Statutory Sick Pay changes from April 2026 – payroll updates

From 6 April 2026, important changes to Statutory Sick Pay (SSP) came into effect, impacting both employers and employees. While businesses will need to make some practical adjustments, the reforms also present an opportunity to improve absence management, support employee wellbeing, and create a more inclusive workplace culture.

What has changed?

The key updates to SSP are:

• Payment from day one – SSP is now payable from the first day of sickness, removing the previous 3 waiting days
• Removal of the lower earnings threshold – more workers, including part time and lower paid staff are now eligible
• Earnings linked calculation – SSP is now calculated as the lower of 80% of average weekly earnings or the statutory weekly rate
• The government has said that these changes are designed to provide more consistent and inclusive support when employees are unwell.

Impact on Employers

The reforms will have a direct impact on both costs and processes. The government estimates that SSP changes will increase employer costs by around £450 million per year, which equates to roughly £15 more per employee.  

However, the greater challenge is operational. Payroll systems must be updated to reflect day one entitlement and the new calculation method. Absence policies should also be reviewed to ensure they remain accurate.

Managers will need clear guidance on applying the new rules consistently, communicating changes to staff and maintaining accurate absence records from the first day of illness.

Practical tip - review your payroll systems now to identify employees who are newly eligible and ensure calculations align with the updated rules.

Preparing for the changes

To ensure you are ready, businesses should:

• audit eligibility and absence records
• update payroll and HR systems
• review and revise policies
• train managers
• communicate clearly with staff
• seek advice where needed