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Statutory Payments and Payroll Changes Employers Must Know from April 2026
While much of the focus in 2026 has been on minimum wage and day-one rights, statutory payment upratings also take effect from 6 April. These are routine annual adjustments, but routine does not mean insignificant.
For employers, particularly SMEs managing payroll in-house or through outsourced providers, small statutory shifts can create avoidable compliance issues if overlooked.
Here is what is changing, and what it means in practice.
1. Statutory Sick Pay (SSP)
From 6 April 2026, Statutory Sick Pay increases from £118.75 to £123.25 per week.
That figure applies to eligible employees who are off work due to illness.
At first glance, the increase appears modest. However, when combined with the removal of waiting days (also effective April 2026), the operational impact is more noticeable.
Employers should check:
- That payroll systems are updated to the new weekly rate.
- That sickness absence policies reflect the current entitlement.
- That managers understand the removal of waiting days.
- That absence recording systems align with the new framework.
Even minor underpayments can lead to employee disputes — and those are rarely helpful for morale.
2. Statutory Family-Related Payments
Weekly statutory rates for maternity, paternity, adoption, shared parental leave, parental bereavement, neonatal care leave and maternity allowance will increase from £187.18 to £194.32.
These payments apply after the initial earnings-related period (where applicable) and must be processed correctly from 6 April 2026.
For employers, this means:
- Updating payroll settings.
- Reviewing template letters issued to employees going on leave.
- Checking that finance teams understand the new weekly amounts.
- Ensuring reclaim processes (for eligible employers) are accurate.
Family-related payments are often high-visibility issues. Errors here tend to escalate quickly because they directly affect employees at significant life moments.
3. Lower Earnings Limit (LEL)
The Lower Earnings Limit will increase from £125 to £129 per week.
The LEL determines eligibility for certain statutory payments, including Statutory Sick Pay and family-related entitlements.
This threshold matters more than many employers realise.
If an employee’s weekly earnings fall below the new limit, they may not qualify for statutory payments. Conversely, some employees who previously fell short may now qualify.
Payroll teams should:
- Review eligibility calculations.
- Ensure that part-time or variable-hours staff are assessed correctly.
- Confirm that software reflects the updated limit.
Incorrect eligibility decisions are a common cause of disputes.
Why These Changes Matter More in 2026
On their own, these are annual upratings.
In 2026, however, they sit alongside:
- Day-one Statutory Sick Pay.
- Minimum wage increases.
- Strengthened flexible working processes.
- Ongoing preventative duties around workplace conduct.
Taken together, they represent increased scrutiny on employer process.
Tribunals are paying closer attention to documentation and compliance. Underpayment of statutory entitlements, even accidentally, can undermine credibility if a broader employment dispute arises.
For SMEs, the risk is rarely dramatic non-compliance; it is small technical gaps.
Practical Steps Before 6 April
Rather than treating this as a payroll adjustment exercise, it is sensible to take a slightly wider view.
- Speak to your payroll provider or software team now.
- Confirm that updates will be implemented from the correct pay reference period.
- Review any written documents that state statutory figures explicitly.
- Check internal guidance used by managers.
- Brief HR or line managers on the changes so responses to employee queries are accurate.
It takes very little time to review, and considerably more time to correct errors once pay has been processed incorrectly.
A Final Point
These statutory changes may not be the most exciting part of running a business, but they’re foundational to looking after your team and protecting your organisation.
If you’d like support with preparing for these updates or any other employment-related change, we’re always here to help. Just get in touch.
