Payroll Changes for April 2026 – What Employers Running Payrolls Need to Know
Significant payroll reforms are coming in April 2026, and employers running their own payroll need to be prepared. Here’s a quick guide to the key changes and what they mean for you.
Statutory Sick Pay (SSP) Reform
From 6 April 2026, SSP becomes payable from day one of absence, and the Lower Earnings Limit is removed, meaning more workers qualify. SSP will be calculated at the lower of 80% of average weekly earnings or the statutory rate. These changes will increase employer costs and require tighter sickness reporting.
National Minimum & Living Wage Increases
New wage rates from April 2026 will raise labour costs and require updates to your payroll routines and controls to avoid underpayments and exposure to compliance risks.
2026/27 Tax Code Updates
HMRC’s updated P9X must be applied from 6 April 2026. Incorrect codes can lead to payroll errors, employee queries, and HMRC intervention.
Payrolling Benefits in Kind (BIK)
Although fully mandatory from 2027, employers are encouraged to start payrolling benefits from April 2026 to reduce disruption later, but the deadline for registering for this is 5 April 2026. Real time BIK processing can be complex for employers running payroll, we will have a further update in our autumn newsletter.
Fair Work Agency Enforcement
A new enforcement body from April 2026 will oversee compliance on minimum wage, sick pay, and holiday rights, increasing the risk of audits and penalty enforcement.
Top 4 Payroll Risks for Employers
1. Higher costs from day one SSP
2. Rising wage bills
3. Tax code errors
4. Stronger enforcement and penalties
Is it time to outsource your payroll processing?
As payroll becomes ever more complex, continuing to run payroll in house accrues increasing cost, administration and risk, outsourcing can reduce admin, increase accuracy, and protect your business.
Our dedicated in-house payroll team offers:
- Automated, HMRC recognised payroll processing, ensuring accuracy and compliance with real time updates.
- Advanced encryption and secure cloud technology to safeguard employee data.
- Full visibility and employee self service, reducing queries and freeing up time.
- Simple switching and managed on boarding, so you can adopt it at any point in the year.
Outsourcing your payroll with GWA helps you stay compliant, reduce errors, and focus on running your business not chasing payroll deadlines.
If you would like to discuss your payroll requirements then please contact our Payroll Manager, Dianne Bradshaw.
