ALP Brief 304: Charge Rate Guidance April 2026
From April 2026, changes under the Employment Rights Act will significantly widen access to SSP. The Lower Earnings Limit of £123 per week will be removed, and the waiting period abolished, meaning SSP will be payable from day one to all workers.
There is added complexity for lower earners. In some cases, statutory sick pay could exceed a part-time worker’s normal earnings, creating a clear incentive to take time off. To address this, SSP for lower earners will be capped at the lower of 80% of normal weekly earnings or the SSP flat rate, which will be £123.25 per week from April 2026.
In cost terms, these changes will increase employer and labour supply costs. Based on CIPD figures showing an average of 9.4 sick days per year, we estimate that for a full-time worker earning National Living Wage, the SSP reforms will add around 7p per hour per worker compared to the current position.
Where workers already receive full company sick pay, the impact will of course be less pronounced. However, for agency workers, these changes will directly affect cost of supply.
Because of these changes, we have taken the decision to release the 2026 Charge Rate Guidance earlier than usual. This is intended to help members prepare for the SSP reforms and support informed, evidence-based discussions with clients well ahead of April 2026.
This year’s Guidance includes a significant enhancement based on member feedback. We have built an interactive charge rate calculator directly into the PDF. The defaults are based on National Minimum Wages, statutory holiday pay and a 40-hour working week but you are able to overwrite these defaults by inputting:
- Your own pay rates
- Number of weeks holiday entitlement
- Weekly hours
- Whether the Apprenticeship Levy applies
The calculator will then automatically calculate costs for you. It will not allow pay rates or holiday accrual which is lower than the statutory minimum. There are separate tables for basic pay and overtime.
We have also removed the separate agriculture tables. Instead, users will be able to input agricultural pay rates, hours and holiday entitlement directly into the calculator to produce tailored costings where required.
The online charge rate calculator will remain available, which allows for more detailed adjustments, margin modelling and printing calculation outputs.
As usual, the Charge Rate Guidance is exclusive to ALP members until closer to April, when it will be released as an open-source download. An updated Calculating Charge Rates brief is available now, and the revised accompanying eLearning will follow within the next couple of weeks. Webinars on NMW Compliance in 2026 and Calculating Charge Rates in 2026, taking place on 6 and 20 February respectively, are now open for booking.
If you have any questions or would like support in interpreting the guidance, please do not hesitate to contact us.