(Or: “If You Thought Sick Pay Was Simple Before…”)
April 2026 is not a small tweak year.
It’s a “right, we’re doing this properly now” year.
The Employment Rights Act 2025 brings significant payroll-related changes into force from 6 April 2026, and the biggest operational impact for employers?
Statutory Sick Pay.
Let’s walk through what is actually changing, what is not, and what payroll needs to get right — calmly and correctly.
The Big SSP Changes from 6 April 2026
1. Removal of the Lower Earnings Limit (LEL)
Currently, employees must earn at least the LEL to qualify for SSP.
From 6 April 2026, that requirement disappears.
This means:
- Employees earning below the LEL will now qualify for SSP.
- Eligibility is no longer based on meeting a weekly earnings threshold.
- SSP becomes available to all eligible employees regardless of income level.
This is a major expansion of entitlement — particularly affecting part-time and lower-paid workers.
2. SSP Payable from Day One
The concept of waiting days is being removed.
Under the current system, SSP is payable from the fourth qualifying day.
From April 2026:
- SSP is payable from the first full qualifying day of sickness.
- No waiting days apply for new absences from 6 April onward.
- The concept of qualifying days still exists.
- Linking rules (periods within 8 weeks) still apply.
So yes — sickness on a Monday can now trigger SSP immediately.
3. The New SSP Rate Calculation
From 6 April 2026, SSP will be:
The lower of:
- 80% of average weekly earnings (AWE), or
- The flat statutory rate (£123.25 for 2026/27).
This is a structural change.
Previously, eligible employees simply received the flat rate.
Now payroll must:
- Calculate average weekly earnings as normal (using existing HMRC rules).
- Work out 80%.
- Compare it to £123.25.
- Pay the lower amount.
For lower earners, this means SSP will often be 80% of pay rather than the flat rate.
For higher earners, the flat rate remains the cap.
Rounding rules still apply — fractions of a penny are rounded up.
Transitional Protections: Where It Gets Technical
The transitional guidance makes clear that some employees already receiving SSP before 6 April 2026 are protected.
If an employee:
- Was already in receipt of SSP before 6 April, and
- Continues to be off sick on 6 April, and
- Would otherwise see a reduction under the new 80% rule
They are protected and continue receiving the uprated flat rate (£123.25) for that continuous absence.
However:
- Transitional protection ends when they return to work.
- It does not apply to later linked periods after return.
- Linked PIWs still reference the first period for AWE calculations.
This is where payroll systems need to be configured carefully. It is not simply a “change the rate” update.
What Has NOT Changed
Let’s calm things down slightly.
The following remain the same:
- The 28-week maximum SSP entitlement.
- The concept of qualifying days.
- Linking rules (periods within 56 days).
- Self-certification rules.
- Medical evidence requirements.
- Employer recovery rules (SSP still cannot be reclaimed from HMRC).
Average Weekly Earnings calculations remain based on the established relevant period.
This is not a reinvention of SSP — it’s an expansion and recalibration.
Other Employment Rights Changes (April 2026)
Alongside SSP reform, April 2026 also introduces:
Day-One Statutory Paternity Leave
The 26-week service requirement is removed for eligible births/adoptions meeting the new criteria.
Day-One Right to Unpaid Parental Leave
The previous 52-week service requirement is removed.
These changes increase access to statutory leave rights, meaning payroll teams must be prepared to process entitlements earlier in employment than before.
Practical Impact on Employers
For small and medium-sized businesses, this means:
- Increased SSP costs (more employees eligible).
- Earlier payment triggers (no waiting days).
- More complex payroll calculations.
- Potential system configuration updates.
- Policy reviews.
- Manager training.
SSP remains non-recoverable from HMRC.
So yes — cost modelling matters.
Payroll Software Considerations
Systems must now handle:
- Removal of the LEL eligibility check.
- 80% AWE calculations.
- “Lower of” comparisons.
- Transitional protections.
- No waiting days logic.
- Linked PIW continuity rules.
If your payroll software cannot do this cleanly, manual intervention will be required.
And manual SSP intervention is not something you want to be guessing at.
The Love Payroll View
This is one of the biggest SSP shifts in years.
It is more protective of employees.
It increases compliance expectations.
It raises cost exposure for employers.
Handled properly, it is manageable.
Handled casually, it becomes expensive very quickly.
At Love Payroll Limited, we are already preparing systems, reviewing processes, and advising clients so that April 2026 feels structured — not chaotic.
Because legislative change is inevitable.
Payroll panic is not.
