The UK government has introduced the most significant overhaul of Statutory Sick Pay in decades. From 6 April 2026, new rules under the Employment Rights Act 2025 change who qualifies for SSP, when payments begin, and how the amount is calculated. These changes affect every business that employs staff, from sole traders with one part-time employee to larger SMEs with dozens of workers.
If you are an employer, now is the time to review your payroll processes and absence policies. If you are an employee, you may now be entitled to sick pay for the very first time. This guide explains exactly what has changed and what you need to do about it.
Key date: All changes take effect from 6 April 2026. Specific transitional rules also apply to absences that started before this date.
What Is Statutory Sick Pay?
Statutory Sick Pay (SSP) is the minimum amount an employer must pay a qualifying employee when they are too ill to work. It is funded by the employer, not HMRC, and can be paid for up to 28 weeks of sickness absence.
Previously, SSP was set at a flat weekly rate of £118.75, and only employees earning above a minimum threshold qualified. Both of those rules have now changed.
For 2026/27, the maximum weekly SSP rate is £123.25.
The Three Most Important Changes
1. SSP Now Starts from Day One
Under the old rules, employees had to be absent for at least four consecutive days before SSP could be paid. The first three days, known as waiting days, were unpaid.
From 6 April 2026, that rule no longer exists. SSP is now payable from the very first qualifying day of sickness absence, however short the absence.
What this means for employers:
- Even a single day of absence can now trigger an SSP payment obligation
- Timely absence reporting becomes more important than ever
- Short-term absences that previously had no payroll cost will now need to be processed and paid
2. No More Minimum Earnings Requirement
Previously, employees had to earn at least £125 per week, known as the Lower Earnings Limit (LEL), to qualify for SSP. This excluded millions of part-time, low-hours, and variable-hours workers.
From 6 April 2026, there is no minimum earnings requirement. Every eligible employee qualifies for SSP regardless of how many hours they work or how much they earn.
This change is estimated to extend SSP coverage to approximately 1.3 million additional workers across the UK, particularly those in retail, hospitality, and the care sector.
Workers most affected by this change:
- Part-time employees
- Zero-hours contract workers
- Casual and variable-hours staff
- Lower-paid workers in sectors such as retail, hospitality, and social care
3. A New Way of Calculating SSP
SSP is no longer a simple flat rate for everyone. From 6 April 2026, the amount an employee receives depends on their average weekly earnings.
The calculation works as follows:
- Employees earning £154.05 per week or less receive 80% of their Average Weekly Earnings (AWE)
- Employees earning £154.06 per week or more receive the flat rate of £123.25 per week
In both cases, the employee always receives whichever figure is lower, ensuring that SSP cannot exceed their normal pay.
Two quick examples:
- An employee earning £100 per week receives SSP of £80 per week (80% of £100)
- An employee earning £250 per week receives SSP of £123.25 per week (the flat rate, as it is lower than 80% of £250)
Average Weekly Earnings (AWE) are calculated using the employee's gross earnings over the 8-week period immediately before the first day of the Period of Incapacity for Work.
SSP During Phased Returns to Work
If an employee is returning to work gradually after illness, the new rules clarify their entitlement during that phased return.
SSP is now payable for each day an employee is absent during an agreed phased return, even if they are attending work on other days of the same week.
Example: An employee who normally works five days a week returns on three days as part of a phased return. They are entitled to SSP for the two days per week they are unable to attend.
This is a welcome clarification that removes previous ambiguity around partial-week absences.
What About Absences That Started Before 6 April 2026?
If one of your employees was already off sick before 6 April 2026 and their absence continues after that date, the following transitional rules apply:
- Pay at the new rate of £123.25 per week from 6 April 2026 onwards
- If the employee was still serving waiting days on 6 April 2026, those waiting days are cancelled and SSP becomes payable from that date
- If the employee earns between £125 and £154.05 per week and was already receiving SSP, and the 80% AWE calculation produces a lower figure than the flat rate, they must still receive the £123.25 flat rate. This transitional protection applies until they return to work or exhaust their 28-week entitlement
- If an employee was off sick before 6 April 2026 but was not entitled to SSP because they earned below the LEL, they may now become entitled from 6 April 2026, provided their absence started on or after 22 September 2025
What Employers Need to Do Now
These changes require action across your payroll and HR processes. Here is a practical checklist to ensure your business is compliant:
- Update your payroll software or speak to your payroll provider. The new day-one entitlement and the 80%/flat-rate calculation must be correctly configured. - Ollen payroll
- Review your absence reporting procedures. Employees must notify you of sickness absence promptly. Without timely notification, processing SSP accurately becomes difficult.
- Identify newly eligible employees. Review your workforce for part-time or low-hours staff who previously fell below the LEL. They may now qualify for SSP for the first time.
- Update your employment contracts and sick pay policies. Ensure your company’s sick pay scheme, if you operate one, reflects the new statutory minimums.
- Brief your line managers. They need to understand the new rules, particularly around day-one absences and phased return entitlements.
A Note for Employees
If you fall ill, you are now entitled to SSP from your very first day of absence, provided you meet the qualifying conditions. You must be classed as an employee for tax purposes, you must notify your employer within their stated deadline (or within 7 days if none is given), and you must have done some work for your employer.
You no longer need to meet any minimum earnings requirement, and you no longer need to wait three days before pay begins. Your employer cannot pay you less than the statutory amount. SSP can be paid for up to 28 weeks in total per period of incapacity.
Need Help with Payroll and SSP Compliance?
The new SSP rules add real complexity to payroll management, particularly for businesses with part-time, variable-hours, or newly eligible staff. Getting the calculation wrong or missing a payment obligation entirely can create compliance issues and damage employee relations.
The payroll team at Ollen Services handles SSP calculations, absence records, and compliance for clients across the UK. Whether you employ one person or fifty, accurate and up-to-date payroll management keeps your business protected.
If you have questions about how these changes affect your business, get in touch today.
You can also explore the full range of payroll and accounting support and accounting services.
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This article is based on official guidance published by GOV.UK and reflects the rules in force from 6 April 2026. It is provided for general information purposes only and does not constitute legal or professional advice. For advice specific to your circumstances, please contact Ollen Services directly.