Statutory Sick Pay Changes 2026/27 — What Small Employers Need to Know

What changed from 6 April 2026

Two changes to Statutory Sick Pay (SSP) took effect under the Employment Rights Act reforms from 6 April 2026, and both increase the cost and administrative load on small employers.

The three-day waiting period is gone. Previously, employees only qualified for SSP from the fourth day of sickness absence. From 6 April 2026, SSP is a day-one entitlement — employees are paid from the first qualifying day they are off sick.

The Lower Earnings Limit no longer applies. Previously, employees earning below the Lower Earnings Limit did not qualify for SSP at all. That threshold has been removed, so effectively all employees are now eligible regardless of how little they earn, subject to the standard percentage-of-earnings rule.

The 2026/27 rate

The weekly rate of SSP for 2026/27 is £123.25, or 80% of the employee's average weekly earnings, whichever is lower. This is paid for each qualifying day the employee is off sick, up to 28 weeks in any period of incapacity for work.

If an employee works, say, 5 qualifying days a week, the daily rate works out at £24.65 — so one day off sick now costs a small employer roughly £24.65 that it would not have paid at all under the old three-day rule.

Who pays for it

Statutory Sick Pay is not recoverable from HMRC. Unlike statutory maternity, paternity, adoption, and parental bereavement pay — where employers can reclaim 92% or 109% depending on their National Insurance bill — SSP is an employer cost in full. Budgeting for it matters more now that it applies from day one.

What this means in practice for a small business

If you employ even one or two people, the practical impact is:

• More sickness absences will trigger a payment. A single day off that previously cost nothing now costs the daily SSP rate.
• Your payroll software needs to be current. Most cloud payroll tools (Xero Payroll, QuickBooks Payroll) have already been updated for the 2026/27 rules — check your provider has applied the change rather than assuming it happened automatically.
• Record-keeping matters more. You still need to record the reason for absence and the dates covered, in case of a dispute or an HMRC compliance check.

What to check now

• Confirm your payroll software is applying SSP from day one, not day four, for any absence starting on or after 6 April 2026
• Update any staff handbook or sickness policy that still references the old three-waiting-day rule
• Build the increased likely SSP cost into your staffing budget, particularly if you employ several part-time or lower-earning staff who were previously excluded by the Lower Earnings Limit

If you are not sure whether your current payroll setup reflects the 2026/27 rules correctly, this is worth checking before your next pay run rather than after.