Understanding the 2026 Statutory Payment Changes: What Employers Need to Know
A number of important changes to statutory payments came into force in April 2026, alongside wider reforms to employment law. While some of the annual increases may appear modest, together they could have a noticeable impact on payroll costs, HR administration and compliance, particularly for SMEs and businesses with large or flexible workforces.
If you haven’t already reviewed your payroll systems, employment policies and internal procedures, now is a good time to ensure your business is fully compliant with the latest requirements.
Statutory Payment Changes Now in Force
The Government has confirmed new statutory payment rates and thresholds for the 2026/27 tax year. These changes affect Statutory Sick Pay, family-related payments and National Minimum Wage rates, all of which employers should now be applying.
Statutory Sick Pay (SSP)
Since 6 April 2026, Statutory Sick Pay (SSP) has increased from £118.75 to £123.25 per week. While the increase in the weekly payment is relatively small, employers should also be aware of wider reforms proposed under the Employment Rights Act 2025. These include making SSP payable from the first day of sickness absence and removing the lower earnings threshold, which would mean more low-paid and part-time workers qualify for SSP. Although these changes have not yet come into force, they are expected to be introduced as part of the Government's wider programme of employment law reform.
Now is a good opportunity to ensure your payroll systems are up to date, review sickness absence procedures and make sure managers understand how future changes could affect the business.
Family-Related Statutory Payments
Weekly statutory payments for family-related leave also increased in April 2026, rising from £187.18 to £194.32. The increase applies to Statutory Maternity Pay, Statutory Paternity Pay, Statutory Adoption Pay, Shared Parental Pay, Statutory Parental Bereavement Pay and Statutory Neonatal Care Pay. The Lower Earnings Limit for eligibility has also increased from £125 to £129 per week.
Although these annual increases are routine, employers should check that payroll calculations are correct and that policies, employee handbooks, and template documents reflect the latest rates. Mistakes and miscalculations involving family-related pay can quickly lead to employee grievances or employment tribunal claims.
National Minimum Wage
The National Minimum Wage rates also increased on 1 April 2026. The National Living Wage for workers aged 21 and over is now £12.71 per hour, while employees aged 18 to 20 are entitled to £10.85 per hour. The apprentice rate and the rate for 16 to 17-year-olds have both increased to £8.00 per hour.
For many employers, particularly those in sectors such as retail, hospitality, manufacturing and care, these increases will have an impact on staffing costs. Businesses may also need to review wider pay structures to maintain appropriate salary differentials between junior and more experienced employees.
Further Employment Law Changes
Although the statutory payment increases are now in force, they form only part of a much wider programme of employment law reform. The Employment Rights Act 2025 will introduce several additional changes over the coming months and into 2027. These include day-one rights to paternity leave and unpaid parental leave, stronger protections for whistleblowers, enhanced powers for the new Fair Work Agency, and further reforms affecting Statutory Sick Pay.
The Government has also proposed changes to unfair dismissal rights, zero-hours contracts and flexible working, meaning employers should continue to monitor developments closely.
What Should Employers Do Now?
Even if your payroll systems have already been updated, it is worth taking the opportunity to carry out a wider review of your employment practices. Check that payroll software is using the correct statutory rates and that sickness absence, family leave and employee handbook policies are fully up to date. Line managers and HR teams should understand the latest legal requirements and be prepared for the additional reforms expected over the next 12 to 18 months.
Planning ahead now can help reduce the risk of payroll errors, employee complaints, HMRC penalties and costly employment disputes.
Looking Ahead
Employment law is entering a period of significant change, and the reforms introduced in April 2026 are only the beginning. Further legislation is expected throughout 2026 and 2027, bringing greater protections for workers and additional responsibilities for employers. Keeping up to date with these changes and taking advice where needed will help ensure your business remains compliant and well prepared for the future.
Need Advice on Employment Law Changes?
At RDC Solicitors, our experienced employment law team can help your business understand the latest employment law developments and ensure you're fully prepared for the changes still to come.
Whether you need advice on statutory payments, employment contracts, HR policies or wider workplace compliance, we're here to help. Contact us today on Bingley 01274 723858, Ilkley 01943 601173 or Bradford 01274 735511 for practical, commercially focused advice tailored to your business.
