The UK payroll and employment law landscape will shift dramatically in April 2026. As specialists at EWS Limited, we know how this affects every employer, from scale-ups and established IT firms to global mobility managers and C-suite leaders. Each April, pay and employment legislation typically evolve, but the upcoming tax year-end brings one of the most significant clusters of changes we have seen in years. For the 2025/26 tax year, these reforms coincide with the tax year ending on 5 April 2026 and usher in pressing compliance and HR challenges for all employers.
In this guide, we map out every headline update, from new pay rates and day-one statutory sick pay to expanded employment rights and share scheme eligibility. Our goal is to help you avoid penalties, keep your workforce informed, and build confidence as you handle year-end payroll and HR administration in the UK.
Traditionally, the UK tax year runs from 6 April to 5 April the next year. The 2026 reforms coincide with this cycle, making April a critical month. As payroll and HR teams set up new codes, rates, and statutory pay, they must also adapt to entirely new compliance obligations. Details of this multi-pronged shakeup can be found in the government’s phased timeline.
April 2026 will introduce higher minimum wages, day-one SSP, wider day-one family leave, and increased EMI share scheme eligibility for UK employers.
Every process, every payslip, every contract—must reflect these new rules.
We’ve grouped the main changes below, showing exactly how to get ready.
Let’s look at the main reforms and their practical impact:
We break these down, with clear actions for payroll, HR, finance teams, and decision-makers.
The government’s approved uplift in National Minimum Wage (NMW) and National Living Wage (NLW) rates takes effect from 1 April 2026. According to the official February 2026 Employer Bulletin, employers must apply the new rates from the first full pay reference period after this date, whatever your pay cycle.
The new rates will be:
All pay scales, payroll software, salary sacrifice arrangements, and budget forecasts must reflect these new levels by 1 April 2026.
Here’s how to prepare:
If errors or delays occur, employees could be underpaid and your business may face costly penalties or reputational harm.
UK government intends for these wage increases to support living costs and keep pace with inflation. Recent Office for National Statistics payroll data still shows employment growth is uneven (notably, health and social work jobs increased, while wholesale and retail hiring dipped). However, the higher baseline will directly change payroll for millions.
Failing to pay the new rate—even accidentally—leaves companies exposed to audit and HMRC action.
We advise conducting a full review of age bands regularly, since birthdays and apprentice status changes often catch firms out.
Historically, SSP payments only started on the fourth day of absence and only if employees earned over the Lower Earnings Limit (LEL). From 6 April 2026, following the Employment Rights Act 2025 reforms, this approach will end.
Employees will get statutory sick pay from their very first qualifying day and regardless of earnings.
No employee should be denied SSP due to insufficient weekly earnings or early in their sickness absence after April 2026.
This single reform affects:
We encourage every employer to model the cost impact of these changes now and budget accordingly.
Payroll software or providers must promise day-one triggers for absence payments, and historical policy documents must be carefully updated.
The expectation from HMRC, as found in recent HMRC bulletins, is that every employer has full systems readiness just after Easter 2026.
Feedback from our clients at EWS Limited shows questions around absence and payroll will surge in the lead-up to April’s changes.
As of 6 April 2026, new parents and bereaved employees gain immediate access to statutory paternity, unpaid parental, and partner bereavement leave from their first working day, not after 26 or 52 weeks as previously.
Every new starter and every manager must understand that leave rights now start from the moment employment begins.
What does this mean?
This means:
Failing to update policies or educate supervisors may result in discrimination claims, lost trust, or even HRMC enforcement.
Our team at EWS Limited advises every client to schedule contract updates and all-staff communications ahead of April’s changes, as the policy shift is wide-reaching and immediate. Lessons learned from the past show that unprepared companies risk both legal and HR issues.
For founders and HRDs in high-growth and established IT businesses, the EMI share option scheme offers a tax-advantaged way to reward and retain staff. From April 2026, the eligibility thresholds expand:
This change allows more companies—especially mature scale-ups and larger IT firms—to benefit from EMI, attracting top talent and aligning reward policies.
Immediate to-dos for HR and CFOs:
We have seen clients experience a surge in interest in EMI as these limits increase, making it a strategic moment for tech and service firms to compete on reward packages.
Amid so many new rules, the annual payroll cycle remains just as demanding, requiring a careful approach to deadlines and data quality. Any slip-up in reporting or delays in submissions can now attract more scrutiny as the legislative landscape is under review by HMRC. The most up-to-date processes and timelines can be found via government PAYE rules and deadlines.
Here are the key milestones you cannot miss:
Each of these deadlines is fixed—late, missing, or incorrect filings attract penalties and trigger compliance investigations.
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