The Government has announced this year’s annual increase to Employment Tribunal compensation limits and other statutory payments, including statutory redundancy pay. The increased rates will come into force on 6 April 2026 and will apply to any relevant events occurring on or after that date.
Some of the key increases are as follows:
| New Rate from 6 April 2026 | Rate from 6 April 2025 | |
Cap on a Statutory Week’s Pay (used for calculating various awards, including statutory redundancy pay and unfair dismissal basic awards) | £751 | £719 |
| Cap on Statutory Redundancy Pay | £22,530 | £21,570 |
| Maximum Basic Award for Unfair Dismissal | £22,530 | £21,570 |
Maximum Compensatory Award for Unfair Dismissal This is likely to be the last increase as the compensatory award cap is due to be removed by the Employment Rights Act 2025 (ERA). The change is due to come into force on 1 January 2027, at the same time that the qualifying period for unfair dismissal reduces to six months. | £123,543 (or a year’s gross pay, whichever is lower) | £118,223 (or a year’s gross pay, whichever is lower) |
Also a reminder that from 6 April 2026 the rates for a number of statutory leave entitlements will also increase, as follows:
| New Rate from 6 April 2026 | Rate from 6 April 2025 | |
Statutory maternity pay (after the first six weeks) The same increase applies, to statutory adoption pay (after the first six weeks), statutory paternity pay, statutory shared parental pay, statutory neonatal care pay, statutory parental bereavement pay and maternity allowance. | £194.32 (or 90% of the employees average weekly earnings whichever is lower) | £187.18 (or 90% of the employees average weekly earnings whichever is lower) |
| Statutory Sick Pay (SSP) | £ 123.25 | £118.75 |
Under the ERA the three-day waiting period for SSP will be abolished so that sick pay will be payable from the first day of sickness absence. This change is also expected to come into force on 6 April 2026.
The lower earnings limit is also due to be removed from 6 April 2026. Previously workers did not qualify for SSP if they earned below the lower earnings limit. From 6 April, those who earn lower than the new prescribed weekly rate (as set out above) will be entitled to SSP at the rate of 80% of their normal weekly earnings (calculated using an 8 week reference period).
Paula Bailey comments: Employers should be aware of the increased rates from April 2026, particularly where any redundancies or dismissals are in the pipeline. April 2026 will also bring increases to the National Minimum Wage rates. We will shortly be producing Howes Percival’s popular ‘facts and figures’ document containing all of the up-to-date rates, so make sure to keep your eyes peeled!
If you need any further information or assistance on the above, please contact a member of the team here.
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