Statutory Neonatal Care Pay and Leave: What Small Businesses Need to Know
Running a small business can be tricky at the best of times, but it gets even more complicated when your team needs time off for unexpected situations. One of those tough moments is when a baby is born early or needs extra medical care right after birth. That’s where the new Statutory Neonatal Care Pay and Leave rules come in – and they’re something every small business owner should know about.
This new law started in April 2025, and it’s all about supporting parents whose newborns need hospital care. Let’s break it down into simple terms, so you know exactly what’s going on and how it might affect your business. As with all financial issues, please check how this affects you with your professional adviser (HR / Accountant etc).
So, what is Statutory Neonatal Care Leave?
Statutory Neonatal Care Leave (or NCL for short) is new time off for employees whose baby needs neonatal care (that’s hospital care soon after birth). It gives eligible parents up to 12 weeks of paid leave, on top of any other parental leave they’re already entitled to.
That means this leave doesn’t replace maternity or paternity leave – it’s extra. If someone on your team has a poorly baby in hospital, they might be entitled to extra paid time off to be with them.
Who can get it?
To qualify for Neonatal Care Leave, the employee must:
- Be the parent of a baby who was admitted to hospital for care immediately after birth.
- Be employed when the leave starts.
- Take the leave within 68 weeks of the baby’s birth.
- The baby must have spent at least 7 continuous days in hospital from birth.
It doesn’t matter if the parent is full-time or part-time – they can still qualify.
Who counts as a parent?
In this case, “parent” could mean:
- The biological mother or father
- An adoptive parent
- The partner of the child’s parent
- Intended parents using a surrogate
So even if someone isn’t the biological mum or dad, they might still qualify if they have a parenting role.
What about Neonatal Care Pay?
Good question! Neonatal Care Pay (NCP) is the paid part of the leave. It works a bit like Statutory Paternity Pay or Statutory Maternity Pay – the government sets a weekly rate, and you (as the employer) pay it to the employee. You can then usually claim it back from HMRC.
To qualify for pay, the employee must:
- Be eligible for Statutory Pay (usually by earning at least £125 a week before tax)
- Have worked for you for at least 26 weeks by the end of the 15th week before the baby is due
- Provide you with the right notice and evidence
The pay rate will be similar to other types of statutory pay. As of 2025/26, that’s £187.18 per week or 90% of their average weekly earnings (whichever is lower). This figure is correct as of the 10th April 2025 but will probably change in following years.
How long can they take off?
They can take up to 12 weeks of Neonatal Care Leave, depending on how long the baby stays in hospital.
Let’s say a baby spends 15 days in hospital after birth. That means the parent could take up to 2 weeks of leave. If the baby was in care for 8 weeks, they could take 8 weeks off.
It’s a week-for-week match – so if the baby’s in hospital for 6 weeks, that’s 6 weeks of leave.
And remember – this is on top of other leave. So if someone’s on paternity leave and their baby needs more time in hospital, they can take neonatal leave afterwards.
When can they take it?
Employees can take the leave:
- After the neonatal care ends (or starts, in some cases)
- Within 68 weeks of the baby’s birth
- In <strong”>one block, or separate weeks if needed
It’s designed to be flexible – so parents can take it when it works for their family.
Do they need to give notice?
Yes, they do – but it’s different depending on whether they’re taking paid or unpaid leave.
For unpaid Neonatal Care Leave, the employee just needs to tell you before they want to start.
For Statutory Neonatal Care Pay, they need to:
- Give you at least 28 days’ notice
- Provide evidence (like a hospital letter)
It’s best to be flexible where you can – these situations can be very stressful for families.
What do you need to do as a small business?
As the employer, you’ll need to:
- Understand the rules – so you’re ready when someone needs the leave.
- Update your policies – make sure your contracts and staff handbooks include this new right.
- Process the leave and pay properly – just like you do for maternity or paternity leave.
- Claim the money back from HMRC – use your payroll system to do this.
The good news?
You’ll usually be able to reclaim 92% of the Statutory Neonatal Pay through your payroll – and if you’re a small employer (under £45,000 in National Insurance contributions), you might get 108.5% back.
What if your business is tiny?
If you’re running a microbusiness with just a couple of staff, this might sound overwhelming – but don’t panic.
The key is to plan ahead and know your rights and responsibilities. The rules are there to help families, but they also protect small employers by letting you claim back the costs.
You might only deal with this once in a blue moon – but it’s better to be ready.
Real life example
Let’s say Sarah works part-time at your coffee shop. Her baby is born 6 weeks early and needs 5 weeks in neonatal care. She’s already planned to take 2 weeks of paternity leave, but now she wants to take an extra 5 weeks to be with her baby in hospital.
Sarah qualifies for Neonatal Care Leave and Pay because:
- Her baby spent over 7 days in hospital
- She’s worked for you for over 26 weeks
- She earns more than £125 a week
You give her the time off, pay her the weekly rate, and claim the money back from HMRC. Everyone’s covered.
Helpful links
Here are some official links that go into more detail:
Final thoughts
It’s not easy running a small business – especially when laws keep changing. But this new Neonatal Care Leave and Pay is about supporting families during one of the most difficult times of their lives.
Yes, it’s another thing to keep track of, but the financial support from HMRC and the clear rules should help make it manageable.
So don’t wait until someone on your team comes to you with a poorly baby. Take a bit of time now to update your policies, check your payroll system, and be ready for that possibility.
Because when your team feels supported, they’re more likely to stick around – and that’s good for everyone.