The UK’s statutory sick pay (SSP) framework has undergone its most significant transformation in years. From April 2026, a series of legislative changes reshape the way employers manage and fund employee sickness absence – with implications that stretch across businesses of all sizes and sectors. Here is what you need to know.
What Is Changing?
SSP Payable from Day One
Under the current rules, employees must serve three unpaid “waiting days” before becoming entitled to SSP. From April 2026, this waiting period is abolished. Sick pay will be due from the very first day of absence, meaning employers will face an immediate financial obligation as soon as an employee is off sick.
Removal of the Lower Earnings Limit
Previously only employees earning at least £125 per week (2025/26 threshold) qualified for SSP. That threshold is being removed entirely. From April 2026, eligibility will extend to all employees, including part-time and lower-paid workers, regardless of their income level. This is a meaningful expansion of the workforce covered under the SSP regime.
A New Calculation Method
The rate of SSP will no longer be a straightforward flat payment. Instead, it will be calculated at the lower of either 80% of an employee’s Average Weekly Earnings (AWE) or the flat rate of £123.25 per week. Employers will need to assess each employee’s earnings individually to determine which figure applies.
Transitional Protection for Existing Absences
For employees already receiving SSP before 6 April 2026 and who remain off work beyond that date, a transitional protection applies. These individuals will continue to receive the increased flat rate of £123.25 for the duration of their continuous absence. This safeguard ensures that lower-paid workers do not experience an unexpected reduction in their weekly SSP entitlement as a result of the new 80% earnings-based calculation. The protection remains in place until the employee returns to work, exhausts their 28-week maximum entitlement, or their contract comes to an end.
Linked Periods of Absence — No Change
The existing rule for linked periods of absence remains unchanged. Absences occurring within 56 days of one another continue to be treated as a single, continuous period for SSP purposes.
What Should Employers Do Now?
Businesses should take the following steps will help ensure compliance and a smooth transition:
- Review employment contracts and staff handbooks to ensure they accurately reflect the new changes.
- Update sickness absence policies to clearly distinguish between statutory sick pay entitlements and any enhanced company sick pay schemes in place.
- Communicate the changes to employees so that staff understand what they are entitled to and when.
- Engage with your payroll software provider to confirm when and how their systems will be updated to accommodate the dual-rate calculation (80% of AWE vs. the flat rate).
- Understand and apply transitional protections correctly for any employees already on SSP at the point the new rules take effect.
This article is supported by our risk management partners, Arch Risk Management. For more information, please visit www.archriskmanagement.co.uk
The information contained in this article is provided for general guidance purposes only and does not constitute legal or financial advice. Employers should seek professional advice tailored to their specific circumstances.