Statutory Sick Pay Changes in 2026: What Small Businesses Must Do Now

From April 2026, the UK’s Statutory Sick Pay (SSP) rules are changing, and small businesses must act fast to stay compliant and protect their people.

What’s Changing?

• Day-one entitlement: Statutory Sick Pay will be paid from the first day of sickness (no more three-day waiting period).

• All workers eligible: The lower earnings limit is gone. Everyone qualifies, no matter their income.

• Support for lower earners: Employees earning below the standard SSP rate will receive 80% of their average weekly earnings or a flat rate of £123.25 per week, whichever is lower.

Why Does This Matter for Small Businesses?

• Increased costs: More employees will qualify for SSP, and for longer periods. Absence rates are also likely to increase as more employees feel able to afford to take short periods of sickness absence.

• More admin: Payroll and absence tracking must be watertight.

• Compliance risks: Mistakes could mean penalties or tribunal claims.

Common Pitfalls for Small Businesses

• Unclear or outdated sickness policies

• Poor absence record-keeping

• Manager confusion about SSP rules

• Cash flow strain from day-one payments

• Miscommunication with employees about entitlements

Your Action Plan

1.      Update Your Sickness Policy

• Ensure your policy reflects the new SSP rules.

• Clearly explain eligibility, pay rates, and procedures.

• Make it easy to understand and accessible for all employees.

• If policies are contractual, consult on the proposed updated policy.

2.      Inform Your Managers

• Run an information or training session on the new rules and your process.

• Provide checklists for absence calls and documentation.

3.      Tighten Record-Keeping

• Use a simple system to track absences and payments.

• Consider whether now is the time to move from a spreadsheet to a simple online system for absence management.

• Ensure absence dates, reasons, and supporting documents are logged.

4.      Conduct Return-to-Work Interviews for All Absences

• An essential part of absence management.

• Regardless of duration, return-to-work interviews for all absences will demonstrate concern for health and safety of all employees.

• May discourage unnecessary absence from work (but meetings aren’t meant to make employees fearful about taking time off work when it is a genuine need).

5.      Budget for Higher Costs

• Forecast SSP costs based on recent absence trends.

• Plan for cash flow fluctuations.

6.      Communicate Clearly with Employees

• Share the updated policy with employees.

Questions about SSP or need tailored support? Robinson Grace HR Consultancy can help you stay compliant by reviewing and updating your policies and processes, as well as providing on-demand advice for tricky absence cases. Support your payroll and record-keeping processes. Give us a call on 01793 311937 or email clientservices@robinsongracehr.com

Frequently Asked Questions:

1. Who is eligible for Statutory Sick Pay under the new rules?

Answer: Under the new UK Statutory Sick Pay rules from April 2026, all workers will be eligible for SSP, including part time, casual, and lower paid employees. The removal of the lower earnings limit means eligibility no longer depends on weekly income thresholds. This change has a major impact on small employers, as more employees will qualify for sick pay and payments will start from day one of absence. Employers must ensure payroll systems and sickness policies clearly reflect these expanded SSP eligibility rules.

2. What should small businesses do now to prepare for the April 2026 SSP changes?

Answer: Small businesses should start preparing now for the April 2026 Statutory Sick Pay changes to avoid compliance risks and unexpected costs. Key steps include updating sickness absence policies, training managers on the new SSP rules, and improving absence record keeping. Employers should also forecast future SSP costs to manage cash flow and communicate clearly with employees about their sick pay entitlements. Early preparation will help small businesses remain compliant with UK employment law while supporting employees effectively.

3. Will the new Statutory Sick Pay rules increase costs for small businesses?

Answer: Yes, the April 2026 UK Statutory Sick Pay changes are likely to increase costs for many small businesses. Paying SSP from day one and extending eligibility to all workers means employers may face higher overall sick pay spend, particularly in businesses with variable hours or higher short term absence levels. There may also be indirect costs linked to payroll administration and absence management. To manage this, small employers should review recent absence data, forecast SSP costs, and ensure robust sickness reporting processes are in place well ahead of April 2026.

Check out other Blogs in our series:

Managing High and Persistent Employee Absence: A Guide for Small Businesses

How to Manage Mental Health Related Absences in the Workplace

How to Conduct a Successful Return-to-Work Meeting

The content of our blogs is intended for general information and not to replace legal or other professional advice.

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