These three statutory payments come up in almost every small business eventually, and they’ve just been through the biggest set of changes in over a decade. From 6 April 2026, statutory sick pay works differently than it did for the previous twelve years, following reforms under the Employment Rights Act 2025. If your understanding of SSP predates that date, it’s probably out of date now.
Statutory Sick Pay
For years, SSP worked like this: an employee needed to earn at least the Lower Earnings Limit (£125 a week in 2025/26) to qualify at all, and even qualifying employees weren’t paid for the first three “waiting days” of any absence — SSP only started from day four.
Both rules changed on 6 April 2026. The Lower Earnings Limit requirement is gone entirely, so employees no longer need to clear a minimum earnings threshold to qualify. And the three waiting days are gone too — SSP is now payable from the first day of sickness absence, provided the other qualifying conditions are met.
For lower earners who’d previously have fallen below the earnings threshold, the rate isn’t simply the flat weekly amount — it’s whichever is lower: the standard flat rate, or 80% of normal weekly earnings. So very low earners get a percentage-based rate rather than the full flat rate, while everyone earning a reasonable amount still gets the standard flat weekly rate, just from day one instead of day four.
To qualify at all, someone still needs to have actually started work for you, told you they’re sick within the required timeframe, and been incapable of work for at least four calendar days running (weekends count). What’s changed is that once those conditions are met, payment starts immediately rather than after a three-day gap, and there’s no earnings floor beneath which someone gets nothing at all.
This has a real financial impact. The government’s own assessment puts the average cost increase at roughly £15 per employee across UK businesses, mostly from employers now paying for short, one- or two-day absences that previously sat entirely within the unpaid waiting period. For a business with several staff who occasionally take a day off sick, that adds up faster than the old rules would have suggested.
SSP isn’t reclaimable from HMRC — hasn’t been since the rebate scheme ended in 2014 — so all of this extra cost sits with the employer. No government scheme brings any of it back, which is worth factoring into your budgeting if short-term sickness absence is common in your workforce.
If someone’s sickness absence started before 6 April 2026 and runs past it, transitional protection rules stop their pay being cut mid-absence because of the rule change. Worth checking the specifics if that applies to anyone on your books right now.
Statutory Maternity Pay
SMP runs for up to 39 weeks for eligible employees who are pregnant or have recently given birth. It’s two-tier: the first 6 weeks at 90% of average weekly earnings with no cap, then 33 weeks at whichever is lower — the standard flat weekly rate or 90% of average weekly earnings.
To qualify, an employee generally needs 26 weeks of continuous service by the relevant point in pregnancy, and average earnings at or above the Lower Earnings Limit. Unlike SSP, that earnings limit still applies to SMP — the April 2026 reforms targeted sick pay specifically, not maternity pay.
Employers can reclaim most SMP from HMRC, with small employers typically able to reclaim a higher percentage than larger ones — worth checking the current figures directly since reclaim percentages get reviewed periodically. This usually happens by deducting the reclaimed amount from your regular PAYE liabilities rather than as a separate refund, and decent payroll software handles the calculation and reclaim mechanics automatically.
Statutory Paternity Pay
SPP is shorter and simpler than SMP: up to two weeks, at whichever is lower — the standard flat weekly rate or 90% of average weekly earnings.
The eligibility rules changed alongside the other April 2026 reforms. Previously, statutory paternity leave required 26 weeks of continuous service by the qualifying week — a threshold that meant employees starting a job shortly before their partner gave birth often missed out entirely. From April 2026, paternity leave became a day-one right, with the service requirement removed. That’s a meaningful change if you hire regularly: new starters are now eligible from day one rather than needing to build up qualifying service first.
Unpaid parental leave changed the same way — the previous one-year service requirement is also gone, available from day one of employment, though as the name suggests, it isn’t paid.
Your payroll process
The mechanics — calculating the right amount, applying it through payroll, handling the SMP reclaim — are things decent payroll software handles automatically once it’s updated for the current tax year’s rates. What’s actually changed for small employers isn’t the calculation complexity; it’s the eligibility thresholds and timing, which affect how often these payments get triggered and from when.
You’ll likely process more SSP payments than before, including for very short absences that previously sat inside the waiting period — a single sick day is now a paid day, other conditions permitting. New starters are eligible for paternity leave and unpaid parental leave from day one, so a recent hire isn’t automatically excluded from family leave the way they might have been a year ago. And if short-term sickness has historically been common in your workforce, your budgeting for it probably needs a slight upward nudge, since none of the increased SSP cost is reclaimable.
Implementing payroll changes
If you’re on HMRC-recognised payroll software, rate updates and rule changes should apply automatically at the start of the relevant tax year — one of the clearest practical benefits of proper software over calculating statutory payments by hand. Still worth actually verifying, after a rule change as significant as the April 2026 SSP reforms, that your specific tool has been updated correctly rather than assuming it has.
If you’re on an older or less actively maintained tool, you risk underpaying SSP for short absences or applying outdated eligibility rules to new starters’ paternity leave — both genuine compliance exposure, not just an inconvenience.
For the broader picture of how the Employment Rights Act 2025 affects payroll beyond these specific payments, see our guide to the Employment Rights Act 2025 and payroll. For software that keeps pace with these changes automatically, see our guide to the best payroll software for UK small businesses.
