SSP Reform 2026: What Paying From Day One Means for SMEs

If you employ staff, you’ll already know how tricky it can be to manage sickness absence. You want to support your people when they’re unwell, but you also need to balance costs and keep the business running. From April 2026, statutory sick pay (SSP) is changing – and it’s something every small business owner needs to prepare for.

The reforms will mean that SSP becomes payable from the very first day of absence, and more workers than ever will qualify for it. For SMEs, this isn’t just a policy shift; it’s a financial and operational change that could affect budgets, payroll, and the way managers handle absence. Let’s break down what’s happening, why it matters, and how you can get ready.

What’s Changing With SSP in 2026?

At the moment, SSP only kicks in after an employee has been off sick for three consecutive “waiting days”. There’s also a lower earnings threshold, meaning not every worker qualifies.

From April 2026, these two rules will be removed. That means:

• SSP will be payable from day one of sickness absence.
• The lower earnings threshold will be abolished, opening up eligibility to lower-paid staff and those with variable hours.

In practice, this means that anyone who meets the basic employment criteria will be entitled to SSP straight away, no matter their earnings level. It’s a significant expansion of coverage that changes the way businesses must approach short-term absence.

Why These Reforms Are Happening

The changes form part of the government’s broader Employment Rights Bill, which aims to strengthen workplace protections and make work fairer. One of the biggest criticisms of the current system is that low-paid or casual workers often miss out on financial support when they’re unwell. By introducing day-one entitlement and removing earnings barriers, the reforms are designed to reduce hardship and encourage healthier workplaces.

From a social perspective, this makes sense. Employees should feel able to stay home when they’re unwell, rather than struggling into work because they can’t afford to lose pay. But from a business owner’s perspective, it does mean more responsibility – and potentially more cost – to manage.

What This Means for SMEs

So, what does this mean for you if you run a small or medium-sized business?

Firstly, there will be an increase in payroll costs. With more employees qualifying for SSP and payments starting immediately, you may notice a rise in your absence-related outgoings. For businesses operating on tight margins, even a small increase can make a difference.

Secondly, you may see an increase in short-term absence. At present, some employees may decide it isn’t worth taking a single day off because SSP won’t cover them. From 2026, that barrier will be gone. While many staff will continue to use sick leave responsibly, there is a risk of more frequent one-day absences, which can be harder to manage.

You’ll also need to update your absence policies, contracts, and handbooks to reflect the changes. If your documentation still refers to waiting days, you’ll need to amend this to stay compliant.

On the practical side, your payroll system will need to be adjusted so that SSP is triggered automatically from day one. This may mean working with your payroll provider or updating software settings well in advance of the deadline.

And finally, managers will need to be ready for change. The new rules will put greater emphasis on accurate recording of absence and on holding early conversations with staff about their wellbeing and return to work. Without this, it will be difficult to keep track of costs and patterns.

Preparing Your Business for the Change

The good news is that there’s plenty of time to prepare. By acting now, you can avoid any last-minute stress when April 2026 arrives. Here are some practical steps:

• Review your absence policies and contracts to ensure they reflect day-one entitlement and the removal of earnings thresholds. Clear policies will help managers apply the rules consistently.
• Work with your payroll team or provider to make sure systems are updated ahead of the change. You don’t want to discover on 1 April 2026 that payments aren’t being processed correctly.
• Train managers on how to handle short-term absences fairly. Giving them confidence to have early conversations will help prevent patterns of absence from developing unchecked.
• Monitor absence data carefully, so you can spot trends and respond quickly. This could be through software, but even a simple spreadsheet can help smaller employers keep on top of things.
• Build the extra costs into your budget now, so they don’t come as a shock.

By preparing in advance, you’ll be able to adapt smoothly, while also supporting your staff through the transition.

What To Keep in Mind

The SSP reforms coming in April 2026 are significant. Paying from day one and removing the earnings threshold will make life fairer for employees, but it also means more responsibility for employers – particularly smaller businesses with limited resources.

The key is preparation. By reviewing policies, updating systems, and planning ahead, you can make the transition smoothly and avoid unexpected costs or compliance issues.

And remember, you don’t have to do it all yourself. With The HR Dept’s support, you’ll have expert advice on hand and practical help to keep your business on the right side of the law.

If you’d like to review your sickness absence policies or start planning for April 2026, get in touch with your local HR Dept today. Together, we’ll make sure you’re ready for the changes – and that both your business and your people are supported every step of the way.