The UK Government introduced significant reforms to the Statutory Sick Pay (SSP) system on 6 April 2026. These changes fundamentally aim to extend SSP eligibility to a wider range of workers and improve how payments are calculated in line with the Employment Rights Act 2025. To ensure smooth workplace management, employers and HR teams need to be fully aware of the new rules.
What Has Changed Under the SSP Scheme?
Under the previous SSP rules, low-income workers were unable to benefit from SSP, and payments only started from the fourth day of sickness absence. However, these rules have been reshaped since April 2026.
The key changes include:
- Removal of the Lower Earnings Limit (LEL)
- Abolition of waiting days
- Introduction of a new SSP calculation method
These reforms are expected to provide greater financial protection for low-income and part-time workers.
Removal of the Lower Earnings Limit (LEL)
One of the most significant updates is the abolition of the Lower Earnings Limit (LEL). While the scheme previously excluded low-earning workers, the updated regulations now ensure that anyone meeting the core criteria qualifies regardless of income.
This expanded protection covers full-time, part-time, and agency workers paid through PAYE, offering vital support to those with irregular hours.
To help businesses navigate these changes, here are the key SSP eligibility criteria for employers to note:
- Are employed through PAYE
- Have commenced employment
- Are absent from work due to illness on at least one qualifying day
Abolition of Waiting Days
Another major change is the removal of the SSP waiting days requirement. While SSP was previously not payable for the first three days of sickness absence, it is now payable from the very first day of illness. Consequently, employers must assess an employee’s eligibility immediately upon receiving a sickness report and ensure this instant coverage is correctly reflected in the payroll.
New SSP Calculation Method
The method for calculating SSP has also been updated. The weekly SSP amount is now capped based on the employee’s earnings. Specifically, employees must receive whichever is lower:
- 80% of their Average Weekly Earnings (AWE), or
- The statutory flat rate of £123.25 per week.
Employers should ensure their payroll software is adapted to compare these two figures automatically.
Example
Assume Employee A has Average Weekly Earnings (AWE) of £254.2 per week.
- 80% of AWE = £203.36
- Statutory SSP rate = £123.25
Since £123.25 is the lower amount, Employee A’s SSP entitlement would be £123.25 per week.
4 Key Areas Employers Should Review with Their Adviser
Given the sweeping regulatory changes and revised calculation methods, employers are strongly encouraged to review the following operational areas with their payroll or employment adviser:
- Update SSP Eligibility Procedures
The removal of the Lower Earnings Limit (LEL) means earnings thresholds no longer dictate eligibility. The internal SSP procedures must be updated to ensure no eligible worker is missed.
- Implement “Day One” Sick Pay
With waiting days officially abolished, payroll systems must be adapted to calculate and apply SSP immediately from the very first day of an employee’s sickness absence.
- Apply the New Calculation Formula
Payroll teams must calculate 80% of a worker’s Average Weekly Earnings (AWE) and compare it against the statutory rate (£123.25/week), ensuring the lower amount is processed.
- Audit Payroll Software Compatibility
Confirm with providers that your software automatically reflects these new rules. System updates may be urgently required to avoid calculation errors and compliance risks.
The SSP reforms introduced on 6 April 2026 represent a significant step towards strengthening worker protections in the UK. The removal of the Lower Earnings Limit and the introduction of SSP payments from the first day of sickness absence mean that more workers will benefit from income protection during periods of ill health.
For employers, particularly SMEs, it is important to ensure that payroll systems, sickness absence policies, and internal procedures are fully aligned with the new regulations.
If you would like to review your current payroll processes or confirm that your SSP procedures comply with the latest legislation, seeking professional advice can help ensure your business remains compliant and operates smoothly.