Payroll Updates for 2026 and Beyond: Key Takeaways from the Wealden Clerks’ Meeting

beehappypayroll
Dec 10
3 min read

Last week I had the pleasure of joining the Wealden Clerks’ meeting to share an overview of current and upcoming payroll changes affecting town and parish councils, charities and CICs. At Bee Happy Payroll, and with 12 years of experience as a Clerk and Responsible Finance Officer, I’m always focused on helping organisations prepare early so payroll runs smoothly and compliantly.

Below is a summary of the most important wage-related updates from the recent Budget and the Employment Rights Bill, along with practical next steps for councils and small organisations.

1. Budget Announcements – What They Mean for Payroll

Frozen Tax and NIC Thresholds Until 2031

Income Tax and National Insurance thresholds remain frozen for several more years. With wages continuing to rise, more employees will gradually be pulled into higher bands. This fiscal drag means budgeting for payroll costs will be increasingly important.

National Minimum Wage Increases – April 2026

The 2026 uplift is significant, especially for younger workers:

21+: +50p to £12.71
18–20: +85p to £10.85
16–17: +45p to £8.00
Apprentices: +45p to £8.00

Check any staff paid at or near minimum wage to ensure compliance.

£2,000 Cap on Pension Salary Sacrifice (2029)

A future limit on salary sacrifice pension contributions will affect approximately 10% of public-sector employees. While private sector impact is greater, councils should still monitor this development.

2. The Employment Rights Bill: A Major Shift in Employment Law

The Employment Rights Bill (ERB) is currently progressing through Parliament and although some elements remain under debate, particularly around unfair dismissal rights, zero-hours contracts and Trade Union legislation, most changes are expected to start coming into force during 2026–2027 and the following outlines expected Payroll related changes...

Day-1 Rights Becoming Standard

Several rights will no longer require minimum service:

Statutory Paternity Leave – From April 2026
Unpaid Parental Leave – From April 2026
Unpaid Bereavement Leave – From 2027(with further details to follow through secondary legislation)

These changes will give employees greater flexibility and set clearer baselines for all employers.

Statutory Sick Pay Reforms – April 2026

Key changes include:

Removal of the earnings threshold (£123 per week)
SSP payable from day one, not day four
Rate set at 80% of earnings or £118.75 per week (whichever is lower)

This is particularly relevant for organisations employing casual or low-hours staff. Whilst most small council employees have enhanced contractual rights through the NALC model contract there are also Councils that have some employees that will be affected.

3. Other Notable Reforms in the Employment Rights Bill

Maternity protections extended through pregnancy, maternity leave, and six months after returning (2027)
Zero-hours contract changes e.g. guaranteed hours (employees can choose to remain on zero hours) and compensation for cancelled shifts (2027)
Flexible working strengthened, including a requirement to consult before refusing a request (2027)
Unfair dismissal qualifying period expected to reduce from 2 years to 6 months

4. What Councils Should Do Next

Double-check whether the 2026 minimum wage changes affect any staff (the bottom of the NJC salary scale will also need amendment to accommodate this)
Keep an eye on the Employment Rights Bill’s final parliamentary stages
Look out for policy templates and guidance from NALC and SLCC
Clients of Bee Happy Payroll will receive any relevant updates as legislation progresses

If you’d like help with your payroll and keeping on top of changes like these, feel free to get in touch—I’m always happy to support councils, charities, CICs and small businesses with transparent, reliable payroll services.