What payroll changes impact seasonal summer work in 2026?

2026 has been a bit gloomy with the weather, not least because of the 50 consecutive days of rain that started it all.

Now is the time to think about summer when hopefully better weather rolls in and brings with it fresh business opportunities.

Seasonal work remains the cornerstone of businesses looking to make the most of the season, but new payroll requirements could cast a shadow over summer celebrations.

It is vital for businesses to understand how the new payroll rules affect seasonal workers and what they need to do to stay compliant.

How do the 2026 payroll changes affect seasonal workers?

With both the Employment Rights Act bringing in major reforms and the new tax year starting, April 2026 has been a time of change for payroll that has left businesses reconsidering their positions.

Seasonal workers may now have additional complexity brought into payroll processing that needs to be understood and managed before the summer starts.

At a fundamental level, seasonal workers will be paid more than they were last summer as the National Living Wage (NLW) and the National Minimum Wage (NMW) have increased once more.

The current hourly rates are:

• £12.71 for people aged 21 and over
• £10.85 for people aged 18 to 20
• £8 for people aged under 18
• £8 is the apprentice rate

Given that they are typically younger workers occupying lower-skilled roles, seasonal workers are more likely to be paid NMW or NLW, so keeping an eye on these rates is vital.

It is also important to know if a seasonal worker has a birthday during their time with you that can push them into a higher threshold.

As all workers in the UK must receive either the NMW or the NLW for every hour they work, you will need to adjust an employee’s salary if they turn 18 or 21 from the day of their birthday, regardless of how much longer they are working with you.

While you should be adept at handling NMW and NLW changes if you have been operating your business for some time, the updates to Statutory Sick Pay (SSP) are a new consideration.

Seasonal workers may not have qualified for SSP in the past, given that they work fewer hours and may not have crossed the Lower Earnings Limit (LEL).

Now that the LEL has been removed, all workers are entitled to SSP and this must be paid from the first day of sickness rather than after the traditional three-day waiting period.

New calculations add further complexity as most employees will now be paid at the lower of either:

• 80 per cent of the employee’s average weekly earnings
• The prevailing SSP flat rate set by the government – £123.25 per week for the 2026/2027 tax year

On top of this, you need to make sure that you are keeping payroll records for a minimum of six years or face legal action.

What is the most effective way to payroll seasonal workers in 2026?

Knowing what existing measures are still in place is as important as knowing what has changed.

Despite being a much-discussed topic, zero-hour contracts are unlikely to change until 2027, as this year sees them undergo consultation on how to effectively remove the one-sided flexibility.

You may have found last summer slightly challenging, as it was the first since the Employment (Allocation of Tips) Act 2023 was introduced.

This summer should see you consolidate your experiences with the legislation and further improve how tips and gratuities are handled in your business.

To remind you of the rules, tips and gratuities belong entirely to employees and cannot be used to supplement wages.

Instead, they must be divided among employees in a way that they have agreed to and that seems fair.

A Troncmaster should be appointed to handle the tronc, the collected pool of tips and gratuities, to ensure fairness and all tips and gratuities must be processed through payroll.

Our expert team can manage your payroll processing for you, allowing you to focus on running your business and making the most of the summer.

Seasonal workers are important for keeping the summer profitable, so having professionals review your processes will help you stay compliant.

Get in touch with our team to take the stress out of payroll processing for your seasonal workers this summer.