Neonatal Care Leave and Pay is one of the newest statutory entitlements on the books, and many employers have not yet caught up with it. It came into force on 6 April 2025 for babies born on or after that date, and it gives parents whose newborn needs hospital care a dedicated block of leave on top of their normal maternity, paternity or adoption rights. If you employ people, you need to know how it works before a request lands.
What neonatal care leave and pay is
It is a new statutory right for parents of babies admitted to neonatal care in the first 28 days of life who then spend at least seven continuous days receiving that care. Eligible parents can take up to 12 weeks of leave, one week for each week their baby is in care, and this is in addition to any other family leave they are entitled to. Qualifying employees may also receive Statutory Neonatal Care Pay during that leave.
Who qualifies for the leave
Neonatal Care Leave is a day-one right. It does not matter how long the employee has worked for you. To qualify, the baby must enter neonatal care within 28 days of birth and stay there for at least seven continuous days, and the employee must be a parent or the partner of the baby’s mother with caring responsibility, including adoptive and intended parents. All the leave must be taken within 68 weeks of the birth.
Because this sits alongside maternity, paternity, adoption and other rights, it is one more entitlement to track correctly. Choosing payroll services that handle all statutory entitlements means you are not left interpreting brand new rules under time pressure when a family is already going through a stressful period.
Who qualifies for the pay
Statutory Neonatal Care Pay has tighter conditions than the leave. The employee must have at least 26 weeks of continuous service by the relevant qualifying week, remain employed up to the week before the pay starts, and earn on average at least the Lower Earnings Limit that applies to the relevant qualifying period. For 2026/27 the pay is £194.32 a week, or 90% of average weekly earnings if that is lower, and it is subject to tax and National Insurance like other statutory payments.
How much leave, and how it is taken
Leave is taken in whole week blocks, up to a maximum of 12 weeks. The rules distinguish between two situations. Where the leave is taken while the baby is still in neonatal care or in the week immediately after, the notice requirements are light and flexible, and the leave can be taken in separate blocks. Where it is taken later, more than a week after the baby has left care, it must be taken in a single continuous block with formal notice, at least 15 days for one week and 28 days for two or more weeks.
How it interacts with other parental leave
Neonatal care leave is always additional to other statutory family leave, never a replacement. It must be taken after any maternity or adoption leave has finished. Where it overlaps with pre-booked leave such as paternity or shared parental leave, the neonatal entitlement can be paused and added on afterwards. In practice this means a parent’s total time away can be considerably longer than under the old rules, and your payroll needs to sequence the different payments correctly.
Reclaiming the pay from HMRC
Like other statutory parental payments, Neonatal Care Pay can be recovered from HMRC through the Employer Payment Summary. Most employers reclaim 92%. Smaller employers, whose total Class 1 National Insurance was £45,000 or less in the previous tax year, qualify for Small Employers’ Relief and can reclaim 109% for 2026/27. Statutory Sick Pay, by contrast, cannot be reclaimed at all, so it is worth knowing which payments you can recover.
What your payroll needs to track
To administer this correctly your payroll has to capture the baby’s date of birth and the start and end dates of neonatal care, confirm the 28-day and seven-day thresholds are met, count weeks taken against the 12-week cap and the 68-week deadline, check the service and earnings conditions for pay, and apply the right recovery rate when reclaiming. That is a lot of moving parts for a payment most employers will only handle occasionally.
We keep across new statutory entitlements so you do not have to. New to neonatal care pay? Check our pricing or get in touch and our Hull team will set it up correctly from the start.
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