Statutory Sick Pay is changing: Here is what you need to know

Statutory sick pay (SSP) will go under significant reform in April 2026, with a series of changes to be introduced that will impact your company’s payroll.

With less than six months until the changes take effect, it’s essential that you understand what is going to change and how that will affect your payroll procedures.

What are the significant changes?

Under current regulations, SSP only applies after three qualifying days of absence and for employees earning a minimum of £123 per week.

However, in April 2026, SSP will apply to the very first day of sickness absence and be available to all employees regardless of how much they earn.

There is also a new calculation measurement in place where employees will receive either 80 per cent of their average weekly earnings or the flat rate of £118.75 a week.

How do businesses feel about the changes?

With less than six months to go, the Chartered Institute of Payroll Professionals (CIPP) recently conducted a survey and asked business owners how they felt about the upcoming SSP changes.

47 per cent said the changes won’t impact their business, with many citing they already pay above the current and upcoming figures in place.

However, 22 per cent expressed their concerns about the upcoming reform, largely because their costs are expected to increase.

Rising costs as part of the SSP reform is arguably the biggest worry for business owners and many will be looking ahead and preparing for the future.

What do these changes mean for a company’s payroll?

With SSP, applying from the first day and available to all employees, your costs are likely to increase and your payroll system needs to be robust enough to manage the SSP changes.

Your procedures will need to be strong enough to accommodate the inclusion of all staff who qualify for SSP.

The rising costs will have a profound impact on your budget as you will need to put additional measures in place to meet the regulations.

SMEs are more likely to feel the effects quite heavily because they may employ part-time and seasonal workers to support their business, but with the changes to come, they must implement a payroll structure that fulfils those requirements.

It is also important to note that any changes to the National Minimum Wage (NMW) and National Living Wage (NLW) will likely take effect at the same time, meaning your payroll process must be able to handle significant reform all at once.

What can be done ahead of time to prepare?

As noted above, many business owners are concerned about SSP reform but there are things you can do ahead of time to ensure your company is ready, including reviewing your budget.

You may be in the process of organising your finances and preparing for the new financial year and this gives you an ideal opportunity to analyse your current position, spot where funds can be found to manage the increased SSP costs and budget effectively.

You also need to check your current payroll system and update your SSP policies to align with the Government’s changes.

The HR and payroll procedures you have in place need to give you assurance that they can manage the immediate changes and accommodate all members of your team.

These measures will also include updating your employees’ contracts and any handbooks to reflect exactly what they will be entitled to.

Your plans should also include speaking with payroll experts

It is essential you plan ahead of time with the changes set to take immediate effect from April and your business and procedures need to be ready and we can support with that.

If you are concerned about the SSP reform, we are here to advise and guide you by building your understanding of the changes and helping you check your current payroll procedures and systems.

Planning ahead of time means the transition for you and your team will be simpler and we’ll give you everything you need to ensure you are ready.

For support analysing your payroll system, get in touch with our team.