Employment law moves fast, but the changes coming this April under the Employment Rights Act 2025 are some of the biggest we’ve seen for payroll in years.
If you run a small business or manage payroll, you are likely used to the standard routine: waiting days, the Lower Earnings Limit, and the flat rate. From 6 April 2026, those rules are being rewritten.
Here is a straightforward guide to what is changing, how the new calculations work, and how to handle the transition without a headache.
1. Sick Pay becomes a “Day One” right
Currently, an employee has to be off work for three consecutive days (waiting days) before they qualify for Statutory Sick Pay (SSP). They only start getting paid on day four.
The Change: The waiting days are being scrapped. From April, eligible employees are entitled to SSP from the very first day they are off sick.
What this means for you: This will increase the cost of short-term absences. It also means your payroll team needs to trigger sick pay immediately, rather than waiting to see if the absence stretches past three days.
2. The Lower Earnings Limit is gone
Under the old rules, employees had to earn at least the Lower Earnings Limit (LEL)—previously £125 per week—to qualify for sick pay. Those earning less got nothing.
The Change: The LEL is being removed for SSP purposes. Now, all employees are entitled to SSP, regardless of how little they earn.
3. A new “Safety Net” for lower earners
You might be wondering: “If the flat rate of SSP is rising to £123.25, how do I pay that to someone who only earns £80 a week?”
Good question. The government has introduced a cap to protect small businesses from paying staff more in sick pay than they would earn by working.
The New Rates at a Glance
| Employee Type | Earnings Criteria | How to Calculate SSP (From April 2026) |
| Standard Earner | Earns more than the flat rate (£123.25/week) | Flat Rate: They receive the standard £123.25 per week. |
| Lower Earner | Earns less than the flat rate (£123.25/week) | Percentage Rate: They receive 80% of their normal weekly earnings. |
Note to payroll: Your software should handle this, but you need to double-check that employees on variable or low hours are flagged correctly so they don’t accidentally receive the full flat rate.
4. Transitional Arrangements: The “Crossover” Period
The official start date for these changes is 6 April 2026. However, illness doesn’t always follow the calendar. What happens if someone falls ill on April 4th and stays off until April 10th?
The government has set out clear transitional rules to stop things getting messy:
- Periods of incapacity starting BEFORE April 6:
If an employee’s period of sickness starts before the new rules kick in, they stay on the old rules for the duration of that specific illness. This means they will still serve waiting days, and if they earn below the old LEL, they won’t qualify for SSP for that bout of illness.
- Periods of incapacity starting ON or AFTER April 6:
Any sickness starting from this date falls under the new rules (Day one rights, no LEL).
Need help getting ready for April?
April is just around the corner, and compliance isn’t optional. We have put together two resources to help you prepare:
1. Download our “SSP 2026 Info Sheet”
Grab our free one-page infographic. It covers the new rates, the crossover dates, and the “80% rule” in a simple visual format—perfect for sticking on the office noticeboard.
2. Book a Payroll Health Check
Unsure if your software is ready or if your contracts need an update? Let’s chat. We can review your current setup to ensure you are fully compliant before the deadline hits.