Statutory Sick Pay (SSP) is set for its biggest reform in decades. From April 2026, the UK will move away from a restrictive, flat-rate system towards a more inclusive approach that covers lower-paid workers and pays from the first day of sickness.
The changes are designed to reduce presenteeism, support employee wellbeing, and close long-standing gaps in eligibility. For employers, they also bring higher costs and new administrative responsibilities.
Here is a clear breakdown of how SSP has worked historically, how it works now, and what is changing next.
History of SSP 1983 to 2024
A basic safety net with built-in limitations
Statutory Sick Pay was introduced in 1983 to ensure employees received some income when they were unable to work due to illness. It replaced a system where employers could more easily avoid paying sickness benefits.
While SSP created a consistent minimum standard, several features limited its reach:
- The first three days of sickness were unpaid, meaning short absences often received no support.
- Employees had to earn above the Lower Earnings Limit to qualify, excluding many part-time, casual, and low-paid workers.
- Until 2014, employers could reclaim some SSP costs. When this was removed, the full cost shifted permanently to employers.
During the COVID-19 pandemic, temporary changes exposed these weaknesses. SSP was paid from day one for COVID-related absences, and small employers could reclaim costs. These measures ended in 2022, returning SSP to its original structure.
The Present: 2025/26 Tax Year SSP
How SSP currently works:
As of 6 April 2025, SSP operates under the following rules:
- The weekly SSP rate is £118.75.
- Employees must earn an average of at least £125 per week to qualify.
- The first three working days (three day waiting period) of sickness are unpaid. (Unless the employee has received SSP within the previous 8 weeks.
- SSP can be paid for up to 28 weeks.
The Future of SSP: From April 2026
A wider, earnings-based system
From 6 April 2026, major reforms will come into force following the Employment Rights Bill. These changes represent a fundamental shift in how sickness absence is treated.
SSP paid from day one
The three unpaid waiting days will be removed. Employees will be entitled to SSP from the first day they are off sick.
No minimum earnings requirement
The Lower Earnings Limit will be abolished. All employees will qualify for SSP regardless of how much they earn.
This change alone is expected to extend SSP coverage to around 1 to 1.3 million additional workers, particularly part-time, casual, and zero-hours staff.
A new payment calculation on Statutory Sick Pay
SSP will move away from a single flat rate to a hybrid model. Employees will receive the lower of:
- The statutory flat rate, estimated at £123.25 per week for 2026/27
- 80 percent of their average weekly earnings
This ensures lower-paid employees receive support that better reflects their income, while still limiting overall cost exposure for employers.
Summary of the Key Changes to SSP 2025/2026
|
Feature
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2025/26
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From April 2026
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Waiting days
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First 3 days unpaid
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Paid from day 1
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Earnings threshold
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£125 per week
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Removed
|
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Payment rate
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Flat rate
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Lower of flat rate or 80 percent of earnings
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|
Coverage
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Many low earners excluded
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Around 1.3 million more eligible
|
What Employers Need to Prepare For
These reforms bring clear benefits for employees, but they also have practical implications for employers.
- SSP costs are likely to increase due to day-one payments and wider eligibility.
- Payroll calculations will become more complex with the move to an earnings-based model.
- Employment contracts, sickness policies, and staff handbooks will need updating.
- Employers will need guidance on managing sickness absences that start before April 2026 and continue after the changes take effect.
- Enforcement of Statutory Sick Pay will sit with the new Fair Work Agency, raising expectations around compliance.
Final Thoughts
The upcoming SSP reforms represent a significant shift in how sickness absence is managed. While the aim is to provide better support for employees when they are unwell, the changes also place additional responsibility and cost on employers.
For many businesses, particularly smaller employers, these reforms will require careful planning. Taking time now to review policies, prepare payroll systems, and understand the financial impact will help reduce pressure and uncertainty when the new rules take effect in April 2026.
