Statutory Sick Pay changed substantially on 6 April 2026, when the Employment Rights Act 2025 removed the three waiting days, removed the Lower Earnings Limit test and introduced a new "lower of" calculation. This article explains how SSP works in the 2026 to 2027 tax year, the reform and its transitional protections, and the practical steps to run it correctly in payroll.
What is Statutory Sick Pay?
Statutory Sick Pay is the minimum amount you must pay an eligible employee when they are off work because they are unwell. It is a legal entitlement, paid by you through payroll, and it is treated as earnings, so it is subject to PAYE tax and National Insurance in the normal way. It is separate from any contractual or occupational sick pay scheme you may run, although the two interact. SSP is a safety net rather than full income replacement, so the amounts are modest compared with normal pay.
What is the SSP weekly rate for 2026 to 2027?
For 2026 to 2027 the weekly rate of SSP is the lower of £123.25 or 80% of the employee's average weekly earnings. The flat rate rose from £118.75 in 2025 to 2026 to £123.25 from 6 April 2026. For an employee earning above roughly £154.05 a week, 80% of earnings exceeds the flat rate, so they simply receive the flat £123.25. For an employee earning below that level, they receive 80% of their average weekly earnings instead.
What changed in the 2026 SSP reform?
From 6 April 2026 the Employment Rights Act 2025 made three connected changes. First, it removed the three waiting days, so eligible employees are entitled to SSP from the first full qualifying day of sickness rather than the fourth. Second, it removed the Lower Earnings Limit as an entitlement criterion, so SSP is now available to all employees regardless of earnings. Third, it introduced the new rate rule under which SSP is the lower of 80% of average weekly earnings or £123.25, so lower earners now receive a percentage of pay rather than nothing. These changes apply across Great Britain and are being replicated in Northern Ireland.
Who is eligible for SSP now?
To qualify, an employee must be classed as an employee and have done some work for you, must be off sick for the relevant period, and must tell you they are sick within your time limit (or within seven days if you have none). From 6 April 2026 there is no earnings test, so workers who earned too little to qualify before are now eligible, including zero-hours and agency workers. Some employees still cannot get SSP for specific reasons, such as already receiving Statutory Maternity Pay or Maternity Allowance, being in legal custody, or having already had the maximum 28 weeks of SSP.
How does the new "lower of" calculation work?
The weekly rate is the lower of two figures: 80% of the employee's average weekly earnings, and the flat rate of £123.25. For an employee earning at or above about £154.05 a week, 80% exceeds the flat rate, so they receive £123.25. For an employee earning below that, 80% of their average weekly earnings is lower, so they receive that percentage. For example, an employee earning £140 a week receives 80% of £140, which is £112, because that is lower than £123.25. When a payment includes a fraction of a penny, round it up to the next whole penny.
How are average weekly earnings calculated for SSP?
Average weekly earnings (AWE) are based on the employee's average earnings in the relevant period, broadly the eight weeks leading up to the last normal payday before the sickness began. Once you have the AWE, you take 80% of it and compare that with £123.25 to find the weekly rate, rounding up any fraction of a penny. The order of operations is: find AWE, apply 80%, compare with the flat rate, divide by the number of qualifying days to get the daily rate, multiply by the number of sickness days, then round up the total.
What are qualifying days and the daily rate?
Qualifying days are the days an employee normally works, and SSP is only paid for qualifying days. The daily amount is the weekly rate divided by the number of qualifying days in that week. Based on the £123.25 flat rate, the daily rate is £17.6071 with seven qualifying days, £24.6500 with five days, £41.0833 with three days, and the whole £123.25 with one qualifying day. Where an employee's rate is based on 80% of their earnings rather than the flat rate, you divide that personal weekly rate by their qualifying days instead.
What is the maximum amount of SSP?
The maximum entitlement is 28 weeks of SSP within a single period of incapacity, including any linked periods. Once an employee has had 28 weeks of SSP their entitlement ends and they cannot receive more for that continuous or linked spell. At that point you must issue form SSP1 so they can claim other support such as Employment and Support Allowance. The 28-week cap is one reason accurate record keeping of SSP paid is essential, particularly where periods of sickness link together.
What is a Period of Incapacity for Work and how do linked periods work?
A Period of Incapacity for Work (PIW) is a period of four or more consecutive days of sickness, counting all days including those the employee would not normally work. Two or more PIWs are "linked" and treated as one continuous period if the gap between them is less than eight weeks (56 days). Linking affects both the 28-week maximum and the rate, because where a PIW is linked to an earlier one, the average weekly earnings from the first PIW are used to set the rate for the linked periods rather than recalculating. This keeps the rate consistent even if pay changes between spells; only when the link is broken by a gap of eight weeks or more is a fresh calculation done.
What transitional protection applies across 6 April 2026?
Some employees who were already receiving SSP before 6 April 2026 and remained off sick on that date would have seen their rate fall, because they would move from the flat rate to the lower 80% figure. To prevent this, employees who earn between £125 and £154.05 a week, were off sick and receiving SSP before 6 April 2026, and continued to be off sick on 6 April 2026, keep the flat rate at the uprated £123.25 for the duration of that continuous absence. This protection applies only to that single continuous spell. If a protected employee returns to work and then goes off sick again in a later linked PIW, the new rate rules apply to the second period and the protection does not carry across.
What about employees who were below the old Lower Earnings Limit?
An employee who was off sick before 6 April 2026 but did not qualify because they earned below the Lower Earnings Limit becomes entitled to SSP from 6 April for that absence, at 80% of their average weekly earnings at the start of the absence. For example, an employee earning £90 a week and off sick from 20 March 2026 receives no SSP before 6 April but becomes entitled to £72 a week (80% of £90) from 6 April. There are two exemptions: an absence that started on or before 21 September 2025 and continued unbroken to 5 April 2026 does not create a new period of entitlement, and an employee who was not eligible for another reason (such as legal custody or recent Employment and Support Allowance) does not become entitled.
What evidence can you ask for, and what is self-certification?
For the first seven days of sickness an employee can self-certify, telling you in writing that they have been unwell without medical proof. For absences lasting more than seven days you can ask for a fit note from a doctor or other authorised healthcare professional. Set out your notice requirements clearly; if you have no time limit, the statutory default is that the employee must tell you within seven days. You cannot insist on a fit note for the first seven days, and you should keep records of sickness, payments and evidence, as HMRC may ask to see them.
How does SSP show on the payslip and in the FPS?
SSP is paid through payroll and appears on the payslip as part of gross pay, subject to PAYE tax and National Insurance like other earnings. You report SSP to HMRC through your Full Payment Submission (FPS) each time you pay the employee, including the year-to-date SSP figure. Because SSP is no longer recoverable, there is no separate reclaim entry on the Employer Payment Summary for it. Make sure your payroll software is configured for the 2026 to 2027 rules, including the removal of waiting days and the "lower of" calculation, so the right amount is reported.
Is SSP recoverable from HMRC?
No. You cannot recover Statutory Sick Pay. This is unlike SMP, SPP, ShPP, SAP, SPBP and SNCP, where you can recover 92% or 109% of payments depending on your Class 1 National Insurance liability. The old Percentage Threshold Scheme that once allowed some employers to reclaim high SSP costs was abolished years ago and has not been reinstated by the 2026 reform. The full cost of SSP falls on you as the employer, so you should budget for SSP as a non-recoverable cost in your payroll planning.
How does SSP interact with occupational or contractual sick pay?
Many employers run an occupational or contractual sick pay scheme that pays more than SSP, often full or part pay for a set period. Where you pay occupational or contractual sick pay, any amount you pay for a day is set against that day's SSP entitlement, so you are not paying both on top of each other for the same day. This offset does not reduce the employee's maximum 28-week entitlement. In short, ongoing occupational sick pay offsets the SSP due day by day, but you cannot subtract earlier occupational sick pay from SSP.
What happens when SSP ends, and what is form SSP1?
When an employee's SSP is ending or they do not qualify, you must give them form SSP1 so they can claim other support such as Employment and Support Allowance. If SSP ends unexpectedly while the employee is still sick, send SSP1 within seven days of the SSP ending; if you know in advance that SSP will end, you can send it earlier. Where an employee does not qualify at all, send SSP1 within seven days of their first day off sick. For a long-term illness you can complete SSP1 before SSP runs out, which lets the employee apply for Employment and Support Allowance before their SSP ends.
Where can you find the official tools and rates?
HMRC provides a Statutory Sick Pay calculator at https://www.gov.uk/calculate-statutory-sick-pay to help you work out SSP, including qualifying days and the daily rate, with detailed manual calculation guidance on GOV.UK for cases the calculator does not cover. Keep clear records of each employee's periods of sickness, qualifying days, the average weekly earnings used, the rate applied, amounts paid and any evidence, especially for linked periods and transitional cases spanning 6 April 2026. Check that your payroll software has been updated for the 6 April 2026 rules before processing sickness absence in the 2026 to 2027 year.