As the 2026/27 tax year approaches, employers across the UK are facing some of the most substantial structural changes to employment and payroll legislation in decades. This year isn’t just about the usual rate adjustments; it’s about a fundamental shift in statutory rights.
The “Make Work Pay” changes being implemented this April mean the entire framework for Statutory Sick Pay has been rebuilt, and “Day One” rights have become the new standard for employees.
At DASH our goal is to help you stay compliant. Here is a comprehensive breakdown of the major changes you must integrate into your payroll and HR processes by April 2026.
Statutory Sick Pay (SSP)
This is the most critical change of the year. The entire structure of SSP has been overhauled, making it far more accessible and costly for employers.
What is changing:
- Removal of Waiting Days: The mandatory three-day “waiting period” is gone. SSP is now a Day One right. If an employee is sick on a scheduled working day, you are liable to pay them from that first day.
- Removal of the Lower Earnings Limit (LEL): Previously, employees had to earn an average of at least £123 per week to qualify. This restriction has been removed. All employees are now eligible for SSP, regardless of their earnings or hours.
- The New Flat Rate: The standard SSP rate has increased to £123.25 per week.
- The 80% Cap: For lower-paid employees who earn less than £123.25 per week, the amount of SSP is capped at 80% of their average weekly earnings. This calculation will likely add administrative complexity to your payroll.
Updated National Minimum Wage and Living Wage
Effective from 1 April 2026, the new minimum pay rates are in force. As always, you must ensure your payroll system is updated, especially when employees have birthdays that move them into a new age band.
| Category | New Hourly Rate (2026/27) | Increase from 2025/26 |
| Aged 21 and over (NLW) | £12.71 | + £0.50 |
| Aged 18–20 | £10.85 | + £0.85 |
| Aged 16–17 & Apprentices | £8.00 | + £0.45 |
Parental and Family Rights
Following the pattern of SSP, several important family-related rights have lost their service requirements. These are now available from the first day of employment:
- Paternity Leave & Pay: Previously, an employee needed 26 weeks of service. It is now a Day One right.
- Parental Leave: Previously, an employee needed one year of service. It is now a Day One right.
The rates for Statutory Maternity, Paternity, Adoption, Shared Parental, and Parental Bereavement Pay have all risen to £194.32 per week (or 90% of average weekly earnings, whichever is lower).
Tax, NI, and Benefit-in-Kind Changes
Personal Allowance and Income Tax
The Personal Allowance remains frozen at £12,570. Remember that Scottish taxpayers (S codes) are subject to different tax bands and rates determined by the Scottish Government, though the basic UK Personal Allowance applies to all.
Employer National Insurance (NICs)
There is no change to the rate of Employer NI (Class 1), which remains at 15%. However, the Secondary Threshold (the point at which employers start paying NI) remains frozen at £5,000, meaning inflation is likely to pull more of your payroll cost into the NIC bracket.
New Benefit-in-Kind Exemptions
On a positive note, from 6 April 2026, several common items provided to employees are officially exempt from Income Tax and NICs:
- Employer-provided flu jabs.
- Employer-provided eye tests.
- Recommended homeworking equipment.
Contact Us
If you are concerned about calculating the new SSP rate for low-earners, or if you need assistance understanding how these changes impact your Scottish payroll, please contact our team at DASH Accounting Services today.
