As part of the UK payroll year end software release, we've added some new rates and made the following software changes:

HMRC introduced a new template for the 2025/26 tax year P60s with the introduction of a new field for Statutory Neonatal Care Pay, which we've preloaded into PeopleXD Payroll and is available within the system.

We've updated the RTI EPS Schema to reflect the 2026/27 changes. These updates automatically link to the tax year the payroll company is in, so there's nothing you need to do. However the following changes may impact user processes and configuration.

We've updated the RTI EPS Schema to reflect the 2026/27 changes. These updates automatically link to the tax year the payroll company is in, requiring no user intervention. However, please note the following changes:

This new repayment plan begins its deductions from 6 April 2026 and applies to students who commenced courses on or after 1 August 2023 in England. This outlines what Plan 5 entails, how it differs from existing plans, and the required configurations in PeopleXD. Plan 5 has three key characteristics:

The table below summarises the student loan plan thresholds for 2026/27. Plan 5 has the lowest repayment threshold among the undergraduate plans at £25,000 annually.

You need to manually create a new pay code for Student Loan Plan 5 in PeopleXD before processing any deductions. This requires your intervention and is not automatic.

To set up a new pay code, follow the steps below.

7. Click Save.

After creating a new student loan plan code ensure to toggle on the student loan plan 5 indicator in the following screen below.

When you load an SL1 file from HMRC to start student loan deductions, Plan 5 will be available as a pay code option alongside Plans 1, 2, and 4.

When HMRC issues an SL2 notice to end student loan deductions, Plan 5 will be included in the SL2 file processing screen alongside other plan types.

The Student Loan Deductions report shows all active student loan deductions for each employee, including the plan type.

From April 2026, the report will include Plan Type 5 alongside existing plan types. The report displays Employee Reference, Name, National Insurance Number, Start Date, and Plan Type.

HMRC has removed the entire De Minimis State Aid section from the EPS file.

This change applies automatically from April 2026. No user action is required.

Northern Ireland Statutory Parental Bereavement Pay (NIRESPBP) now includes:

From April 2026, enhanced Statutory Parental Bereavement Pay(SPBP) applies specifically to employees who work in Northern Ireland and whose employer pays Class 1 National Insurance contributions.

For FPS files, employers need to:

For FPS files, employers need to:

A new section for Northern Ireland Statutory Neonatal Parameters has been added where users should set out the payment pay code being used and the recovery percentage (92%).

Payment of NIRESPBP is made through the timesheet record, and the system will automatically calculate any recovery as part of the HMRC EPS file once the NIRESPBP parameters are configured. Users operating in Northern Ireland will need ensure they use the correct pay code going forward.

To configure the NIRESPBP Pay codes and recovery percentage, follow the steps below.

HMRC now requires a workplace postcode for any employee in Northern Ireland who receives this payment. You can record this postcode in the existing employee parameters section on the RTI screen.

The RTI FPS Validation Report includes the new Northern Ireland SPBP workplace postcode checks from April 2026.

The Employment Rights Act 2025 (Royal Assent December 2025) introduces the most significant Statutory Sick Pay reforms since 1985. These changes apply from 6 April 2026 and affect all UK employers.

The aim is to strengthen worker protections and provide financial security during sickness.

Under the previous rules, employees had to serve three waiting days (also known as qualifying days) at the start of every new Period of Incapacity for Work (PIW) before SSP became payable.

This meant that if an employee became sick on a Monday, they would not receive SSP until Thursday (based on a Monday–Friday working pattern). The first three days were unpaid.

A PIW had to be at least four consecutive qualifying days. Any absence shorter than four days did not qualify for SSP.

Waiting days are completely abolished. SSP is payable from the first qualifying day of sickness absence. Simultaneously, the minimum PIW is reduced from 4 days to 1 day, meaning a single qualifying day of absence can now trigger SSP.

BEFORE (up to 5 April 2026): Employee off Monday to Friday.

AFTER (from 6 April 2026): Same employee, same absence.

Sarah works Monday to Friday and earns 400 pounds per week. She is off sick on Monday 13 April 2026.

The Lower Earnings Limit was the minimum weekly earnings an employee needed to qualify for Statutory Sick Pay(SPP). For 2025 to 2026, the limit was £125 per week (£6,500 per year). Employees who earned below this amount, regardless of their hours or length of service, had no entitlement to SSP.

This rule disproportionately affected part‑time staff, zero‑hours workers, and lower‑paid employees, many of whom received no sick pay at all.

The Lower Earnings Limit for SSP is completely removed. All employees become eligible for SSP from 6 April 2026, regardless of weekly earnings, as long as they meet the remaining conditions: they are an employee, they are sick, and they follow the employer’s notification process.

Approximately 1.3 million additional workers gain SSP eligibility from 6 April 2026.

The groups most affected include:

Jake has zero-hours contract, average earnings £90/week, off sick from 13 April 2026:

Before April 2026: Jake earns £90/week on average. This is below the £125 LEL, so he has no entitlement to SSP. If he gets sick, he receives nothing from his employer.

After 6 April 2026: The LEL no longer applies. Jake is now eligible for SSP. His SSP rate will be the lower of 80% of his Average Weekly Earnings or the flat rate of £123.25. His AWE is £90, so 80% = £72/week. This is lower than £123.25, so Jake receives £72/week SSP.

The SSP flat rate increases from 118.75 pounds per week (2025 to 2026) to 123.25 pounds per week from 6 April 2026. This follows the annual uprating that takes place each April.

From 6 April 2026, SSP is no longer always paid at the flat rate. Employers must calculate SSP as the lower of the following two amounts:

AWE uses the same eight‑week reference period used for other statutory payments such as Statutory Maternity Pay.
​

The calculation includes earnings in the eight weeks immediately before the relevant date, which is the first day of the Period of Incapacity for Work. Only earnings subject to National Insurance count toward AWE.

Example 1: Maria earns £600/week (average), off sick 13 April 2026

80% of AWE = £600 x 80% = £480/week

Flat rate = £123.25/week

Lower amount = £123.25 → Maria receives £123.25/week SSP (flat rate applies)

Example 2: Jake earns £90/week (average), off sick 13 April 2026

80% of AWE = £90 x 80% = £72/week

Flat rate = £123.25/week

Lower amount = £72 → Jake receives £72/week SSP (80% AWE applies)

Example 3: David earns £155/week (average), off sick 13 April 2026

80% of AWE = £155 x 80% = £124/week

Flat rate = £123.25/week

Lower amount = £123.25 → David receives £123.25/week SSP (flat rate applies, as 80% AWE is just above the flat rate).

The flat rate cap protects employers from paying SSP above the statutory maximum. The 80% calculation only results in a lower SSP payment for lower-paid employees.

Employees who were already off sick and receiving Statutory Sick Pay before 6 April 2026 receive transitional protection. This prevents any reduction to their SSP caused by the new calculation rules and ensures their payment continues without disruption during an ongoing absence.

Transitional protection applies only to employees who:

A transitionally protected employee continues to receive the uprated SSP flat rate of 123.25 pounds per week for the remainder of their sickness absence. They do not switch to the 80 percent AWE calculation. This prevents a mid‑absence reduction in their SSP amount.

Protection ends when the first of the following occurs:

Employees who are off sick and serving their waiting days (days 1-3 of absence) as of 6 April 2026 will become entitled to Statutory Sick Pay (SSP) from that date onwards, since waiting days will be abolished.

They do not need to have received SSP before this change; the abolition of waiting days will take effect immediately.

The system has been updated to apply the new SSP rules from 6 April 2026. No user configuration is required. These changes include:

We have aimed to automate the changes in the SSP calculation, however some cases may require user intervention. To assist with the UK Year End, we have introduced a new screen that allows users to easily override the system’s SSP calculation for the current period.

To view this, follow the steps below in Portal.

Statutory Sick Pay (SSP) has been automatically updated to reflect the new rules. However, occupational sick pay rules vary by company, so each organization should review its existing occupational sick pay scheme and determine whether any changes are necessary.

When considering the cost impact, each of the three individual changes increases SSP costs for employers when combined:

Beyond the payroll system itself, employers should also consider:

The Employment Rights Act 2025 introduces three additional statutory leave changes from April 2026. These changes are separate from the SSP reforms. Review your Occupational Absence configuration in PeopleXD to ensure your settings align with company policy.

To review these settings, follow the steps below.

This means a new employee who becomes a father in their first week of employment is now entitled to up to two weeks SPP. Employers can no longer refuse SPP on the grounds that the employee has not completed 26 weeks of service.

Unpaid parental leave allows eligible parents to take up to 18 weeks of unpaid leave per child until the child's 18th birthday. Parents can take this leave in blocks of up to four weeks per year. Starting in April 2026, the qualifying period for this leave will be removed, but the duration and other rules will remain unchanged.

This entitlement recognises the significant emotional and practical impact of losing a partner within the child’s first year of life. The 52‑week period provides time for the bereaved parent to grieve and manage full‑time caregiving responsibilities without the immediate pressure to return to work.

We've updated the P11D Schema to reflect the 2025/26 changes. These updates automatically link to the tax year the payroll company is in, so there's nothing you need to do. The changes are:

The Class 1A NIC rate is now 15.0%. You need to update this manually after generating your P11D for the previous year. To do this, follow the relevant steps below.

As part of the autumn budget 2024, the government confirmed that reporting benefits in kind through RTI will be mandatory from April 2026.This has now been postponed to April 2027 to provide additional time to prepare. More details are available in the government website.

You should assess the impact of this change and familiarize yourselves with existing benefit management features in the XD system:

Software updates are expected, particularly for the new end of year correction process outlined by HMRC. We will provide further updates as HMRC releases more details.