24 | TECHNICAL
Two reforms. Two timelines. One profession adapting fast.
W ith February and March behind us, it’s time for pay professionals to turn their attention to tax year end, while also preparing for the incoming new tax year (2026/27).
In addition to the routine annual tasks of reconciliation, deadline planning and software updates, the new tax year is set to bring more than the standard business-as- usual tasks. Over the next couple of years, we can expect to see some significant
legislative changes, making it crucial to get ahead and start preparing for the future earlier on. Statutory sick pay (SSP) Since the introduction of SSP in 1983, there’ve been few significant alternations to the rules. More than four decades later, the legislation is set to change significantly with the introduction of new provisions under the Employment Rights Act 2025, coming into force on 6 April 2026, from when: 1. The lower earnings limit (LEL) will be removed, meaning all employees will be eligible for SSP, regardless of their earnings. 2. SSP will be paid at 80% of an employee’s average weekly earnings (AWE) or the flat rate amount (£123.25 from 6 April), whichever is lower. 3. The current system of three waiting days will be abolished, allowing SSP to be paid from the first full day of sickness absence. These reforms mark a substantial shift in both access and entitlement. For the first time, all employees will qualify for SSP, and payment will begin immediately rather than after a three-day waiting period, representing a major modernisation of the UK’s SSP framework. It wasn’t until late December of last year that we received clarity on how the new SSP rules would apply to employees who were already off sick on 6 April. With the final guidance now published, employers can move forward with certainty. The key points are:
Eligibility and transitional protections 1. Employees earning below the LEL who
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