The Government has announced the new statutory payments rates for April 2026, and if you’re thinking this is just another routine annual increase, think again. While most of the changes follow the expected CPI rise, there’s a fundamental shift happening with Statutory Sick Pay that could significantly impact your payroll costs.
If you employ part-time workers, people on variable hours, or have staff who take the odd day or two off sick, you need to pay attention.
The headline numbers from 6 April 2026
Statutory Sick Pay rises to £123.25 per week, up from £118.75. But that’s just the start of the SSP story.
All family-related payments increase to £194.32 per week, up from £187.18. This covers:
- Statutory Maternity Pay
- Statutory Paternity Pay
- Statutory Adoption Pay
- Statutory Shared Parental Pay
- Statutory Neonatal Care Pay
- Statutory Parental Bereavement Pay
The Lower Earnings Limit for qualifying for most statutory payments increases to £129 per week, up from £125.
These increases reflect a 3.8% rise in line with CPI, so nothing unexpected there. The devil, though, is absolutely in the details.
The fundamental SSP changes coming in April
The Employment Rights Bill is bringing in major reforms to SSP. These changes could have a real impact on your payroll costs, particularly if you have part-time workers, people on variable hours, or high levels of short-term absence.
SSP from day one
Currently, employees only get SSP from the fourth day of sickness. From April 2026, SSP kicks in from the first day someone is off sick. If you’ve got staff who tend to take the odd day or two off here and there, your SSP bill is about to go up.
No more Lower Earnings Limit
Right now, if someone earns less than £125 a week (soon to be £129), they don’t qualify for SSP at all. That threshold is being scrapped. SSP will become payable to all employees, regardless of what they earn.
New calculation for low earners
Here’s the bit that could catch you out. For anyone who would have earned below the old threshold, SSP won’t automatically be the flat rate of £123.25. Instead, it’ll be calculated as whichever is lower:
- 80% of their average weekly earnings, or
- The standard £123.25 rate
So, if someone earns £100 a week, their SSP would be £80 (80% of £100), not the full £123.25.
What this means for your business
If you employ lots of part-time or casual workers, this is going to cost you more. You’ll be paying SSP to people who previously wouldn’t have qualified at all, and you’ll be paying it from day one rather than day four.
But, if you’re eligible for Employment Allowance (now worth up to £10,500 a year), that can help offset some of these increased costs.
It’s also worth remembering that SSP is no longer recoverable through the PAYE system. This changed a few years back, so employers must carry the full cost.
Family-related payments
The increases to maternity, paternity, adoption and other family payments are straightforward enough. The weekly rate goes up to £194.32 for weeks 7-39 of Statutory Maternity Pay and the equivalent periods for other payments.
Don’t forget, the first six weeks of Statutory Maternity Pay are still paid at 90% of the employee’s average weekly earnings with no cap. Only weeks 7-39 use the flat rate (or 90% if that’s lower).
Also worth remembering, from April 2024, fathers and partners can split their two weeks of paternity leave into two separate one-week blocks rather than taking them consecutively. That flexibility continues, so make sure your line managers know about it.
What you need to do now
This isn’t one of those situations where you can deal with it when April arrives. You need to be ready.
Update your payroll software
Check with your payroll provider or software supplier that they’re updating their systems to handle the new SSP rules, particularly the 80% calculation for low earners. If you run payroll in-house, make absolutely sure your software is up to date before the first April pay run.
Budget for the impact
Model what the SSP changes will cost you. If you’ve got high short-term absence rates or lots of part-time staff, the impact could be significant. Run some scenarios based on your actual absence patterns from the last year.
Review your contracts and policies
If any of your employment contracts reference specific SSP terms, like “payable from the fourth day,” you’ll need to update them. Your absence policies will need refreshing too.
Brief your managers
Make sure anyone who handles absence reporting understands that SSP now applies from day one and that more employees will qualify. There’s nothing worse than a line manager giving incorrect information to a worried employee.
Check your Employment Allowance
If you’re eligible for Employment Allowance, make sure you’re claiming it. It’s now worth up to £10,500 a year, which can help offset the increased payroll costs you’ll be facing.
April will be here before you know it
The SSP reforms are the most significant changes to sick pay rules in decades. More people will qualify, payments start earlier, and low earners get proportional rates rather than nothing at all.
For most businesses, this means higher sickness absence costs. But it also means a fairer system that supports more of your workforce when they’re unwell.
The key is being prepared. Don’t wait until April to find out your payroll system can’t handle the new calculations or to discover you’ve underestimated the cost impact.
Get ahead of it now, and April will be just another month-end rather than a payroll panic.
