We understand that recent changes to Statutory Sick Pay (SSP) may be causing concern for employers, particularly when it comes to managing payroll, forecasting absence costs and keeping up with your obligations.
From 6 April 2026, the weekly SSP rate is £123.25, or 80 per cent of an employee’s average weekly earnings (whichever is lower).
Before these changes took effect, entitlement to SSP generally depended on the employee earning at least the Lower Earnings Limit, and SSP was normally only payable from the fourth day of sickness absence after three ‘waiting days’.
However, SSP is also now payable from the first full day of sickness absence, rather than after the waiting period.
These changes mean that SSP can now become payable sooner, and to a wider group of employees than before, particularly where the workforce includes lower-paid, part-time or variable-hours staff.
Absence-related costs may be harder to predict, especially if you are already managing tight margins or variable staffing levels.
Will the SSP changes impact your cashflow?
Because SSP payments are funded directly by your business, it is important to make sure you have enough cash available to cover them without putting pressure on day-to-day operations.
For many of you, this is easier said than done as sickness absence is often difficult to predict, and even a short period of absence can create additional costs, particularly if you need to arrange temporary cover, pay overtime or manage reduced productivity at the same time.
With the SSP rate increasing, this cost may become more noticeable in your payroll planning too.
Building SSP into your cash flow forecasts and wider staffing budgets can help you avoid unexpected pressure and give you more confidence when managing employee absences.
Taking a proactive approach now can also help you support your team properly, while protecting the financial stability of the business.
How to manage employee absences and SSP
In case there’s a sudden spike in sickness absence, it may be valuable to develop a system for tracking absences and ensuring that sick leave is managed effectively if you don’t have one already.
This could involve setting clear expectations for reporting within the senior leadership or management team and/or offering additional support to employees to reduce unnecessary sick leave.
Alternatively, it would be worth speaking to your accountant/payroll expert to check how they are managing this. Consider:
- Reviewing your payroll software and SSP settings
- Updating staff handbooks and absence policies
- Briefing managers on the new rules
- Monitoring changes in sick leave patterns over time
Can you claim reimbursement for SSP?
Because SSP was such a cost to businesses during the COVID-19 pandemic, you could recover some of it through the Government’s SSP Reimbursement Scheme.
However, that scheme has now ended and no longer applies.
The last date for submitting or amending a claim was 24 March 2022.
Is it worth getting sick pay insurance for your business?
Some Scottish SMEs take out Group Income Protection (GIP) insurance to help cover salary costs for employees on sick leave, but the primary aim of the policies is to address the cost of paying individuals who are on long-term sick leave.
The policies typically only start to pay out after a deferred period of several weeks or months.
Uptake is relatively low among smaller employers, but some do take out GIP policies, often where:
- Staff continuity is imperative
- There are key individuals whose absence would be expensive
- The employer offers enhanced sick-pay and wants to hedge the cost
- There is already a broader benefits package
Scholes CA is neither an insurance broker, nor qualified to give advice on this subject so you should always seek help from a professional on this. We are happy to make introductions if requested.
How our payroll department has reacted to the changes
As part of our ongoing commitment to supporting our clients, our payroll department is actively reviewing all payroll processes in light of the recent SSP changes.
They are working closely with clients to ensure their payroll systems are updated to reflect the increased SSP rate and revised eligibility criteria.
Our team is also taking proactive steps to help mitigate the financial impact of these changes by offering tailored advice on managing absences and ensuring compliance.
If you have any concerns or need assistance in adapting to these updates, please reach out to our payroll department, who are ready to guide you through the necessary actions based on your unique business needs.
