If one of your employees phones in sick on a Monday morning, what do you owe them? Since 6 April 2026, the answer has changed in three important ways — and many small businesses are still running on the old rules without realising it.
Statutory Sick Pay (SSP) is the legal minimum you must pay an eligible employee who cannot work because of illness. It is not optional, it cannot be contracted out of, and getting it wrong can lead to an HMRC fine of up to £3,000. This guide explains the current rules, works through pay examples, and gives you a checklist to bring your policies and payroll up to date.
What changed on 6 April 2026
The Employment Rights Act 2025 reformed SSP, and the changes took effect on 6 April 2026. There are three of them, and they all make SSP more generous — and more costly — for employers:
- SSP starts on day one. The old three unpaid waiting days are gone. If an employee is off sick on a day they would normally have worked, SSP is payable from that first full day.
- A single day now qualifies. Previously, an employee had to be sick for four consecutive days before SSP was due at all. Now one full day of sickness is enough. Short absences that used to cost you nothing now trigger a payment.
- The minimum earnings limit is abolished. Under the old rules, an employee had to earn at least £125 a week to qualify. That threshold no longer exists, so part-time, casual and low-paid staff who previously got nothing are now covered.
How much is SSP in 2026/27?
For the 2026/27 tax year, SSP is £123.25 per week, or 80% of the employee’s average weekly earnings, whichever is lower.
Average weekly earnings are normally worked out over the eight weeks before the sickness began. The 80% rule only matters for lower-paid staff: 80% of £154.06 is roughly £123.25, so anyone averaging more than about £154 a week simply gets the flat £123.25. Anyone averaging less gets 80% of what they normally earn.
SSP is paid for up to 28 weeks in a single period of incapacity, and it is taxed like ordinary pay — income tax and National Insurance contributions apply. Unlike maternity or paternity pay, you cannot reclaim SSP from HMRC. The cost sits entirely with your business, which is why forecasting it matters.
Worked examples
Example 1: Full-time employee, five days a week, earning £450 a week. Her average weekly earnings are well above £154, so she gets the flat £123.25 per week. Divide that by her five qualifying days and her daily rate is £24.65. A single sick day costs you £24.65; a full sick week costs £123.25.
Example 2: Part-time employee, three days a week, earning £150 a week. Because 80% of £150 is £120 — lower than the flat rate — he gets £120 per week. Spread across his three qualifying days, that is £40.00 per sick day.
Example 3: Casual worker, variable hours, averaging £90 a week. She gets 80% of £90, which is £72 per week. Under the old rules she would have received nothing at all, because her earnings were below the old £125 threshold.
The key point for payroll: the daily rate depends on how many qualifying days the employee works each week, so the same weekly rate produces different daily amounts for different staff. Check that your payroll software applies the 80% calculation automatically — if it still uses the old flat-rate-only method, low-paid staff will be overpaid.
Who qualifies for SSP now?
An employee qualifies if they:
- Have started work for you (there is no minimum length of service for SSP)
- Are sick for at least one full qualifying day — a day they would normally work
- Tell you they are sick within your reporting rules, or within seven days if you have no rules
- Are not in one of the excluded groups, such as agency workers paid outside PAYE, self-employed contractors, or employees already receiving Statutory Maternity Pay
Self-employed subcontractors and freelancers who invoice you are not entitled to SSP, however regularly they work for you. If you use a mix of employees and contractors, make sure your managers know the difference.
Fit notes, self-certification and evidence
For the first seven calendar days of sickness, employees self-certify. You can ask them to complete a self-certification form or confirm by email, but you cannot demand a doctor’s note for this period.
From day eight onwards, you may ask for a fit note from their GP or another healthcare professional. If the employee does not provide one, you can pause SSP until they do.
Linked absences: the rule that catches employers out
If an employee returns to work and then goes off sick again within eight weeks, the two absences normally link together into a single period of incapacity. That matters for two reasons: the 28-week maximum runs across the linked period rather than restarting, and the second absence is payable from day one without any fresh qualifying conditions.
In practice, this means an employee with recurring short absences — for example, someone managing a long-term condition with intermittent flare-ups — can accumulate a long linked period. Track absence patterns, not just individual sick days, or your 28-week calculations will be wrong.
What SSP costs a small business — and how to forecast it
Because SSP can no longer be reclaimed, even a small team can face a meaningful bill. A simple way to forecast it:
- Count your qualifying staff. Include part-timers and casual workers who are now covered for the first time.
- Work out your average daily rate. For most staff this is £123.25 divided by their working days per week; for lower-paid staff, use 80% of average weekly earnings instead.
- Apply a realistic absence assumption. UK small businesses typically see around five to six sick days per employee per year.
- Add a buffer for short absences. One- and two-day absences now cost money where they previously cost nothing.
For a team of ten full-time staff, five sick days each at £24.65 a day comes to roughly £1,230 a year. That is manageable — but it is money you need in your cash-flow plan, not a surprise in a payroll run. Keep an eye on your cash-flow KPIs so a bad winter month does not catch you out.
Disputes, fines and record-keeping
If an employee believes you have underpaid or refused SSP, they will usually ask you for your reasons first. If that does not settle it, they can ask HMRC’s Statutory Payment Disputes Team for a formal decision — and you must pay what HMRC decides unless you appeal. HMRC can fine an employer up to £3,000 for refusing, or repeatedly failing, to pay SSP.
Protect yourself with good records. Keep a note of each absence, the qualifying days, the rate paid and the calculation behind it, and retain SSP records for at least three years after the end of the tax year they relate to. If a dispute ever arises, those records are your evidence that you paid correctly.
The Fair Work Agency, created on 7 April 2026, is expected to take over sick pay enforcement in future, but no date has been set for that yet. For now, HMRC remains the enforcement body.
Your SSP update checklist
Work through this list this week and your business will be compliant:
- Remove all references to waiting days and the £125 earnings threshold from your sickness policy, contracts and employee handbook
- Confirm your payroll software applies the 2026/27 rate of £123.25 or 80% of average weekly earnings, whichever is lower
- Brief managers on day-one entitlement, self-certification for seven days, and fit notes from day eight
- Set a clear, reasonable sickness reporting rule and tell all staff what it is
- Start tracking linked absences (gaps of eight weeks or less) for the 28-week limit
- Add an SSP line to your cash-flow forecast, including a buffer for short absences
- File absence and payment records where you can find them for at least three years
The bottom line
The 2026 SSP reforms are good news for low-paid and part-time workers, and a real cost increase for the small businesses that employ them. The employers who will struggle are not the ones who pay SSP — it is a modest amount — but the ones still running outdated policies and payroll settings that contradict the current law.
Update your policy, check your payroll, brief your managers, and budget for the cost. Those four steps take an afternoon, and they remove the risk of an HMRC dispute entirely.
Related reading
If you are updating your people policies alongside SSP, start with your essential HR policies, work through the new-starter legal compliance checklist for every joiner, and record the final wording in your employee handbook so every manager applies it the same way.