Employment Rights Act 2025: changes to statutory sick pay from April 2026

Significant reforms to statutory sick pay are coming into force on 6 April 2026. This insight provides an overview of the changes and the implications for employers.

Changes to statutory sick pay

The changes to statutory sick pay (“SSP”) coming into force from 6 April 2026 are as follows:

• The current three-day waiting period will be removed and SSP will become payable from day one of sickness absence. The UK Government believes that this will help phased returns to work as employees will be entitled to SSP for each day not worked due to sickness. For example, if someone who normally works five days a week returns to work on an initial three-day a week basis, they will be entitled to SSP for the other two days per week.
• Employees earning below the lower earnings limit (currently £125; increasing to £129 from April 2026) will be eligible for SSP. The Government estimates that this will result in 1.3 million additional employees qualifying for SSP.
• SSP will be payable at either the statutory flat rate or 80% of normal weekly earnings, whichever is lower. The flat rate is currently £118.75 and is set to rise to £123.25 from April 2026. Normal weekly earnings will usually be calculated as an average over the eight-week period before the period of sickness absence.

Transitional provisions will apply to any employee already receiving SSP before 6 April 2026 who, due to their earnings level, would otherwise see their SSP entitlement reduce when the new rules come into force. In this case SSP will continue at the uprated flat rate during any period of continuous sickness absence. It is being reported that this protection will apply until the employee returns to work (and does not have a further linked period of sickness); the employee exhausts their 28-week entitlement; the contract ends; and / or the employee is excluded from SSP due to pregnancy.

Further to this, the Fair Work Agency (“FWA”) will be created in April 2026. Once the FWA’s powers take effect, the FWA will have powers in respect of enforcing SSP payments.

Implications of the changes

The changes being brought into force will have significant implications for employers. The broadening eligibility will increase costs and require employers to process SSP payments more frequently through their payroll systems.

The Government estimates that removing the three-day waiting period and lower earnings limit will cost £450 million annually, amounting to around £15 per employee. It believes that the changes will support employees to “take the time off they need to recover by providing better financial security, whilst also limiting the costs to businesses and reducing the spread of infectious diseases.”

Steps employers can take to prepare

To prepare for the changes employers should consider the following:

• Audit your sickness absence levels and consider any short-term trends.
• Consider whether any adjustments to your payroll system are required to accommodate these changes, or liaise with your payroll provider to ensure their system is updated.
• Review contracts of employment and sickness policies to remove any references to the three-day waiting period and lower earning limits in respect of SSP. If there is an equivalent waiting period in a company sick pay policy, consider whether to maintain or remove it.
• Assess the impact of the new rate of payment – is 80% of normal weekly earnings less than the flat rate of SSP for any of your employees?
• Assess the financial implications of these changes and adjust any budgets accordingly.
• Communicate the changes to your employees.

More information

To keep up to date with all the reforms in the Employment Rights Act 2025 see our Employment Rights Act page and timeline.

We are also running an Employment Rights Act webinar series, where we will be hosting 30-minute webinars over the coming months providing practical guidance on key aspects of the Act. The next session will cover Trade unions - key changes and actions for employers on 27 August 2026. Further details and a link to register can be found here.

Workbox by Brodies

Workbox by Brodies, our HR and employment law site, has detailed information and resources covering the full spectrum of HR issues, including guidance pages on Sick Pay and the Employment Rights Act 2025 - preparatory steps. To arrange a short demo, please get in touch.