United Kingdom — Statutory Benefits & Leave

Every worker in the United Kingdom is entitled to 5.6 weeks of paid annual leave per leave year under the Working Time Regulations 1998 (SI 1998/1833, as amended). This translates to 28 days for a full-time worker on a five-day week; part-time and irregular-hours workers receive the same 5.6-week entitlement on a pro-rata or accrual basis.

The 5.6-week minimum is split into two tiers with different carry-over and payment-in-lieu rules:

1. Core 4 weeks' leave (Regulation 13) Regulation 13(1) of the Working Time Regulations 1998 provides that a worker is entitled to four weeks' annual leave in each leave year. This component derives from the EU Working Time Directive (Directive 2003/88/EC, which consolidated Directive 93/104/EC) and is the irreducible statutory floor across all EU and UK-retained frameworks. The four weeks may only be taken in the leave year in which it is due and may not be replaced by a payment in lieu except on termination of employment (Regulation 13(9)(b)). Limited carry-over is permitted where the worker was unable to take leave due to statutory family leave (maternity, adoption, shared parental leave, etc.) or sickness (Regulation 13(14) and (15)); in those cases untaken leave carries forward into the following year, with sick-leave carry-over capped at 18 months from the end of the original leave year (Regulation 13(15)).

2. Additional 1.6 weeks' leave (Regulation 13A) Regulation 13A, inserted by the Working Time (Amendment) Regulations 2007 (SI 2007/2079) and phased in between October 2007 and April 2009, grants an additional 1.6 weeks' leave (8 days for a five-day worker) to bring the total UK statutory entitlement to 5.6 weeks. The aggregate is capped at 28 days regardless of working pattern (Regulation 13A(3)): a worker on a six-day week still receives only 28 days in total, not 33.6. The 1.6-week tranche may not be replaced by payment in lieu except on termination (Regulation 13A(6)), but—unlike the core four weeks—a relevant agreement (collective or workforce agreement) may permit carry-over of the 1.6 weeks into the immediately following leave year (Regulation 13A(7)).

Part-time and irregular-hours workers Part-time workers on regular hours are entitled to 5.6 weeks calculated as days worked per week × 5.6. For example, a three-day-per-week worker receives 16.8 days' leave annually. For irregular-hours workers and part-year workers (defined in Regulation 15B, effective for leave years beginning on or after 1 April 2024), leave accrues at 12.07% of hours worked in each pay period, up to the 5.6-week cap. The 12.07% figure is derived from 5.6 ÷ 46.4 (the 52-week year less 5.6 weeks' holiday). These workers' entitlement at any point equals leave accrued plus any carried forward, minus leave taken (Regulation 15B(2) and (3), inserted by the Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023, SI 2023/1451).

Bank holidays and the 28-day total There is no separate statutory right to paid bank holidays. The 5.6 weeks (28 days) is the total statutory minimum; employers may include the eight typical UK bank holidays within that 28-day envelope or provide them in addition. The contract or staff handbook governs whether bank holidays are extra or inclusive.

Payment and enforcement Holiday pay is calculated under Regulation 16 at the rate of a week's pay (defined by reference to Employment Rights Act 1996 sections 221–224, as modified). For entitlement under Regulations 13 and 15B, the reference period for averaging variable pay was extended to 52 weeks (or the period of employment if shorter) by the Employment Rights (Employment Particulars and Paid Annual Leave) (Amendment) Regulations 2018 (SI 2018/1378), effective 6 April 2020. Workers who are not receiving their statutory leave entitlement may bring claims in the employment tribunal; employers who fail to recognise leave rights or give reasonable opportunity to take leave trigger automatic carry-forward into the next year (Regulation 13(16) and (17)).

Cross-border and PE considerations For an employer outside the UK hiring a worker resident in the UK, the Working Time Regulations 1998 apply if UK employment law governs the relationship (determined by the worker's habitual place of work, the law chosen in the contract, and the jurisdiction with the closest connection). A foreign employer with no UK entity that hires a UK-based remote worker is not automatically exposed to UK permanent-establishment risk solely by reason of that worker's presence; however, depending on the worker's seniority, decision-making authority, and whether the employer maintains a fixed place of business in the UK, PE and corporation-tax exposure under the OECD Model Tax Convention Article 5 may arise and should be assessed separately under HMRC guidance.

Source: The Working Time Regulations 1998 (SI 1998/1833) Source: Working Time Regulations 1998 — Regulation 13 (entitlement to annual leave) Source: The Working Time (Amendment) Regulations 2007 (SI 2007/2079) Source: Holiday entitlement — GOV.UK

Every employee in the United Kingdom who is unable to work due to illness is entitled to Statutory Sick Pay (SSP), a minimum employer-funded payment during sickness absence. The SSP framework was radically reformed by the Employment Rights Act 2025, with the core changes effective 6 April 2026: the three-day unpaid waiting period was abolished, the Lower Earnings Limit (LEL) was removed, and a new earnings-linked calculation was introduced for lower-paid workers. SSP is now payable from the first qualifying day of sickness and applies to all employees regardless of earnings—a change that brought an estimated 1.3 million additional workers into eligibility, including part-time and lower-paid staff previously excluded.

Legislative foundation and employer liability SSP is governed by Part XI of the Social Security Contributions and Benefits Act 1992 (SSCBA 1992). Section 151(1) establishes the employer's liability: where an employee has a day of incapacity for work in relation to their contract of service, the employer must pay SSP if the statutory conditions are satisfied. The Employment Rights Act 2025 sections 10–13 amended SSCBA 1992 to remove the three-day waiting period (section 10), eliminate the LEL (section 11), and introduce an earnings-proportionate rate for low earners (section 12). These amendments came into force on 6 April 2026 under the Employment Rights Act 2025 (Commencement No. 3 and Transitional Provisions) Regulations 2026 (SI 2026/373).

The employer bears the full cost of SSP; there is no general statutory mechanism to reclaim SSP from government (the historic rebate scheme was abolished in 2014). Employers pay SSP directly through payroll, subject to PAYE income tax and Class 1 National Insurance contributions in the usual manner.

Eligibility: who qualifies for SSP An employee is eligible for SSP if they:

1. Are classed as an employee for tax purposes (anyone whose tax is paid via PAYE, including employees, agency workers, and certain casual workers on zero-hours contracts). Self-employed workers who pay tax through self-assessment are not eligible.
2. Have done some work for the employer under the contract of service; SSP does not apply before the employee starts work.
3. Have notified the employer of sickness within any deadline the employer has set, or within seven days if no deadline is specified.

The earnings threshold was removed effective 6 April 2026. Before that date, employees needed average weekly earnings of at least £125 per week (the LEL for 2025–26) to qualify; that requirement no longer applies.

When SSP is payable: period of entitlement and qualifying days SSP is payable for each qualifying day that falls within a period of entitlement. Qualifying days are the days an employee would normally be required to work; for example, a Monday-to-Friday worker who is sick on a Thursday has Thursday (and any subsequent working days of absence) as qualifying days. If an employee has no regular working pattern, the employer and employee should agree which days count as qualifying days (SSCBA 1992, s.154; Statutory Sick Pay (General) Regulations 1982, reg. 7).

A period of entitlement begins on the first day of a period of incapacity for work and ends when the employee:

• returns to work and is no longer incapable of work;
• reaches the maximum 28 weeks of SSP in a single period of entitlement (SSCBA 1992, s.155); or
• has their contract of service end.

Before 6 April 2026, a period of incapacity for work required four or more consecutive days of sickness, and the first three qualifying days (waiting days) were unpaid. The Employment Rights Act 2025 section 10 removed those waiting days, so SSP is now payable from the first qualifying day of any absence. A period of incapacity for work now arises from one or more consecutive days of sickness. If an employee returns to work and falls sick again within eight weeks, the absences are linked and treated as a single period of entitlement; the 28-week maximum continues to run, and no new waiting period applies (though waiting periods no longer exist in any case).

SSP rate: flat rate vs. 80% of earnings The weekly SSP rate from 6 April 2026 is the lower of:

• £123.25 per week (the flat statutory rate for the 2026–27 tax year, uprated from £118.75 in 2025–26); or
• 80% of the employee's average weekly earnings (AWE).

The 80% calculation applies to employees whose earnings are low enough that 80% of AWE is less than the flat rate. For example:

• An employee earning £200 per week: 80% = £160, so SSP = £123.25 (the flat rate is lower).
• An employee earning £135 per week: 80% = £108, so SSP = £108 (80% is lower).

Average weekly earnings are calculated using the eight weeks before the sickness absence began (or the period of employment if shorter). The daily rate of SSP is the weekly rate divided by the number of qualifying days in the week; for example, a five-day worker entitled to £123.25 per week receives £24.65 per qualifying day of sickness.

The introduction of the 80% floor (Employment Rights Act 2025, s.12) ensures that newly eligible low earners do not receive a windfall payment disproportionate to their usual wage, while the cap at the flat rate maintains a ceiling on employer liability for higher earners.

Maximum entitlement: 28 weeks An employee may receive SSP for a maximum of 28 weeks in any single period of entitlement (or any linked series of periods). Once 28 weeks of SSP have been paid, entitlement ceases even if the employee remains sick; the employee may then be eligible for Employment and Support Allowance (a state benefit administered by the Department for Work and Pensions). The 28-week clock resets only after the employee has returned to work and remained continuously at work for eight full weeks without further sickness absence.

Evidence and notification requirements Employees may self-certify sickness for the first seven days (including non-working days such as weekends). For absences longer than seven days, the employer may require medical evidence such as a fit note (formerly a sick note) from a GP or other healthcare professional. The employer sets its own notification deadline (for example, "report sickness before 10 a.m. on the first day of absence"), provided it is reasonable; if no deadline is set, the statutory fallback is notification within seven days.

Interaction with occupational sick pay and contractual rights SSP is the statutory minimum. Many employers provide occupational sick pay (also called company sick pay or contractual sick pay) at a higher rate or for a longer period; such schemes are governed by the employment contract or workplace policy. Any occupational scheme must provide at least the SSP entitlement; an agreement that purports to exclude, limit, or require the employee to contribute towards SSP costs is void under SSCBA 1992, s.151(2). Where an employer pays occupational sick pay that equals or exceeds SSP, the SSP entitlement is satisfied and no separate SSP payment is due.

Cross-border and permanent-establishment considerations for foreign employers A foreign employer with no UK entity that hires a UK-resident employee is subject to UK employment law (including the SSP obligation) if the employee habitually works in the UK or if UK law governs the employment relationship under conflict-of-laws principles (typically determined by the worker's habitual place of work and the law chosen in the contract, with the Rome I Regulation framework applying pre-Brexit contracts and retained EU law principles for post-Brexit contracts until superseded by domestic choice-of-law rules).

The mere presence of a UK-based employee does not automatically create a UK permanent establishment (PE) for corporation-tax purposes under the OECD Model Tax Convention Article 5, but a foreign employer should assess PE risk if the UK employee has decision-making authority, concludes contracts on behalf of the employer, or the employer maintains a fixed place of business in the UK. HMRC guidance on PE and the UK's domestic PE rules (Corporation Tax Act 2009, Part 24) govern the analysis; SSP and employment-law compliance are separate from, but often contemporaneous with, the PE inquiry.

Enforcement and penalties The Fair Work Agency, launched 7 April 2026, has enforcement powers over SSP. Employers who fail to pay SSP face a penalty of 200% of the underpaid amount, capped at £20,000 per worker, with up to six years of back liability. Employers may also be publicly named. Employees who believe they have been underpaid SSP may bring a claim to an employment tribunal or, from April 2026 onward, lodge a complaint with the Fair Work Agency.

Transitional provisions for absences spanning 6 April 2026 For employees who were already off sick before 6 April 2026 and remained off on or after that date, the Employment Rights Act 2025 (Commencement No. 3 and Transitional Provisions) Regulations 2026 provide that:

• Employees who had not yet completed the three waiting days by 6 April 2026 become entitled to SSP from 6 April for any qualifying day on or after that date (reg. 3).
• Employees whose average weekly earnings were between £125 and £154.05 (the old LEL and the threshold above which the flat rate is always lower than 80% of earnings) and who were already receiving SSP before 6 April continue to receive the uprated flat rate of £123.25 until they return to work, exhaust their 28-week entitlement, or reach the statutory maternity pay exclusion period (reg. 4). This transitional protection prevents a cliff-edge reduction in payment for workers mid-absence.

Source: Social Security Contributions and Benefits Act 1992, Part XI (Statutory Sick Pay) Source: Social Security Contributions and Benefits Act 1992, Section 151 (Employer's liability) Source: Employment Rights Act 2025 (Commencement No. 3 and Transitional Provisions) Regulations 2026 (SI 2026/373) Source: Statutory sick pay — GOV.UK

Every employee in the United Kingdom who meets the statutory qualifying conditions is entitled to Statutory Maternity Pay (SMP), an employer-funded payment for up to 39 weeks during maternity leave. SMP is governed by Part XII of the Social Security Contributions and Benefits Act 1992 (sections 164–171) and the Statutory Maternity Pay (General) Regulations 1986 (SI 1986/1960, as amended). The employer pays SMP through payroll and may recover most or all of the cost from HMRC, depending on the size of the business.

Eligibility: four cumulative conditions

An employee qualifies for SMP if she satisfies all four of the following conditions (SSCBA 1992, s.164(2)):

1. Employee status. She must be classified as an employee for tax purposes—her earnings must be subject to PAYE and Class 1 National Insurance contributions. Self-employed individuals, partners, and most agency workers placed through umbrella arrangements do not qualify; those workers may instead be eligible for Maternity Allowance from the Department for Work and Pensions.

1. Continuous employment for 26 weeks. She must have worked for the same employer continuously for at least 26 weeks ending with the qualifying week. The qualifying week is the 15th week before the expected week of childbirth (the week, beginning on a Sunday, in which the baby is due). Continuity of employment is determined under the same rules that apply to unfair-dismissal claims under the Employment Rights Act 1996; short gaps due to sickness, holiday, or statutory leave do not break continuity, but starting a new job does.

1. Average weekly earnings of at least the Lower Earnings Limit. In the eight weeks immediately before the qualifying week (the reference period), her average weekly earnings must equal or exceed the Lower Earnings Limit for National Insurance contributions. For the 2026–27 tax year (from 6 April 2026), the government has announced that threshold as £129 per week, increased from £125 per week in 2025–26. Earnings include salary, wages, bonuses, commission, and statutory payments such as SSP, but exclude benefits in kind, expenses, and pension contributions. For employees paid monthly, the test remains the same eight-week averaging period regardless of pay frequency.

1. Still pregnant at the start of the 11th week before the expected week of childbirth, or the baby has been born. This condition is almost always satisfied but ensures that entitlement arises only when pregnancy is ongoing or the birth has occurred.

An employee who does not meet all four conditions—most commonly because she has not worked for the employer for 26 weeks, or her earnings in the reference period fall below the Lower Earnings Limit—must be given form SMP1 by the employer, which she uses to claim Maternity Allowance from DWP.

SMP rates: two-tier structure over 39 weeks

SMP is payable for a maternity pay period of up to 39 weeks, beginning no earlier than the 11th week before the expected week of childbirth (SSCBA 1992, s.165). The employee chooses when to start her maternity leave and SMP, subject to giving the employer at least 28 days' notice (Statutory Maternity Pay (General) Regulations 1986, reg. 2). If she is off work due to a pregnancy-related illness in the four weeks before the expected week of childbirth, or if the baby is born early, SMP starts automatically.

The 39-week payment is structured in two tiers:

Weeks 1–6: 90% of average weekly earnings with no cap For the first six weeks, SMP is paid at 90% of the employee's average weekly earnings (AWE), calculated over the eight-week reference period immediately before the qualifying week. There is no upper limit on this amount. For example, an employee earning £800 per week receives £720 per week for the first six weeks.

Weeks 7–39: the lower of 90% of AWE or the standard weekly rate For the remaining 33 weeks, SMP is the lower of:

• 90% of average weekly earnings, or
• the statutory standard rate.

From 6 April 2026, the government has announced the standard rate as £194.32 per week (increased from £187.18 in 2025–26). This rate is reviewed annually and typically increases each April in line with the Consumer Prices Index.

Example 1: An employee earning £600 per week receives £540 (90%) for weeks 1–6, then £194.32 (the capped standard rate, which is lower than £540) for weeks 7–39. Example 2: An employee earning £180 per week receives £162 (90%) for weeks 1–6, then £162 (90%) for weeks 7–39 because 90% of her earnings (£162) is lower than the standard rate.

SMP is treated as earnings and is subject to Income Tax and National Insurance deductions in the same way as normal wages.

The qualifying week and the reference period

The qualifying week is the Sunday-to-Saturday week that begins 15 weeks before the expected week of childbirth. To find it: identify the Sunday on or immediately before the due date, then count back 15 complete weeks. For example, if the baby is due on 10 November 2026 (a Tuesday), the expected week of childbirth runs from Sunday 8 November to Saturday 14 November. Counting back 15 weeks, the qualifying week runs from Sunday 27 July 2026 to Saturday 2 August 2026. The employee must have completed 26 weeks of continuous employment by the end of that qualifying week (Saturday 2 August in this example), and her average weekly earnings in the eight weeks immediately before the qualifying week must be at least £129 (for 2026–27).

Pay rises during or after the reference period

If an employee receives a pay rise that takes effect during or after the eight-week reference period but before the end of her maternity pay period, the Statutory Maternity Pay (General) Regulations 1986 require the employer to recalculate SMP as if the higher rate of pay had applied throughout the reference period (regulation 21, as amended by SI 1996/1335). This requirement applies whether the pay rise is a general increase, a promotion, or an individual adjustment. Employers who fail to recalculate SMP after a pay increase face HMRC challenge and potential underpayment claims, even where the pay rise was awarded after the maternity leave had already begun. The recalculation applies to all remaining weeks of the maternity pay period from the date the pay increase takes effect.

Employer recovery: small employer 103% / larger employer 92%

Employers recover SMP paid through deductions from their monthly PAYE and National Insurance remittances to HMRC. Small employers—those whose total Class 1 National Insurance liability in the qualifying tax year was £45,000 or less—may recover 103% of SMP paid (100% plus a 3% compensation payment to cover associated employer National Insurance costs). From 6 April 2026, under the Social Security and Statutory Maternity Pay (Evidence of Pregnancy and Compensation of Employers) (Amendment) Regulations 2026 (SI 2026/201), regulation 5 increases the additional payment for small employers from 8.5% to 9%, resulting in total recovery of 109% of SMP paid for small employers from that date. Larger employers recover 92% of SMP paid; the remaining 8% is the employer's contribution.

If an employer's monthly PAYE/NI remittance is insufficient to cover the SMP recovery, HMRC refunds the balance.

Relationship with maternity leave

SMP and maternity leave are separate statutory entitlements under different legislation. Maternity leave is governed by the Employment Rights Act 1996, sections 71–75; every employee is entitled to 52 weeks of maternity leave (26 weeks' Ordinary Maternity Leave plus 26 weeks' Additional Maternity Leave), regardless of length of service or earnings. SMP, by contrast, is conditional on the four eligibility tests above and lasts for only 39 weeks. An employee on maternity leave for weeks 40–52 receives no SMP unless the employer provides enhanced occupational maternity pay under the contract.

The maternity leave and SMP start dates are usually aligned, but they can differ: an employee may choose to start maternity leave before SMP is due (for example, to use accrued annual leave), or SMP may start automatically due to pregnancy-related sickness while the employee remains nominally at work.

Enhanced (occupational) maternity pay

Many employers provide occupational maternity pay (also called enhanced or contractual maternity pay) at a higher rate or for a longer period than the statutory minimum. These schemes are contractual arrangements, not statutory requirements, and are governed by the employment contract or workplace policy. Typical schemes provide full pay for a number of weeks, then half pay, with SMP running underneath and satisfying the statutory obligation. Where occupational maternity pay equals or exceeds SMP in any week, the SMP entitlement is met; the employer does not pay SMP separately. Occupational schemes often include a clawback clause—a contractual term requiring the employee to repay some or all of the enhanced amount if she does not return to work for a specified period after maternity leave. The statutory SMP regime does not regulate clawback clauses; they are a matter of contract law and employment-law fairness principles.

Cross-border considerations for foreign employers

A foreign employer with no UK entity that hires a UK-resident employee is subject to UK employment law—including the SMP obligation—if the employee habitually works in the UK or if UK law governs the employment relationship under conflict-of-laws principles. The employer must register for UK PAYE, withhold income tax and National Insurance on the employee's earnings (including SMP), and pay employer National Insurance contributions. The employer may recover SMP as described above. A foreign employer hiring a UK-based employee should separately assess whether that arrangement creates a UK permanent establishment for corporation-tax purposes under the OECD Model Tax Convention Article 5 and the UK's domestic PE rules (Corporation Tax Act 2009, Part 24), but the SMP and employment-law analysis is independent of the PE inquiry.

Enforcement

An employee who believes she has been denied SMP or has been underpaid may bring a claim to an employment tribunal under the dispute-resolution provisions of the Social Security Contributions and Benefits Act 1992. HMRC also has enforcement powers to investigate and recover unpaid SMP from employers.

Source: Social Security Contributions and Benefits Act 1992, Part XII (Statutory Maternity Pay) Source: Social Security Contributions and Benefits Act 1992, Section 164 (Entitlement) Source: The Statutory Maternity Pay (General) Regulations 1986 (SI 1986/1960) Source: The Social Security and Statutory Maternity Pay (Evidence of Pregnancy and Compensation of Employers) (Amendment) Regulations 2026 (SI 2026/201) Source: Statutory maternity pay — GOV.UK