Significant reforms to Statutory Sick Pay (SSP) will come into effect from 6 April 2026 under the Employment Rights Act 2025. These represent the most substantial changes in decades and will materially impact payroll operations, budgets, resourcing decisions and sickness absence processes across all sectors.
The changes are designed to improve financial stability for lower paid workers, reduce the pressure to attend work while unwell and support more sustainable returns to work. However, the reforms also introduce new technical and administrative considerations that employers should be preparing for well in advance of April.
Sean Farnell, Partner at Burgis & Bullock, commented: “Although SSP is often seen as routine payroll administration, these changes will have wider operational and financial consequences. Employers who plan early will be in a far stronger position to manage the increased cost exposure and ensure their payroll systems and internal processes are ready.”
From 6 April 2026, eligibility for SSP will no longer depend on meeting the Lower Earnings Limit. All employees who meet the basic employment criteria will qualify for SSP, regardless of their income level. This brings part time workers, variable hours staff and lower paid employees firmly into scope.
The current system of three unpaid waiting days will be abolished. SSP will be payable from the first full day of sickness absence, which means short term absences that previously attracted no statutory payment will now generate employer cost. This also supports phased returns to work, as SSP will apply to individual days not worked due to illness.
From April 2026, SSP will be paid at the lower of 80% of an employee’s Average Weekly Earnings over the standard eight-week reference period, or the uprated statutory cap of £123.25 per week. For many lower paid employees, SSP will therefore be earnings based rather than a flat rate. Employers will need to ensure payroll systems can calculate and apply the correct figure case by case.
Special protections will apply for anyone already receiving SSP when the new rules come into force. Where the 80% of AWE calculation would result in a lower entitlement than the flat statutory rate, the higher uprated flat rate must continue to be paid. These protections will apply until the employee returns to work, reaches the 28-week SSP entitlement limit or their employment terminates. Accurate record keeping between now and April 2026 will be essential to ensure employees are treated consistently and correctly.
What do the Reforms Mean for Employers?
The widened eligibility and day one payment requirement will increase SSP cost exposure for many employers. There will also be greater complexity in payroll calculations, and absence management processes will need tightening as even short periods of sickness will now generate statutory payments. Employers should expect an increase in administrative workload and the need for more robust documentation and reporting.
Sean continues: “In preparation for April 2026, employers should be reviewing employment contracts and sickness policies to remove any references to waiting days or earnings thresholds. Payroll software must be updated to ensure compliance with day one SSP, variable earnings calculations and transitional protection cases.
“Managers should be trained on how the new rules apply in practice, particularly in relation to short term absences and phased returns following illness. Enforcement and dispute handling for SSP will also move to the newly created Fair Work Agency, raising the importance of having accurate processes from the outset.”
How Burgis & Bullock Can Support You
The SSP reforms are more than an HR update; they are a financial, operational and compliance issue that senior management teams should address early.
Burgis & Bullock is already working with clients to review and update sickness policies, assess payroll readiness, forecast SSP costs, and advise on transitional cases. We also support internal communications to ensure managers and employees understand what the new SSP regime means for them.
Businesses that prepare well in advance of April 2026 will minimise disruption, remain compliant and manage rising SSP costs more effectively. If you would like help reviewing your processes or ensuring your payroll systems are ready, our team is here to support you. www.burgisbullock.com/contact-us
