April 2026 wave — now live

Day-One Sick Pay: What It Actually Costs a Small Employer

Last verified: 7 October 2026

The day-one sick pay cost question has a concrete answer now. Since 6 April 2026, Statutory Sick Pay starts from the first day of absence — no waiting days, no minimum earnings threshold. Here's what the reform costs a small employer in real numbers, how to brief your payroll, and a free calculator to estimate your own bill.

This change is already live, which is exactly why it's being underestimated. It arrived quietly on 6 April 2026, while everyone's attention was on the October and January deadlines. But ask around: 43% of employers say day-one SSP is the biggest-impact change of the whole Employment Rights Act 2025 (Acas/YouGov, February 2026). The DWP puts the national price tag at roughly £450 million a year in extra employer costs, with around 1.3 million workers newly eligible for sick pay at all.

If you employ part-timers on modest wages — a café, a cleaning firm, a small retailer — this one lands squarely on you.

What changed (the short version)

Three things changed together on 6 April 2026, confirmed by Acas:

• No more waiting days. SSP used to start on the fourth day of absence. It's now payable from the first full day of sickness. A Monday-and-Tuesday absence now costs you two days of SSP; before, it cost nothing.
• No more lower earnings limit. Workers used to need to earn above roughly £125 a week to qualify at all. That threshold is gone. Your lowest-paid part-timer is now in scope.
• The rate now has two tiers. SSP is £123.25 a week for 2026/27 — or 80% of the worker's average weekly earnings if that's lower. The lower of the two always applies. A part-timer earning £140 a week gets £112 (80% of £140), not £123.25.

SSP can run for up to 28 weeks. Average weekly earnings are calculated over the 8 weeks before the absence. (The £123.25 figure is the 2026/27 rate — check the current rate on gov.uk, because it changes each year.)

Day-one sick pay costs: three worked examples

Let's make this concrete. These are illustrative examples — use the calculator below with your own numbers for a real estimate.

The café: 12 part-timers

Twelve part-time staff, each averaging 6 sick days a year. At an illustrative daily SSP rate of £24.65 (a sample figure — the real daily rate depends on each employee's earnings and the current weekly rate):

12 × 6 × £24.65 = £1,774.80 a year.

That's roughly £1,775 a year in SSP alone — and it's the number that makes owners sit up, because it's new money they never budgeted for.

The cleaning contractor: 25 staff on low hours

Twenty-five cleaners averaging 9 sick days a year (physical work, higher absence — plausible). Many earn little enough that the 80% rule bites, so the daily rate lands around £17:

25 × 9 × £17 = £3,825 a year.

Note the wrinkle: the 80% rule reduces the per-day rate for your lowest earners, but it also expands who's eligible — staff who previously got nothing now get something.

The small office: 8 full-timers

Eight office staff averaging 5 sick days a year, all earning enough for the full flat rate (say £17.61/day at the 2026/27 weekly rate):

8 × 5 × £17.61 = £704.40 a year.

Modest — but it's on top of the disruption, the cover costs, and whatever contractual sick pay you already offer.

How the 80% rule actually works

The two-tier rate is the part that trips up payroll. The rule: SSP is the lower of £123.25 a week (2026/27) or 80% of the worker's average weekly earnings. Two quick cases:

• Full-timer on £300 a week: 80% of £300 is £240 — higher than £123.25, so they get £123.25.
• Part-timer on £140 a week: 80% of £140 is £112 — lower than £123.25, so they get £112.

Average weekly earnings are worked out over the 8 weeks before the absence, and the result is rounded up to the nearest penny. For staff with variable hours — zero-hours, agency, seasonal — you average their actual pay over that reference period, which is why agreeing their qualifying days (the days they'd normally work) in advance saves arguments later.

Two edge cases worth knowing: absences for the same reason within 8 weeks of each other are treated as linked periods, and the first period's average earnings are used for the second. And if someone was already off sick before 6 April 2026, transitional rules applied so their pay wouldn't drop overnight — that's old news for new absences, but don't be surprised if your payroll provider mentions it.

Free SSP cost calculator

Plug in your own numbers. The weekly SSP rate field is yours to set — check the current rate on gov.uk and enter it yourself, because it changes annually and we won't guess it for you.

Briefing your payroll: the operational bit

The money is only half the story. The bigger headache, per Acas, is operational — your systems and processes were built around the old rules. Here's the checklist:

• Update your payroll software settings — confirm it calculates SSP from day one, applies no earnings threshold, and uses the lower-of-two-rates rule. This is the single most common failure point.
• Identify newly eligible staff — anyone previously under the earnings threshold. Run them through the 8-week average earnings calculation.
• Rewrite your absence policy — any reference to waiting days or a minimum-earnings test is now wrong. Also update self-certification and evidence rules if they assume longer absences.
• Brief your managers — the people taking the "I'm sick" phone calls need to know day one counts now, and that records start immediately.
• Record from day one — with no waiting-day buffer, accurate day-one absence records are your evidence. Patchy records + day-one liability is a bad combination.
• Watch zero-hours and irregular staff — working out average weekly earnings for variable-hours workers takes averaging over the reference period. Agree qualifying days with them in advance.

If your payroll is outsourced, email your provider this week asking for written confirmation that day-one SSP is applied. Don't assume — one missed setting and you're underpaying dozens of people.

The absence-management angle nobody talks about

Here's the awkward bit. Day-one SSP removes a small disincentive to short absences. Employers who worry about "Monday-morning sickness" aren't wrong to notice the change — but the answer isn't suspicion, it's management. Return-to-work interviews after every absence (even one day), proper absence records, and a culture where people feel they can say "I'm struggling" before they call in sick. The employers absorbing this cost best are the ones who already managed absence properly — the ones relying on the waiting days as a crutch are the ones feeling it.

And a warning for January 2027: SSP is also one of the things the new Fair Work Agency will enforce. Sloppy SSP calculations won't just be an employee complaint — they'll be a regulator's audit finding. Getting payroll right now is part of getting ready for everything else on the timeline.

Day-one SSP is one piece of a bigger picture. Our small-business checklist walks through everything else that changed — and if you're wondering how the October harassment duties or the January dismissal changes affect your team, the harassment duty guide and the tribunal limit guide are your next reads.