If you run payroll and haven't looked closely at Statutory Sick Pay since the spring, you're probably still costing absence the old way. That's a problem, because the rules changed on 6 April 2026 and the change wasn't small.
Two things happened at once. The three waiting days disappeared, so SSP is now payable from the very first day of sickness. And the lower earnings limit was scrapped entirely, meaning every employee qualifies regardless of how little they earn. Previously, anyone under roughly £125 a week got nothing at all. Now they get something from day one, calculated as 80% of their average weekly earnings or the flat rate of £123.25, whichever is lower.
For a business with a handful of part-time or low-hours staff, that's not a rounding error. A single day of unplanned absence that used to cost you nothing can now cost real money, and it starts accruing the moment someone rings in sick rather than after three days have passed. Care providers, retailers and hospitality employers with large casual workforces will feel this hardest, because low earners are exactly the group the old rules excluded.
There's a transitional wrinkle worth knowing. If an employee was already receiving SSP under the old lower earnings limit rules before 6 April 2026 and is still off sick, they continue on the uprated flat rate until that spell of absence ends, rather than being moved onto the new day-one rules mid-claim.
Here's what to check before your next sickness absence lands on your desk.
- Payroll system updated to the new £123.25 flat rate and the 80% average weekly earnings comparison
- Absence policy rewritten to remove any reference to waiting days or a minimum earnings threshold
- Short-term absence triggers reviewed, since day-one pay can change how quickly patterns emerge
- Return-to-work interview process refreshed so managers know what's changed
- A revised absence cost forecast for the rest of the tax year, particularly if you employ a lot of part-time or zero-hours staff
- A short staff communication explaining the new entitlement, so people understand what they're owed and when
Most of the SME clients we speak to assumed this was a minor payroll tweak. It isn't. It changes the economics of short-term absence for good.
If you want a second pair of eyes on your absence policy and payroll process before the next flu season hits, call Neathouse Partners on 0333 041 1094 or visit neathousepartners.com to book a fixed-fee policy review.
For further reading check out Managing Long Term Sickness
