into payroll processing. While higher earners will continue to receive the flat rate, lower‑paid employees will receive SSP linked directly to their earnings profile. This requires employers to correctly calculate Average Weekly Earnings across a broader range of employees, including those with fluctuating hours, variable pay or irregular working patterns. Inaccuracies in earnings data or averaging methodologies therefore create a heightened risk of under‑ or over‑payment

Why these changes are significant for employers

When considered collectively, these changes alter the risk profile of SSP for employers. More employees qualify, more absence scenarios give rise to statutory pay, and the calculation itself becomes more data‑dependent. The result is an increase in both the direct financial cost of SSP and the indirect administrative burden associated with compliance. Payroll systems that were previously adequate may struggle to process SSP accurately at scale, particularly where Average Weekly Earnings must be recalculated frequently or where absence data is fragmented.

There are also transitional considerations. Sickness absences that began before 6th April 2026 and continue beyond that date are subject to specific transitional rules. These cases require careful handling to ensure that SSP is applied correctly both before and after the legislative change. Failure to identify and manage these cases accurately may result in inconsistent treatment, retrospective corrections, or disputes with employees.

How can Gravita help

If you are an employer in need of advice or have a specific question on Statutory Sick Pay, please reach out to our specialist payroll team.