Four months from one of the biggest shake-ups to Statutory Sick Pay in years, UK employers who haven’t touched their payroll settings since March could be quietly underpaying staff.
What Changed
From 6 April 2026, the three-day unpaid waiting period disappeared. Eligible employees now earn sick pay from day one of a qualifying absence instead of waiting until day four.
The Lower Earnings Limit for SSP was scrapped too, so part-time and lower-paid staff who previously fell short can now qualify.
The payment still follows a two-part test. For 2026/27, employers pay whichever is lower: £123.25 a week, or 80% of the employee’s average weekly earnings.
Family-related payments moved at the same time. Paternity, shared parental, parental bereavement and neonatal care pay now sit at £194.32 a week, or 90% of average earnings if that figure is lower. Maternity and adoption pay keep their existing structure: the first six weeks at 90% of average earnings with no cap, then the standard rate for the remaining weeks.
Who’s Exposed
Any UK employer running PAYE is affected, but not evenly. Businesses paying fixed monthly salaries, including many Limited Company Accounting clients, have a fairly light lift. The real pressure falls on employers with variable hours, including Hospitality & Tourism operators, Retail Business owners, and casual or agency staff. Smaller businesses relying on Small Business Accounting support are especially exposed, as are sole traders taking on their first employees.
The Part Most People Get Wrong
Absences that started before 6 April need careful handling. As a rule, they fall under the old system, but there are exceptions. Waiting days served before 6 April stay unpaid, yet anyone still mid-waiting-period on that date stops serving them immediately. Employees already on SSP generally shift to the new rate straight away, and some previously ineligible staff may suddenly qualify, depending on when their absence began.
Absences separated by eight weeks or less can still count as linked for SSP purposes, so treating every new sick day as a fresh, standalone case is a common mistake. The earnings threshold was only removed for SSP; family-related payments still carry their own threshold, currently £129 a week.
The Cost of Getting It Wrong
Employees who feel they’ve been wrongly denied SSP can raise it with HMRC, and employers will need records that back up their calculations. Persistent errors can also attract attention during HMRC Tax Investigations. Beyond that sits the practical fallout: reissued payslips, amended submissions, back pay, and time spent working out where things went wrong.
“One wrong setting can ripple across every employee on similar terms, and people tend to remember how they were treated when they were off sick.”
What To Do Now
Start by confirming, not assuming, that your payroll software has switched off the old waiting days and earnings threshold. Then go back through absences recorded since April, paying close attention to anything that straddled 6 April. Solid bookkeeping records make this far quicker.
Update sickness policies and manager guidance to reflect day-one entitlement, double-check average earnings calculations where pay varies, and make sure Auto Enrolment pension deductions are still processed correctly during statutory pay. Reconcile figures before each run and file PAYE information on time.
Why Employers Trust Lanop
Founded in 2009, with its first Putney office opening in 2010, Lanop’s Payroll team handles wage calculations, statutory payments, PAYE reporting, employee records and pension administration, including transitional SSP cases many systems haven’t caught up with. Clients get a dedicated advisor alongside cloud-based systems that keep records current.
If your payroll hasn’t changed since March, switching accountants is more straightforward than most business owners expect. For anything you’re still unsure about, our FAQs cover many of the day-to-day questions employers ask.
