Statutory Sick Pay Changes 2026. What Employers need to know.

Significant reforms to Statutory Sick Pay (SSP) took effect from 6^th April 2026, representing one of the biggest updates to the sick pay system in over a decade. These changes affect both who qualifies for SSP and how payments are calculated, so it’s important for employers to ensure payroll accuracy and manage clear communication with staff.

Below is an overview of what is changing, along with practical examples illustrating the impact on different types of employees.

What’s Changing?

Two major reforms will shape the SSP system:

1. SSP will be paid from day one

The three “waiting days” will be removed. From 6 April 2026, SSP will be payable from the first day of sickness absence.

2. The lower earnings limit will be removed

Prior to 6^th April employees must earn above £125 per week, the Lower Earnings Limit (LEL) to qualify. Under the new rules, all employees will be eligible, regardless of earnings.

Key Differences at a Glance

Current Rules (before 6 April 2026)

Must earn above the Lower Earnings Limit (LEL)
Flat rate of £118.75 per week
3 waiting days before SSP starts

New Rules (from 6 April 2026)

No minimum earnings required
£123.25 per week OR 80% of average weekly earnings, whichever is lower
SSP paid from day one

Examples: How the New Rules Work when entitlement is SSP only

Example 1: Higher earner

Earnings: £800 per week
80% of weekly earnings: £640
Flat rate: £123.25

As SSP is the lower of the two amounts, this person would receive the flat rate of £123.25 per week.

Example 2: Earner above Lower Earnings Limit

Earnings: £150 per week
80% of weekly earnings: £120
SSP (before 6^th April 2026): £118.75
SSP (after 6^th April 2026): £123.5

Under the old rules this person would have received SSP as the weekly salary was above the Lower Earnings Limit. However, from 6^th April 2026, this person would now receive 80% of their weekly earnings as it is lower than SSP.

Example 3: Earner below Lower Earnings Limit

Earnings: £120 per week
80% of weekly earnings: £96

Prior to 6^th April 2026 this person would not have qualified for SSP as it was under the lower earnings limit. However, after 6^th April 2026 they will be entitled to £96 per week.

Transitional Cases (across tax years)

You may be wondering what happens if someone was off sick prior to 6th April 2026 and their period of absence continues over into the new tax year. Here are some examples of how the rules apply to help you understand.

Example 1: Below the Lower Earnings Limit prior to 6^th April 2026

Earnings: £115 per week
80% of weekly earnings: £92
SSP (before 6^th April 2026): £118.75
SSP (after 6^th April 2026): £123.5

Prior to 6^th April 2026 this employee would not be entitled to SSP as they did not meet the lower earnings limit. However, from 6^th April 2026 they would be entitled to receive 80% of their weekly earnings, £92 per week and this kicks in from that date, even if they were off sick before 6^th April.

Example 2: Above the Lower Earnings Limit prior to 6^th April 2026

Earnings: £135 per week
80% of weekly earnings: £108
SSP (before 6^th April 2026): £118.75
SSP (after 6^th April 2026): £123.5

Because this person was already off sick before 6^th April 2026, they would have been receiving SSP at the flat rate of £118.75 per week. Therefore, they will move onto the new flat rate of £123.25 until that period of sickness absence ends. If there was a new period of sickness absence, the new rules mean they would receive 80% of their weekly earnings, so £108 per week.

How Will These Changes Affect Small Businesses?

These reforms will have a meaningful impact on small employers, many of which have limited HR capacity and tighter financial margins.

Increased SSP Costs

SSP being payable from day one means higher overall costs, particularly for businesses where short-term sickness is common.

Removing the LEL means more staff will now qualify, increasing entitlement across part-time, seasonal, and casual roles.

More Complex Administration

Small businesses often rely on simpler payroll systems or manual processes. The new 80% earnings calculation introduces:

Additional payroll updates.
More complex record‑keeping.
Increased risk of calculation errors without appropriate software.

Greater Impact on Part-Time and Seasonal Workforces

Industries with variable or low-hour contracts (hospitality, retail, care, etc.) will see the biggest change, as employees below the LEL will now qualify for SSP.

Cashflow Considerations

For very small employers, paying SSP from the first day of absence may strain cashflow during periods of heightened sickness.

A Need to Tighten Absence Management

Small businesses should review:

Sickness reporting procedures.
Fit note processes.
Return-to-work guidance.

Clearer policies will help manage increased eligibility and reduced waiting time.

Potential Benefits for Staff Retention

Although the reforms require more investment from employers, they may help improve:

Staff wellbeing.
Reduced presenteeism.
Employee loyalty, especially among low‑income workers.

For small teams, improved retention can be a long-term business advantage.

What Employers Should Do Now

To prepare for the April 2026 changes:

Update payroll software to ensure they can calculate the 80% earnings calculation.
Revise your sickness absence policy, removing references to waiting days or the current flat rate.
Plan for transitional cases, ensuring continuity for staff already off sick.
Train managers and supervisors so they can explain the changes and manage absence confidently.
Communicate early with employees to set expectations.

Need Support with these Changes?

If you’d like help reviewing your policies or working through SSP scenarios for your staff, our team is here to help. Please contact us on support@blossomhr.co.uk.