Day one employment rights under the Employment Rights Act 2025
23 March 2026
From 6 April 2026, day one employment rights in the UK will come into effect under the Employment Rights Act 2025. These rights ensure new employees have access to essential protections, including Statutory Sick Pay (SSP), paternity and parental leave, holiday pay accrual and termination and notice pay from their very first day on the job.
Day one employment rights will have a direct and immediate impact on payroll operations. Payroll teams will need to ensure that systems, processes, and controls can support the compliance of these changes, with particular focus on statutory payments, eligibility checks, and audit evidence requirements.
HR and Payroll are deeply interconnected functions, and as changes to day one employment rights come into effect, businesses will need to look beyond HR considerations alone and fully assess the impact on payroll processing, calculations, and employee pay outcomes.
Payroll risks and considerations related to the introduction of day one employment rights
The introduction of day one employment rights significantly increases payroll risk exposure, particularly for new starters and short‑service employees.
Key payroll risk areas include:
| Day one employment rights | Change/risk | Considerations |
|---|---|---|
| Statutory Sick Pay (SSP) |
|
|
| Parental/Family Pay |
|
|
| Holiday Pay Accrual |
|
|
| Termination & Notice Pay |
|
|
Additional year-end and new tax year considerations
In addition to day one employment rights changes, payroll teams must also consider the annual mandatory year end/new tax year preparations.
Statutory deadlines
- P60s issued by 31 May
- P11D / P11D(b) filed by 6 July
- Class 1A NIC paid by 22 July
- Submit your final FPS (and EPS if applicable) accurately and on time
- Form P11D(b) is still required even if Benefits in Kind were reported via Payroll by 6 July
Benefits in Kind (BIK)
- Prepare and submit P11Ds/P11D(b) if you're not payrolling
- If you are payrolling, remember: a P11D(b) is still required
- Mandatory BIK payrolling now deferred to April 2027
Directors’ National Insurance Contributions
- Ensure directors are processed on the correct annual NIC method
- Reconcile any in-year changes to avoid mismatches
Update Your Payroll Systems
- Confirm your payroll software is set for new thresholds and rule changes
With increased exposure for employers surrounding new starters and short‑service employees, organisations must ensure payroll systems, controls and HR data are aligned and fit for purpose. Early preparation will be key to managing risk, maintaining compliance and delivering accurate pay outcomes.
Join our upcoming employer webinar - What employers need to know for the 2026/27 tax year
We’ll cover key actions and considerations for payroll, employment taxes and rewards as organisations prepare for the 2026/27 tax year.
Get in touchNeed support, speak with our Payroll team |
Key contact
17 Feb 2026
Employment Reforms in 2026
The UK is on the cusp of a seismic shift in employment procedures. With the Employment Rights Act 2025 now enacted, employers across the country are facing the most comprehensive overhaul of workplace rights and responsibilities in a generation. These reforms are not just incremental updates, they represent a fundamental transformation of the employment landscape, with far-reaching implications for...
What employers should know for the 26/27 tax year
Stay informed with our webinar, covering actions and considerations for payroll, employment taxes and rewards as we enter the 2026/27 tax year.