Major reforms to Statutory Sick Pay (SSP) take effect from 6 April 2026 under the Employment Rights Act 2025. Here we summarise the final transitional guidance for employers and payroll professionals, and what you should do now to prepare, reflecting the Department for Work and Pensions (DWP) v3 transitional guidance (updated 9 March 2026) and the 2026/27 uprating of SSP. Please note: some elements remain subject to Parliamentary approval.
Key changes to SSP from 6 April 2026
Removal of Lower Earnings Limit (LEL): SSP will be available to all employees, regardless of earnings, meaning 1.3 million more workers will be eligible for SSP.
SSP calculation: The payment rate of SSP becomes the lower of:
80% of Average Weekly Earnings (AWE), or
The weekly flat rate (uprated to £123.25 for 2026/27).
Waiting days abolished: SSP will be payable from day 1 of sickness, not day 4, meaning the Period of Incapacity to Work (PIW) is now one day and employees don’t have three unpaid days.
Linked periods unchanged: Absences within 56 days are treated as one continuous Period of Incapacity to Work (PIW), which is the same as the existing legislation.
Transitional protection: for certain employees already on SSP before 6 April 2026, so they are not financially worse off.
What's new/clarified in DWP v3 transitional guidance
How to calculate AWE and SSP when an employee below LEL becomes newly eligible on 6 April during an ongoing sickness (use AWE from the relevant period before their first day of sickness).
Exemptions for long, continuous sicknesses starting on or before 21 September 2025 that have already run 28 weeks by 6 April 2026 (no new SSP entitlement arises).
Treatment of employees restarting a linked period on 4–5 April 2026, including daily rate calculations that straddle the rule change.
Rounding: where a calculation yields a fraction of a penny, round up to the next whole penny for payments.
Clarified that transitional protection applies only to the continuous absence spanning 6 April (it does not extend into later linked absences after a return to work).
Q&A on backdated pay rises affecting AWE and applicability to zero‑hours and agency workers.
SSP Payment from 6 April 2026 (no waiting days required):
What will happen during the transitional period for those already on SSP?
During this transitional protection period, an employee who earns between £125.00 (increasing to £129 from 6 April 2026, pending Parliamentary approval) and £154.05 per week, and who was already receiving SSP due to sickness before 6 April 2026 - and who continues to be off sick on that date - will continue to receive flat rate SSP at the uprated amount of £123.25 for the remainder of their absence.
This would only apply to a continuous sickness absence. The transitional protection period would end when they return to work, when their SSP entitlement ends, their contract ends or the start of the exclusion period due to pregnancy begins (as set out above), whichever is soonest.
Worked Examples under new 6 April 2026 Reforms
Example 1 – Calculating 80% AWE over qualifying days (Christopher)
Christopher works 5 days a week with variable hours.
Example 2 – Linked periods where rate is held from the first PIW (Amina & Ellis)
Amina: AWE £140 → SSP £112 (80%).
Second absence within 56 days: the same weekly SSP applies (£112).
Ellis: AWE £135 → SSP £108 (80%).
Later pay rise to £165 does not change SSP for linked period;
after the 8‑week link breaks, the flat rate £123.25 applies as it is lower than 80% of £165.
Example 3 – Newly eligible below‑LEL cases from 6 April (Daniel, Maria, Priya) and long continuous case (Lewis)
Daniel: off sick 20 Mar; AWE £90 → from 6 Apr SSP £72 (80%).
Maria: pre‑6 Apr absence below LEL then linked absence from 10 Apr → SSP £88 (80% of £110) based on first PIW.
Priya: multiple linked absences from 1 Sep 2025 → from 6 Apr SSP £96 (80% of £120).
Lewis: continuous sickness from 15 Sep 2025, exceeding 28 weeks by 6 Apr → no new entitlement arises.
Example 4 – Waiting days removed and restarts on 4–5 April (Samira, George, Elizabeth)
Samira: sick from 5 Apr; from 6 Apr paid 80% of AWE (£108 where AWE £135).
George: restarted 4 Apr within a linked period;
paid at daily flat rate from 6 Apr (e.g., £24.65 where 5 QDs).
Elizabeth: restarted 4 Apr and reached 4 consecutive days;
paid at £23.75/day (2025/26 flat) for 4–5 Apr and then £24.65/day (2026/27 flat) for 6–7 Apr.
3. Transitional Protection
Employees on SSP before 6 April 2026 and still off sick will continue at the uprated flat rate (£123.25) until:
They return to work
Their SSP entitlement ends (28 weeks max)
Their contract ends
Pregnancy exclusion period begins
Example – Transitional protection for those in receipt of SSP before 6 April (Joan & Mary)
Joan: earns £125; continues at uprated flat rate £123.25 until return on 20 Apr.
Mary: earns £148; protected at £123.25 until 7 May, but if sick again after returning (e.g., 1 Jun) the new rate applies (80% of AWE = £118.40).
Employer checklist - act now
Confirm with your payroll software supplier when payroll systems will be updated for 80% vs flat rate logic and transitional edge cases will be released and tested; time is ticking now and so you should be expecting it in the 26/27 software update.
Update policies, employee handbooks and manager guidance to remove waiting days and reflect the 56‑day linking and transitional rules.
Identify employees who may qualify for transitional protection and ensure payments follow the “continuous absence” rule only.
Brief payroll teams/managers and communicate changes to staff ahead of April 2026.
If you use a payroll bureau/service, follow their cut‑over instructions for April payrolls (particularly for absences that straddle 6 April).
FAQs
Is the SSP flat rate changing on 6 April 2026?
Yes. The flat rate increases from £118.75 (2025/26) to £123.25 (2026/27). From 6 April, weekly SSP is the lower of 80% of AWE or £123.25.
How do I handle backdated pay rises that change AWE?
If there is evidence of an agreement covering the relevant period, use the agreed earnings to calculate AWE; otherwise use actuals.
Do the rules apply to zero‑hours and agency workers?
Yes. The same eligibility and calculation rules apply to those eligible for SSP, including zero‑hours and agency workers.
Need help?
Armstrong Watson’s payroll specialists can guide you through the April 2026 changes, system updates and complex transitional cases. Email help@armstrongwatson.co.uk.
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