From 6 April 2026, the Employment Rights Act 2025 will introduce amendments to the Social Security (Contributions and Benefits) Act 1992 (SSCBA). Statutory Sick Pay (SSP) entitlement will become a “day one” right for all employed earners who are unable to work due to illness, with the removal of both the lower earnings threshold and the three waiting days.
For SSP to apply, a person must be gainfully employed — that is, an “employed earner” in line with the SSCBA definition under section 2(1). Therefore, an agency worker who falls ill while on an assignment will be entitled to SSP.
The “gainfully employed” test may also apply where an agency worker falls ill before the start of an agreed assignment. As SSP can be payable for up to 28 weeks of absence, businesses engaging large numbers of agency workers will need to consider the potential impact of long-term absences. However, it may be arguable that SSP entitlement ends once an agreed assignment concludes, as the agency worker may no longer be “gainfully employed” between assignments or after the assignment ends.
How SSP Will Be Calculated
SSP will be calculated as the lower of:
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80% of the employee’s average weekly earnings (based on the statutory eight-week reference period before sickness absence, including all earnings on which Class 1 National Insurance contributions are due or would be due if earnings were high enough); or
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£123.25 per week.
SSP is payable only for qualifying days.
Qualifying days are those days on which the employee works, or is required to be available for work, under their agreement. SSP is not payable for weekends or rest days unless those days are qualifying days for that individual.
The daily rate of SSP is calculated by dividing the weekly rate by the number of qualifying days in that week.
For example:
If the weekly SSP rate is £123.25 and the employee works a four-day week (Monday to Thursday), SSP would be payable at £30.81 per qualifying day of sickness (£123.25 ÷ 4).
The daily rate is calculated to four decimal places, and the total SSP payable in a pay period is rounded up to the nearest penny.
Transitional Provisions
Where an employee is already receiving SSP before 6 April 2026, transitional protections will apply. HMRC has issued technical guidance, including details of transitional protections, to software developers and payroll providers to assist businesses in preparing for the changes. An email address has also been provided for business queries: SSP.Team@DWP.gov.uk.
What Employers Should Do Now
In light of these changes, businesses should:
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Review and update sickness absence and SSP policies
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Assess the financial impact of extended SSP eligibility for agency workers
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Ensure payroll systems are updated in line with the new calculation method
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Train payroll staff and managers on the revised SSP entitlements
If you require further assistance, please do not hesitate to contact our HR/Legal advice line team on 01455 852 028.
