From 6 April 2026, significant changes to Statutory Sick Pay (SSP) will take effect under the Employment Rights Act 2025.

These reforms will widen eligibility, change how SSP is calculated, and increase the likelihood of additional cost for many employers — particularly those with part-time, low-paid, or zero-hour workers.

Here’s what you need to know.

Key Changes from 6 April 2026

1. Removal of the Lower Earnings Limit

Currently, employees must earn at least the Lower Earnings Limit (LEL) to qualify for SSP.

From April 2026, this earnings threshold will be removed.

This means:

• Employees earning below the previous threshold will now qualify.
• More part-time and zero-hour workers will become eligible for SSP.
• Employers may see an increase in SSP claims.

2. SSP Payable from Day One

Under current rules, SSP is only payable from the fourth qualifying day of sickness absence (after three waiting days).

From April 2026:

• Waiting days are abolished.
• SSP will be payable from the first qualifying day of absence.

This change will increase SSP costs, particularly for short-term sickness absences.

3. New SSP Calculation Method

Instead of a flat weekly rate only, SSP will be calculated as the lower of:

• 80% of the employee’s average weekly earnings,

or

• £123.25 per week (the new flat rate from April 2026)

This means SSP will now vary depending on earnings.

For higher earners, SSP will likely remain at the flat weekly rate.

For lower earners, SSP may be less than the flat rate because it is capped at 80% of their average earnings.

How to Calculate SSP Under the New Rules

Step 1: Calculate Average Weekly Earnings (AWE)

This is typically based on the employee’s relevant earnings period before sickness begins (normally the previous 8 weeks, aligned with existing AWE rules).

Include:

• Basic pay
• Overtime (if paid)
• Commission
• Bonuses

Step 2: Calculate 80% of AWE

Step 3: Compare to £123.25

Pay the lower of:

• 80% of AWE

• £123.25

SSP for Zero-Hour and Irregular Hours Workers

This is where many employers will see the biggest impact.

Are zero-hour workers eligible?

Yes — if they meet the definition of an employee, they can qualify for SSP.

From April 2026:

• There is no minimum earnings threshold.
• Waiting days are removed.
• SSP will be payable from day one.

How do you calculate SSP for zero-hour workers?

For workers with irregular hours or pay:

• Calculate their Average Weekly Earnings (AWE) over the relevant reference period (usually the previous 8 paid weeks in which they earned pay).
• Calculate 80% of that average weekly amount.
• Compare to £123.25 and pay the lower figure.

Example:

A zero-hour worker earned over the last 8 weeks:

£300, £250, £200, £350, £300, £280, £320, £300

Total = £2,300

Average weekly earnings = £287.50

80% of £287.50 = £230

Since £230 is higher than £123.25, SSP would be capped at £123.25 per week.

Lower-paid example:

If average weekly earnings were £120:

80% = £96

In this case, SSP would be £96 per week, not £123.25.

Contract Review & Working Patterns – A Key Planning Point

One area that is often overlooked is how SSP is allocated across working days.

Although SSP is calculated as a weekly entitlement, it is stillpaid on a daily rate basis, depending on an employee’s qualifying days.

For employees who work a standard five-day week, this is usually straightforward.

However, for part-time, zero-hour or irregular workers, the number of agreed working days per week can have a significant financial impact.

We strongly recommend that employers consider:

• Reviewing employment contracts

• Agreeing a usual working pattern (for example, 3, 4 or 5 days per week) with each employee
• Documenting that agreement clearly in writing

Why does this matter?

SSP is only payable for qualifying days.

If there is a clearly agreed working pattern (for example, 3 days per week), the weekly SSP entitlement is divided across those 3 qualifying days.

If no agreement exists and the working pattern is completely irregular, the default position is to divide the weekly SSP across 7 days per week.

In some cases, this can result in:

• A higher daily rate being payable
• More SSP being paid than the employer may have anticipated

Having a documented working pattern reduces uncertainty, supports consistent payroll processing, and helps prevent unintended additional SSP cost.

Transitional Rules

Special transitional arrangements apply where employees are already off sick around 6 April 2026.

Depending on individual circumstances:

• Employees previously below the earnings threshold may become newly eligible.
• Employees already receiving SSP may remain on the previous flat-rate calculation for the remainder of that sickness absence.
• Linked periods of sickness will need careful review.

These rules are technical and will depend on individual circumstances.

What This Means for Employers

You should prepare for:

• Increased SSP costs
• More employees qualifying
• Greater variability in SSP payments
• Increased payroll complexity
• Greater importance of accurate sickness reporting

Businesses with:

• Part-time staff
• Casual workers
• Zero-hour contracts
• Lower-paid employees

are likely to see the biggest financial impact.

Things all businesses need to consider.

• Update payroll systems in line with the new legislation
• Apply transitional rules where required
• Ensure SSP is calculated correctly based on earnings data
• Ensure you understand cost implications

Whether your payroll is operated ‘in-house’ or by a payroll provider, we recommend ensuring sickness absence information is provided promptly and accurately so payroll can be processed correctly.

If you would like help modelling the potential cost impact of these changes on your workforce, please contact our team.

Official References

These changes are based on UK legislation and official government guidance, including:

• Employment Rights Act 2025
• Statutory Sick Pay Regulations (as amended from 6 April 2026)
• Department for Work and Pensions (DWP) employer factsheets
• HMRC Statutory Payments Manual and GOV.UK employer guidance

Employers should refer to GOV.UK for the most up-to-date statutory rates and detailed technical guidance.

Blog by James Goulsbra – For more information get in touch here.

GTA Accounting is a modern, innovative accounting firm based in Petersfield and working with clients nationwide. We combine expert financial strategy with the latest technology to give business owners clarity, control, and confidence. We’re accountants, yes – but we’re also innovators, and believers. We use our accounting knowledge to provide systems and strategies to give businesses an edge. Our forward-thinking team uses data, insight, and innovation to simplify complex tax and accounting challenges – helping you save time, protect profit, and make smarter decisions for sustainable growth.