Preparing for the 2026 SSP Reforms: A Practical Guide for Employers

What Employers Need to Know and How AMS Group Can Support You

Significant changes to Statutory Sick Pay (SSP) are coming into force on 6 April 2026 as part of the Employment Rights Act 2025.

These reforms represent the largest overhaul of SSP in years, expanding eligibility and changing how payments are calculated. For employers, this means reviewing policies, updating payroll processes, and planning for potential cost impacts.

At AMS Group, we’re committed to helping our clients understand these changes and prepare well in advance. Below is a clear breakdown of what’s changing, what stays the same, and what practical steps employers should take now.

What is Statutory Sick Pay?

Statutory Sick Pay is the minimum level of sick pay employers must provide when an eligible employee is unable to work due to illness.

Currently, employees must meet certain conditions to qualify. These include:

• Being classified as an employee for tax purposes (PAYE)
• Earning at least the Lower Earnings Limit (LEL)
• Being sick for more than three consecutive days to create a Period of Incapacity for Work (PIW)

SSP is treated as taxable income, meaning Income Tax and National Insurance are deducted through payroll, just like regular wages.

Key SSP Changes Coming in April 2026

The government estimates that the reforms will increase employer costs by around £15 per employee per year on average. While relatively modest, the operational impact will require preparation. Remember, your contractual absence policy may rely on SSP qualification, therefore it would be sensible to review this at the same time.

Three major changes are being introduced.

1. Removal of the Lower Earnings Limit

Currently, employees must earn above the Lower Earnings Limit to qualify for SSP.

• 2025/26 LEL: £125 per week
• 2026/27 LEL: £129 per week

From 6 April 2026, this threshold will be removed entirely.

In summary, many employees who previously did not qualify will now become eligible, including:

• Lower-paid employees
• Part-time workers
• Casual staff
• Zero-hours workers

For employers, this expands the number of employees who may receive SSP.

2. A New Method for Calculating SSP

Currently, SSP is paid at a flat rate of £118.75 per week.

From April 2026, SSP will be calculated as the lower of the following two amounts:

• 80% of the employee’s Average Weekly Earnings (AWE) based on the previous 8 weeks
• The flat rate of £123.25 per week (expected to increase annually)

This approach means lower earners may receive proportionally lower SSP, while higher earners will usually receive the flat rate.

3. SSP Will Be Paid from Day One

Under the current rules, the first three days of sickness are unpaid waiting days. SSP normally begins on day four. From 6 April 2026, waiting days will be removed. This means that employees will receive SSP from the first day of sickness absence.

This change aims to reduce presenteeism- when employees come to work while unwell due to financial pressure.

However, employers may also see:

• Increased short-term absences
• More one-day sickness notifications

Managing absence policies and monitoring patterns will therefore become increasingly important.

Summary of the New Rules

Real-World Examples

Understanding how the new calculation works can help employers anticipate the impact.

Example 1: Higher Earner – Jack

Jack earns £250 per week.

• 80% of his earnings = £200
• Flat SSP rate = £123.25

Because SSP is the lower amount, Jack would receive £123.25 per week.

Example 2: Employee Above the Old Threshold – Sophie

Sophie earns £150 per week.

• 80% of earnings = £120
• Flat rate = £123.25

Sophie would receive £120 per week.

Example 3: Previously Ineligible Employee – Emily

Emily earns £100 per week, which is below the current LEL.

Previously, she would receive no SSP.

From April 2026:

• 80% of earnings = £80

Emily would now receive £80 per week in SSP.

Transitional Rules for Employees Already Off Sick

Some employees will already be part-way through sickness absence when the changes take effect.

To avoid reducing anyone’s payments, transitional protections will apply.

Employees already receiving SSP before 6 April 2026 will continue receiving the new flat rate (£123.25) for that sickness period if it would otherwise fall.

For example, David earns £130 per week and was already off sick before April 2026.

• 80% of earnings = £104
• Because he was already receiving SSP, transitional rules apply.

He will continue receiving £123.25 per week until that sickness period ends.

What Isn’t Changing?

Despite the reforms, several key SSP rules remain the same.

• Linked sickness periods –absences within 56 days are treated as one continuous period.
• Maximum SSP duration- SSP is still payable for a maximum of 28 weeks.
• Certification requirements- employees can:
  • Self-certify for the first 7 days
  • Provide a fit note from a GP or healthcare professional thereafter

Contractual sick pay

If employers offer enhanced contractual sick pay, this will remain unchanged unless employers choose to amend their policies.

What Employers Should Do Now

Preparing early will help organisations avoid disruption when the changes come into effect. We recommend all employers to:

1. Review payroll systems and ensure systems can calculate SSP using 80% of Average Weekly Earnings.

2. Update sickness absence policies referencing waiting days, SSP rates and eligibility criteria should be updated.

3. Plan for transitional cases and identify employees who may already be off sick around April 2026 and ensure payroll systems apply the correct rules.

4. Monitor absence management, as with SSP payable from day one, organisations may wish to review:

• • Reporting procedures
  • Return-to-work processes
  • Absence monitoring frameworks

Balancing Employee Wellbeing and Business Impact

The reforms aim to support healthier workplaces, particularly for lower-paid employees who may previously have felt pressure to work while ill.

Paying SSP from day one should help employees take the time they genuinely need to recover, reducing the spread of illness and supporting long-term productivity.

At the same time, employers may face:

• Increased eligibility
• Higher administrative requirements
• Additional payroll complexity

With the right preparation, these changes can be managed smoothly while supporting both employee well-being and operational stability.

How AMS Group Can Help

At AMS Group, we work closely with our clients to navigate legislative changes with confidence.

Our dedicated Payroll & Employment Tax team can support you with:

• Payroll system readiness for the new SSP calculation
• Policy and documentation updates
• Absence management guidance
• Compliance advice ahead of April 2026

If you would like support preparing for these changes, our team is here to help.

This blog was written by Michael McAllister, who is a Partner in our Payroll & Employment Tax team.