The first time a member of staff goes off sick, hands you a MAT B1, or asks how much holiday they've built up, statutory pay stops being theory and becomes a real payroll job. Get it wrong and you risk underpaying someone, a grievance, or a tribunal claim. Overpay and it comes out of your margin.
This guide walks you through the three statutory payments most small employers meet first: Statutory Sick Pay (SSP), Statutory Maternity Pay (SMP) and holiday pay. We'll cover who qualifies, the current 2026/27 rates, what changed for sick pay on 6 April 2026, and a worked example you can follow.
It's written for owner-managers and anyone running payroll in a small team. If you'd rather hand the lot to someone else, we'll point you to where Zmartly can help.
What counts as statutory pay?
Statutory pay is the legal minimum you must pay an employee in certain situations. It's set by government, processed through your payroll, and most of it is taxable and subject to National Insurance like normal wages.
The ones you'll meet most often are:
- Statutory Sick Pay (SSP) when someone is off sick.
- Statutory Maternity Pay (SMP) when someone takes maternity leave. Statutory Paternity Pay and Statutory Adoption Pay follow similar rules.
- Holiday pay, the paid annual leave every worker is entitled to.
You can always pay more than the statutory minimum if your contracts offer it (occupational sick pay or enhanced maternity pay, for example). You just can't pay less.
If you employ anyone, this sits alongside the rest of your payroll duties. Our bookkeeping and payroll support keeps these calculations in order so nothing slips.
How does Statutory Sick Pay work in 2026/27?
SSP is what you pay an employee who's too ill to work. For 2026/27 the rate is £123.25 a week, or 80% of the employee's average weekly earnings if that is lower.
SSP is paid only for qualifying days, the days the employee would normally have worked. You divide the weekly rate by the number of qualifying days in that week to get a daily figure.
The key rules:
- SSP is paid from the first day of sickness for periods starting on or after 6 April 2026.
- It can be paid for up to 28 weeks for any one period of incapacity.
- The employee must tell you they're sick within your deadline (or seven days if you don't set one), and give a fit note if they're off more than seven days in a row.
- Separate sickness periods that are eight weeks or less apart count as linked, so they're treated as one for the 28-week limit.
| Statutory Sick Pay | 2026/27 |
|---|---|
| Weekly rate | £123.25 (or 80% of average weekly earnings if lower) |
| Paid from | Day one of sickness |
| Maximum period | 28 weeks |
What changed for SSP on 6 April 2026?
Two big changes took effect on 6 April 2026 under the Employment Rights Act 2025, brought into force by The Employment Rights Act 2025 (Commencement No. 3 and Transitional Provisions) Regulations 2026.
1. No more waiting days. Until then, the first three qualifying days of any sickness were unpaid "waiting days", and SSP only started from day four after at least four days off in a row. That's gone. SSP now starts from the first qualifying day of sickness.
2. The Lower Earnings Limit no longer gates SSP. Previously an employee had to earn on average at least the Lower Earnings Limit to get any SSP. Now lower-paid staff qualify too, with their SSP set at the lower of £123.25 or 80% of their average weekly earnings.
In practice this means short absences now cost more to cover than they used to, and more of your team are eligible. If you run a rota-heavy business, our hotels and restaurants and hairdressers and beauty clients have felt this most, because day-one SSP on frequent short absences adds up.
How does Statutory Maternity Pay work?
SMP is paid to an eligible employee while she's on maternity leave. It runs for up to 39 weeks and comes in two parts:
- First 6 weeks: 90% of her average weekly earnings, with no cap.
- Remaining 33 weeks: the lower of £194.32 a week (2026/27) or 90% of her average weekly earnings.
To qualify for SMP, an employee must:
- have worked for you continuously for at least 26 weeks up to and into the "qualifying week" (the 15th week before the week the baby is due), and
- earn on average at least the Lower Earnings Limit of £129 a week (2026/27), and
- give you the right notice and proof (usually a MAT B1 certificate).
If she doesn't qualify for SMP (for example, she hasn't been with you long enough), she may be able to claim Maternity Allowance from the government instead. That's paid by Jobcentre Plus, not by you.
Statutory Paternity Pay and Statutory Adoption Pay use the same standard weekly rate of £194.32 (or 90% of average weekly earnings if lower) for 2026/27.
| Statutory Maternity Pay | 2026/27 |
|---|---|
| First 6 weeks | 90% of average weekly earnings |
| Next 33 weeks | £194.32, or 90% of earnings if lower |
| Total length | Up to 39 weeks |
| Minimum service | 26 weeks by the qualifying week |
| Minimum average earnings | £129 a week |
How do I calculate holiday pay as a small employer?
Every worker, including part-timers and those on zero-hours contracts, is entitled to 5.6 weeks of paid holiday a year. For someone working five days a week that's 28 days, which is the statutory cap. You can choose whether bank holidays count towards that allowance, but the right itself can't be reduced below 5.6 weeks.
How you work it out depends on the working pattern:
- Fixed hours: multiply days worked per week by 5.6. A three-day-a-week employee gets 3 x 5.6 = 16.8 days a year.
- Irregular hours and part-year workers: for leave years starting on or after 1 April 2024 you can accrue holiday at 12.07% of the hours actually worked in each pay period. That percentage comes from 5.6 weeks as a proportion of the 46.4 working weeks left in the year.
Holiday pay is separate from holiday entitlement. For staff with variable pay, a week's holiday pay is based on their average pay over the previous 52 paid weeks (ignoring any whole weeks with no pay). For someone on a fixed salary, a week's holiday is simply their normal week's pay.
If you're modelling what a member of staff actually takes home on these payments, our payslip calculator shows the tax and National Insurance effect.
Worked example: a fortnight off sick and 39 weeks of SMP
Illustrative example. These are made-up figures to show the method, not a real employee. All rates are 2026/27.
SSP. Aisha normally works five days a week and her average weekly earnings are £500. She's off sick for two full working weeks (10 qualifying days).
- 80% of £500 is £400, which is more than £123.25, so the standard weekly rate of £123.25 applies.
- Daily rate: £123.25 / 5 = £24.65 a day.
- Two weeks off: £123.25 x 2 = £246.50 of SSP.
Because waiting days were abolished on 6 April 2026, every one of those qualifying days is paid.
SMP. Priya's average weekly earnings are £600 and she takes the full 39 weeks of maternity leave.
- First 6 weeks at 90% of £600: 0.90 x £600 = £540 a week, so 6 x £540 = £3,240.
- 90% of £600 (£540) is more than £194.32, so the next 33 weeks are paid at £194.32: 33 x £194.32 = £6,412.56.
- Total SMP over 39 weeks: £3,240 + £6,412.56 = £9,652.56.
SMP is taxable and has National Insurance and pension deductions applied like normal pay, so Priya's take-home will be lower than the headline figure.
Can I claim any of this back from HMRC?
You can't reclaim SSP. The percentage-threshold scheme that once let small employers recover sick pay was withdrawn years ago, so SSP is now a cost you carry in full.
Family-related statutory payments are different. Most employers can recover 92% of SMP, Statutory Paternity Pay and Statutory Adoption Pay through their payroll. Small employers who qualify for Small Employers' Relief can reclaim 100%, plus an extra 9% compensation for the employer National Insurance on those payments (a total of 109%). You recover it by reducing the PAYE you pay over to HMRC.
Whether you qualify as a "small employer" depends on the Class 1 National Insurance you paid in the relevant year, so it's worth checking the exact threshold for your situation before you net anything off.
Getting these reclaims right is one of the practical wins of having payroll run properly. It matters whether you trade as a sole trader or through one of our limited company clients' structures, because the recovery flows through the same PAYE scheme.
Frequently asked questions
Do I have to pay SSP from the first day of sickness now?
Yes. For sickness absences starting on or after 6 April 2026, SSP is payable from the first qualifying day. The old three "waiting days" were removed by the Employment Rights Act 2025.
What is the SSP rate for 2026/27?
SSP is £123.25 a week, or 80% of the employee's average weekly earnings if that is lower. It's paid for qualifying days and can run for up to 28 weeks.
How much is Statutory Maternity Pay in 2026/27?
SMP is 90% of average weekly earnings for the first 6 weeks, then the lower of £194.32 a week or 90% of earnings for the next 33 weeks, up to 39 weeks in total.
How much holiday is a part-time worker entitled to?
The same 5.6 weeks as anyone else, applied to their working pattern. A three-day-a-week worker gets 16.8 days a year (3 x 5.6). The 28-day statutory cap applies to those working five or more days a week.
Can I reclaim statutory payments from HMRC?
You cannot reclaim SSP. You can usually recover 92% of statutory maternity, paternity and adoption pay, rising to 100% plus 9% compensation (109% in total) if you qualify for Small Employers' Relief.
What if an employee earns too little to qualify for SMP?
If she doesn't meet the average earnings or service conditions for SMP, she may be able to claim Maternity Allowance from the government instead. That's paid directly to her, not through your payroll.
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Get your statutory pay right
Statutory pay is one of those areas where small mistakes are expensive and easy to make, especially after the April 2026 changes. If you'd like your sick pay, family leave and holiday pay handled accurately every payroll run, talk to a Zmartly accountant and we'll take it off your plate.
