Statutory Sick Pay (SSP) is set for one of its most significant updates in years. As an employer, it’s vital to stay ahead of what’s changing and understand how these updates could affect your policies, payroll, and people management practices.
This article outlines what’s currently in place, what’s expected to change, and what you should be doing now to prepare.
The current SSP framework
At present, SSP is paid from the fourth qualifying day of an employee’s sickness absence, with the first three days considered unpaid “waiting days” unless the employee has a recent linked period of sickness.
The key facts for the current system are:
- The weekly SSP rate (from 6 April 2025) will be £118.75
- Employees must meet a minimum earnings threshold to qualify
- SSP is payable for up to 28 weeks in a linked period of sickness
- Employers bear the full cost, as SSP cannot be reclaimed from HMRC
These rules have long shaped how businesses handle sickness absence, but they’re due for reform.
The proposed changes
As part of wider employment reforms under the forthcoming Employment Rights Bill, the government is expected to introduce several updates designed to modernise SSP and make it more accessible.
1. SSP from day one
The current waiting period is set to be scrapped, meaning SSP will become payable from the very first day of sickness. While this is a positive step for employees, it increases cost exposure for employers and may lead to a rise in short-term absence claims.
2. Removal of the lower earnings limit
Currently, employees must earn above a certain amount each week to qualify for SSP. Under the proposed changes, this threshold would be removed – allowing lower-paid and part-time workers to access SSP for the first time.
3. New payment calculation
SSP payments are expected to shift from a flat rate to 80% of the employee’s average weekly earnings, capped at the standard weekly rate (£118.75). This aims to make the system fairer, but it also adds complexity for employers and payroll teams.
4. Implementation timeline
While rate increases were applied in April 2025, most of the proposed SSP reforms are anticipated to come into force in April 2026, giving employers some time to prepare.
Key dates and figures
- 6 April 2025: New SSP rate of £118.75 per week comes into effect
- April 2026: Expected implementation of the new SSP structure (subject to final legislation)
Preparing your business
These changes are intended to make SSP more inclusive, but they also bring new challenges for employers. Taking proactive steps now will make the transition smoother and help manage cost and compliance risks.
1. Review your sickness absence policies
Ensure your employee handbook and policies reflect the upcoming changes, particularly the removal of waiting days and any interaction with enhanced or contractual sick pay schemes.
2. Assess the financial impact
Removing the waiting period and expanding eligibility will increase costs. Estimate how this could affect your budget and consider any adjustments needed to manage short-term absences more effectively.
3. Update payroll and HR systems
Check that your payroll software can accommodate changes to SSP calculation rules and ensure absence tracking processes are robust.
4. Train your managers
Line managers will play a key role in managing the new SSP structure. Provide guidance on return-to-work processes, absence recording, and communication with staff.
5. Communicate with your team
Be open with employees about the changes and what they mean in practice. Clear communication helps manage expectations and prevents confusion once the new rules are introduced.
Why these changes matter
The reform of SSP represents a major step towards fairness and inclusion in the workplace. By removing financial barriers, it ensures that lower-paid or part-time workers are no longer penalised for being unwell.
At the same time, employers will need to manage the financial and operational implications, particularly around short-term absences and increased administrative requirements.
Balancing fairness, well-being, and business resilience will be key to adapting successfully to these changes.
The forthcoming SSP updates mark a significant shift in how sickness absence will be managed across UK workplaces.
To stay compliant and prepared, employers should start planning now, reviewing policies, updating systems, and ensuring staff are informed. Early action will make it easier to adapt and avoid disruption when the new rules take effect.
If you need support reviewing your HR policies or understanding how these changes could affect your business, the CXCS team can help.