The Employment Rights Act 2025 introduces significant reforms to Statutory Sick Pay (SSP), coming into force from 6 April 2026. These changes will have a direct impact on how SSP is calculated, who qualifies, and how quickly payments begin.
For employers, this represents an important shift in both payroll processes and absence management.
Removal of waiting days
Under the current system, SSP is only payable after three “waiting days”. From April 2026, this will be removed.
This means employees will be entitled to SSP from the first day of sickness absence, increasing both employer costs and the importance of accurate absence recording from day one.
Expanded eligibility
The lower earnings limit will be abolished, meaning all employees will be eligible for SSP, regardless of how much they earn.
This is a notable change, particularly for employers with part-time, casual or lower-paid workers who may not previously have qualified.
New calculation method
SSP will now be calculated using a new approach:
- 80% of the employee’s normal weekly earnings, or
- The statutory flat rate (set to be £123.25 from 6 April 2026)
Whichever of these two figures is lower will apply.
This introduces a more tailored calculation but also adds complexity, requiring employers to ensure payroll systems can accurately determine the correct entitlement.
Supporting guidance and resources
To help employers prepare, the Department for Work and Pensions has published technical guidance on the transitional arrangements for implementing the SSP reforms.
This guidance includes practical examples covering different scenarios, helping employers understand how to calculate SSP correctly under the new rules.
Further information is also available via the Chartered Institute of Payroll Professionals.
Webinar and further support
We recently hosted a webinar covering the SSP reforms in detail. You can now:
- Watch the session on demand
- Access the presentation slides
- Review our frequently asked questions
These resources provide practical insight into how the changes will affect your organisation and what steps you should take to prepare.
Final thoughts
The upcoming SSP reforms represent one of the most significant changes to sickness absence pay in recent years.
With payments starting from day one, expanded eligibility, and a new calculation method, employers should act now to:
- Review and update absence policies
- Ensure payroll systems are configured correctly
- Train managers on the new rules and implications
Taking early action will help ensure compliance and minimise disruption.
