If you still run your payroll on the old three-waiting-days rule, you have been overpaying or underpaying staff since April. The biggest change to Statutory Sick Pay (SSP) in over a decade took effect on 6 April 2026, and it is already live in this tax year.
TL;DR: From 6 April 2026, SSP is payable from the first qualifying day of sickness, the lower earnings limit is removed, and the rate is the lower of £123.25 a week or 80% of average weekly earnings. Employers cannot reclaim it, so the cost lands on you.
What Changed for Statutory Sick Pay in April 2026?
Three things changed at once under the Employment Rights Act 2025, all from 6 April 2026. SSP now starts on day one of sickness rather than day four. The lower earnings limit that used to exclude low earners is gone. And the amount is now the lower of £123.25 a week or 80% of the employee's average weekly earnings.
The reform brings around 1.3 million more workers into SSP eligibility (Employment Rights Act 2025 SSP factsheet, 2026). The government estimates the changes add roughly £450 million a year to employer SSP costs, about £15 more per employee. For a small team, that adds up quickly across a winter of seasonal illness.
Day One Pay: The Waiting Period Is Gone
The three unpaid waiting days are abolished. SSP is now payable from the first qualifying day an employee is too ill to work, provided the other conditions are met (GOV.UK: Statutory Sick Pay, 2026).
Under the old rules, an employee needed four or more consecutive sick days to form a period of incapacity for work, and the first three were unpaid. That waiting period is removed. In our experience this is the change payroll software handled automatically at the April update, but manual or spreadsheet-based payrolls are the ones still getting it wrong. If you process sick pay by hand, check that your first paid day is day one, not day four.
How Much Is SSP in 2026-27?
SSP is the lower of two figures: £123.25 a week, or 80% of the employee's average weekly earnings. The flat rate rose from £118.75 in 2025-26 (Acas: Statutory Sick Pay, 2026). It is still payable for up to 28 weeks.
The 80% calculation is the part that catches employers out. Average weekly earnings are worked out over the eight weeks of pay before the sickness began. A lower earner can now receive less than the headline rate, and that is by design.
- An employee earning £500 a week: 80% is £400, so the £123.25 cap applies and they receive £123.25.
- A part-timer earning £140 a week: 80% is £112, which is below the cap, so they receive £112.
- Someone earning £100 a week, who used to get nothing: 80% is £80, so they now receive £80.
Who Qualifies for SSP After the Lower Earnings Limit Was Removed?
Every employee who is off sick now qualifies, regardless of how little they earn. The old lower earnings limit of £125 a week for 2025-26 has been scrapped, so part-time and low-paid staff are no longer locked out (CIPP, 2026).
The employee must still be classed as an employee, be off sick, and tell you within your notification deadline. What we see most often is confusion among hospitality, retail and care employers with large part-time rotas, because those are exactly the workers the old limit excluded. If your absence policy still references a minimum earnings threshold for sick pay, it is out of date and needs rewriting.
Can Employers Reclaim SSP From HMRC?
No. There is no mechanism to recover SSP from the government. The Percentage Threshold Scheme, which once let employers reclaim SSP above 13% of their monthly National Insurance bill, was abolished in April 2014 (House of Commons Library, 2025).
The temporary COVID-19 rebate for small employers closed in March 2022 and has not returned. So the full day-one cost sits with you. For a business already absorbing the higher National Living Wage and employer National Insurance changes, sick pay is one more line that has quietly grown. This is where cash flow planning matters, and it pairs with the wider squeeze we covered in our cash flow guide for UK small businesses.
Your Payroll and Policy Checklist
Start with your payroll settings, then your policies. Confirm your software is paying from day one and applying the 80% test alongside the flat-rate cap. Update your sickness absence policy and any staff handbook that still mentions waiting days or a minimum earnings threshold.
One question clients always ask is whether they can offer enhanced contractual sick pay instead. You can, as long as it is at least the statutory minimum. Keep records of qualifying days, linked periods (two absences within 56 days count as one), and average weekly earnings calculations, because these are the figures HMRC will want if a claim is queried. If you run benefits or settlement agreements alongside payroll, our notes on PAYE Settlement Agreements and the Employment Allowance are worth a read for the full employer picture.
Frequently Asked Questions
When did the new SSP rules take effect?
The changes took effect on 6 April 2026 under the Employment Rights Act 2025. They apply to qualifying sickness absences from that date. A continuous absence that began before 22 September 2025 does not become eligible under the new rules.
What is the SSP rate for 2026-27?
SSP is the lower of £123.25 a week or 80% of the employee's average weekly earnings, payable for up to 28 weeks. The flat rate rose from £118.75 in 2025-26.
Do employees still need to be off for four days to get SSP?
No. The four-day waiting period is gone. SSP is payable from the first qualifying day of sickness, as long as the employee meets the other conditions and notifies you in time.
Does a low-paid part-timer now get full SSP?
They qualify, but the amount is the lower of £123.25 or 80% of their average weekly earnings. So a part-timer earning £140 a week would receive £112, not the full flat rate.
Can a small employer claim SSP back?
No. There has been no SSP rebate since the Percentage Threshold Scheme ended in April 2014. The cost falls entirely on the employer, which is why the day-one change has a real impact on payroll budgets.
If you are not sure your payroll is applying the day-one rules and the 80% calculation correctly, talk to our team. We will review your SSP setup, check your sickness absence policy, and make sure your records would stand up to an HMRC query.