April 2026 Payroll Changes: How to Prepare for SSP and NMW Updates

April 2026 marks the most significant statutory sick pay reform in four decades. Day-one eligibility, 80% average weekly earnings calculations, and the removal of lower earnings limits will change how you process SSP for every worker, alongside national minimum wage increases to £12.71 and new statutory payment rates.

If your payroll system isn't ready by 6th April, you'll face compliance gaps, manual workarounds, and potential underpayments. This isn't a routine tax year rollover. The reforms introduce calculation complexity that most legacy systems weren't designed to handle, and there's no grace period for late implementation.

In this post, I’ll walk through what's changing, where the operational risks lie, and how to confirm that your systems and processes are ready before the deadline.

What's actually changing — and why it matters more than you think

Day one is now day one. SSP becomes payable from the first day of absence, not the fourth. Every sick day now triggers a statutory payment obligation. For businesses with high headcounts or significant short-term absence patterns, this will meaningfully change your payroll volume and the speed at which you need absence data flowing through your systems.

The flat rate is gone. AWE calculations are in. SSP is now calculated at 80% of average weekly earnings (AWE), capped at the new statutory maximum. That sounds simple, but it isn't. It means your payroll system must dynamically calculate AWE for each employee, each pay period, pulling historical earnings data, applying the correct calculation window, and adjusting for part-time hours, variable schedules, and commission-based pay structures.

This is where most systems will struggle. AWE calculations require logic that wasn't part of the original SSP design, and many providers are treating it as a separate module or patch rather than a core update.

The lower earnings limit disappears entirely. Workers who previously earned below the threshold and were excluded from SSP now qualify. Overnight, your SSP-eligible population expands, particularly if you employ part-time or variable-hours staff. Finance teams need to model that cost impact now, before it shows up unexpectedly in April's payroll run.

Transitional cases add another layer of complexity. Sick cases that began before the 6th of April but continue into the new tax year must remain on the old flat-rate system until they close. Your team needs a method to track pre-April and post-April cases separately and apply different calculation rules to each. That's a manual compliance burden that will sit on your payroll team's plate for months.

Why this matters beyond compliance

The instinct in payroll is to frame changes like this as a compliance exercise. Get the system updated, tick the boxes, move on. That framing misses what's really at stake.

When employees are sick, and their pay is wrong, or delayed, or calculated incorrectly, the damage to that relationship is disproportionate to the error itself. People notice. It's the moment your employment proposition is put to the test.

For People and Finance leaders, getting this wrong also carries real reporting risk. With expanded SSP eligibility, incorrect application of transitional rules, or AWE calculation errors, you're not just looking at underpayments. You're looking at potential HMRC scrutiny and remediation costs.

The businesses that treat April 2026 as an opportunity to audit their payroll infrastructure, not just patch it, will come out ahead.

What your team needs to do before April

Confirm your software update, in writing. Don't assume the AWE calculation logic is included in the standard April tax year update. Ask your provider directly when the functionality will be available, and whether it requires manual activation or additional configuration.

Test before you trust. Run parallel calculations on sample employee records across different pay patterns: monthly salaried, weekly hourly, variable commission, and statutory leave scenarios. Verify the system pulls the correct earnings window, excludes non-pensionable payments, and applies the statutory cap correctly. Identify errors now, not in the first live payroll run.

Fix your absence reporting workflow. Day-one SSP means every sickness notification must reach payroll in time for the next pay run. If your managers currently batch sick leave submissions or wait three days before reporting, that process breaks under the new rules. Brief them now.

Document your transitional case protocol. Create a clear reference guide for how to identify pre-April cases, which rate applies, and how to track them separately. This is the kind of thing that gets managed informally and inconsistently without documentation — and inconsistency here is a compliance risk.

Schedule testing for mid-March at the latest. That gives you two weeks to identify errors, work with your provider on fixes, and retest before the first April payroll run.

How Deel helps payroll teams navigate change smoothly

When legislation changes, most payroll teams face a familiar sequence: wait for the software update, test it under pressure, brief managers in a hurry, and hope nothing breaks in the first live run. The compliance burden sits entirely on the employer's team, often with minimal support.

Deel's approach is different because our infrastructure is built for exactly this kind of change.

Deel Payroll runs on owned infrastructure, not third-party processors. When HMRC changes the rules, we don't wait for a vendor to update a module and push a patch — we build the logic ourselves, test it internally, and deploy it to customers before the deadline. The AWE calculation functionality, the day-one SSP logic, and the transitional case handling.

Our UK payroll experts monitor legislative changes as part of their remit. Instead of reacting to April 2026, they've been preparing for it for months. When guidance is ambiguous (and with new legislation, it often is), our team works through the interpretation so our customers don't have to.