Statutory Sick Pay in 2026: What Changed, and What Employers Still Get Wrong

Statutory Sick Pay changed on 6 April 2026, and the changes were substantial.

Three important reforms took effect under the Employment Rights Act 2025: the three waiting days were removed, the Lower Earnings Limit was abolished for SSP purposes, and a new earnings-linked rate was introduced for lower-paid employees.

The first full quarter under the new rules has now passed. If your payroll system was updated before April and has been working correctly since, this article should serve as a useful check.

If you are not certain how your system is calculating SSP — particularly for lower-paid, part-time or variable-hours employees — it is worth checking now rather than discovering the problem when an employee queries their pay.

What actually changed

Waiting days are gone

Under the old rules, the first three qualifying days of a period of sickness were normally unpaid waiting days.

Since 6 April 2026, SSP has been payable from the first full qualifying day of sickness absence.

There is no longer a three-day waiting period.

This sounds like a simple payroll change, but it has an immediate effect on short absences. An employee who is off sick for only one or two working days may now be entitled to SSP when, under the old rules, no payment would ordinarily have arisen.

The Lower Earnings Limit is gone

Before 6 April 2026, an employee generally needed average weekly earnings of at least £125 to qualify for SSP.

That earnings threshold has now been removed.

This means an otherwise eligible employee can qualify for SSP regardless of how low their earnings are.

The government estimated that up to 1.3 million lower-paid employees would gain access to SSP as a result.

The calculation is now earnings-linked

For the 2026/27 tax year, the weekly rate of SSP is the lower of:

• 80% of the employee's average weekly earnings; or
• £123.25.

For employees earning more than approximately £154 a week, 80% of their average weekly earnings will normally exceed £123.25, so the statutory weekly rate applies.

Lower earners receive 80% of their average weekly earnings instead.

For example, if an employee's average weekly earnings are £140:

80% × £140 = £112

The employee's weekly SSP rate is therefore £112, because this is lower than £123.25.

For absences of less than a full week, the appropriate weekly rate must then be converted into a daily rate according to the employee's qualifying days.

What this costs employers

The government's impact assessment estimated that removing the waiting days and Lower Earnings Limit, together with the new percentage rate, would increase the annual cost of SSP to businesses by around £450 million.

That works out at roughly £15 of additional SSP cost per employee on average.

But averages hide the distribution.

Businesses employing mostly full-time staff on salaries comfortably above the SSP threshold may see relatively little difference.

Employers with significant numbers of:

• part-time staff;
• lower-paid employees;
• casual or variable-hours staff; or
• employees with frequent short-term sickness absence

may see a greater impact.

For many small employers, however, the bigger risk is not the additional SSP itself.

It is getting the administration and payroll calculation wrong.

Where employers can get it wrong

The three-day waiting rule is still in the system

This is the first thing to check.

If your payroll system is still configured not to pay SSP for the first three qualifying days of an absence, employees are being underpaid.

Do not assume that installing a payroll software update automatically changed every SSP setting.

Run a test.

Process a short sickness absence beginning after 6 April 2026 and confirm that SSP is calculated from the first full qualifying day.

The old earnings threshold is still being applied

The second obvious risk is an old Lower Earnings Limit filter.

A payroll system should no longer exclude an otherwise eligible employee from SSP simply because their average weekly earnings are below £125.

This is particularly important for employers with:

• part-time staff;
• casual employees;
• variable-hours workers; or
• employees with more than one job.

These are exactly the groups most affected by the change.

The lower-of-two calculation is missing

The payroll system must compare:

80% of average weekly earnings

with:

£123.25

and use the lower amount.

If the system simply pays £123.25 to every eligible employee, employees with average weekly earnings below approximately £154 may receive too much.

While an SSP overpayment is clearly different from an underpayment, it is still evidence that the statutory calculation has not been configured correctly.

Average weekly earnings are being oversimplified

SSP calculations are usually based on earnings over a relevant period of at least eight weeks.

But this should not simply be treated as "the previous eight weeks".

Broadly, the relevant period ends with the employee's last normal payday before the first full day of sickness and starts after the normal payday falling at least eight weeks earlier.

Different rules can apply where an employee:

• has only recently joined;
• has received less than eight weeks' pay;
• is paid irregularly;
• has changed pay frequency;
• receives bonuses or commission; or
• has mistimed or unusual payments.

Variable-hours employees therefore deserve particular attention.

The parts that are genuinely complicated

Linked periods still matter

Periods of incapacity for work separated by 56 days or less can be linked and treated as one period for SSP purposes.

Where periods are linked, the SSP calculation made for the first period will generally continue to apply to the later linked period.

The maximum SSP entitlement of 28 weeks also applies across a series of linked periods.

Removing waiting days has therefore not removed the need to keep an accurate sickness history.

In fact, because a period of incapacity for work can now arise from as little as one full day of sickness, short periods of absence need to be recorded correctly too.

Absences spanning 6 April 2026

This is where employers should be especially careful.

The transitional rules depend on the employee's circumstances before 6 April.

Employees already receiving SSP

Employees who were already receiving SSP before 6 April 2026 generally moved to the new £123.25 flat rate from 6 April.

There is also transitional protection for certain lower earners.

An employee who:

• earned between £125 and £154.05 a week;
• was already receiving SSP before 6 April 2026; and
• remained continuously off sick

continues to receive the £123.25 flat rate rather than being reduced immediately to 80% of their average weekly earnings.

That protection ends when the relevant continuous absence or SSP entitlement ends.

If the employee later returns to work and goes off sick again, the normal new calculation applies to the new absence, even where the periods link.

Employees previously excluded because they earned below the LEL

These cases need separate consideration.

An employee whose sickness started before 6 April 2026 but who did not qualify for SSP because their earnings were below the old Lower Earnings Limit may nevertheless have become entitled from 6 April.

For example, this can apply where the sickness absence started on or after 22 September 2025.

Different transitional treatment applies to certain earlier continuous or linked absences.

This is one area where employers should avoid trying to apply a simple blanket rule to all pre-April sickness cases.

Waiting days that fell before 6 April

Waiting days before 6 April 2026 are not retrospectively converted into paid SSP days.

There is no general back payment for waiting days already served before the reform took effect.

However, where the sickness continues on or after 6 April, qualifying days falling from 6 April onwards are dealt with under the transitional rules.

Phased returns

Phased returns also deserve closer attention under the new rules.

Before April 2026, the requirement for a period of incapacity for work to last at least four consecutive days could create difficulties where an employee alternated between working and sickness absence during a phased return.

A period of incapacity for work can now arise from one full day of sickness.

As a result, an eligible employee on a phased return may potentially receive SSP for full qualifying days on which they are unable to work because of sickness, while receiving normal pay for the days or hours they actually work.

One important limitation remains:

a day on which the employee actually works cannot normally be treated as a full SSP sickness day.

Phased-return arrangements should therefore be considered alongside the employee's agreed qualifying days, hours actually worked, contractual sick pay and any relevant fit-note recommendations.

What about the Fair Work Agency?

The Fair Work Agency was established on 7 April 2026, one day after the SSP reforms took effect.

But the two changes should not be confused.

The Fair Work Agency has been created to bring a range of labour-market enforcement functions into a single organisation. Its remit is being expanded in stages.

As at August 2026, the Fair Work Agency has not yet taken over enforcement of Statutory Sick Pay.

Government guidance says that SSP enforcement will move to the Fair Work Agency at a later stage.

For the time being, disputes about whether SSP should have been paid, or whether the correct amount has been paid, remain within the existing statutory payment dispute framework.

Employees who cannot resolve an SSP payment disagreement with their employer can contact HMRC's Statutory Payment Disputes Team.

This does not mean SSP compliance can be ignored while the new enforcement structure develops.

Employers remain legally responsible for paying the correct SSP under the current rules and should keep sufficient records to demonstrate how payments have been calculated.

SSP1 forms still matter

An SSP1 is required where an employee is not entitled to SSP or where their SSP entitlement is ending.

The deadlines matter.

If an employee does not qualify for SSP, the employer must generally provide form SSP1 within seven days of the employee's first day off sick.

Where SSP is expected to run out before the employee recovers, the form should normally be issued on or before the beginning of the 23rd week.

If SSP ends unexpectedly while the employee remains sick, the employer generally has seven days from the end of SSP to issue it.

Do not treat the SSP1 as an optional payroll document.

It enables the employee to support a claim for other benefits where SSP is unavailable or has ended.

Records

Keep enough information to show how each SSP decision was reached.

Useful records include:

• the dates of sickness absence;
• the employee's qualifying days;
• linked periods of incapacity;
• the average weekly earnings calculation;
• the relevant weekly and daily SSP rates;
• SSP actually paid;
• SSP1 forms issued; and
• relevant sickness evidence.

Employees can normally self-certify for the first seven calendar days of sickness.

A fit note can be requested once an employee has been off sick for more than seven days in a row.

What else changes for absence management?

Review sickness notification procedures

The removal of waiting days makes accurate early notification more important operationally, because SSP may be payable from the first qualifying day.

But this does not mean the statutory notification rule has simply become "tell us on day one".

Employers can set reasonable rules about when employees must report sickness. If an employer has no notification deadline, the general SSP rule allows seven days.

Your sickness policy should therefore clearly tell employees:

• who they should contact;
• how they should report an absence; and
• when notification is required.

Attendance management still matters

Paying SSP from the first qualifying day does not prevent an employer from managing sickness absence.

Return-to-work discussions, absence monitoring and attendance trigger points can still form part of an appropriate absence-management process.

They should, however, be applied fairly and consistently, with particular care where disability or reasonable-adjustment obligations may arise.

Contracts and handbooks need reviewing

Any policy still referring to:

• three waiting days;
• SSP starting on day four; or
• the £125 Lower Earnings Limit as an SSP eligibility condition

is now out of date.

Payroll procedures, staff handbooks, sickness policies and template correspondence should all be checked.

A practical checklist

1. Run a short-absence test. Confirm that SSP is calculated from the first full qualifying day.
2. Remove the old earnings filter. An otherwise eligible employee should not be excluded merely because they earn below £125 a week.
3. Check the dual calculation. Compare 80% of AWE with £123.25 and use the lower figure.
4. Check your AWE calculation. Pay frequency, irregular earnings and new starters can all affect the relevant period.
5. Review sickness cases that crossed 6 April 2026. Transitional rules mean these should not all be treated in the same way.
6. Check linked absences. Periods separated by 56 days or less may need to be linked.
7. Review phased returns individually. Separate days actually worked from full qualifying days lost through sickness.
8. Check your SSP1 process. Make sure forms are being issued within the required time limits.
9. Update your documents. Remove outdated references to waiting days and the Lower Earnings Limit.
10. Brief whoever runs payroll and manages absence. The rules are simple at headline level but more complicated once unusual work patterns and transitional cases are involved.