Neonatal Care Leave and Pay: A Guide for UK Employers

What small business owners need to know about this new employee right

When an employee welcomes a new baby, most employers are familiar with maternity, paternity and shared parental leave.

However, from April 2025, eligible parents have another legal right to consider: Neonatal Care Leave and Pay.

This new right provides additional time away from work for parents whose newborn baby requires specialist neonatal care.

For small business owners understanding how it works helps you support employees during a difficult time while making sure you follow the correct process and handle payroll correctly.

This guide explains what neonatal care leave and pay means, who is eligible and what employers need to know.

What Is Neonatal Care Leave and Pay?

Neonatal Care Leave allows eligible parents to take additional time off work when their baby needs specialist medical care after birth.

It is designed to give parents time to be with their baby during what can be an extremely challenging period.

Eligible employees can take:

• Up to 12 weeks of neonatal care leave
• Additional to existing maternity, paternity, adoption or shared parental leave entitlements

This means eligible employees can take the leave from the start of their employment if they meet the qualifying conditions.

Statutory Neonatal Care Pay may also be available for eligible employees who meet additional requirements.

When Does Neonatal Care Leave Apply?

An employee may qualify for neonatal care leave if their baby:

• Is admitted to neonatal care within 28 days of birth
• Receives neonatal care for at least 7 continuous days

Neonatal care includes situations where a baby receives:

• Care in a hospital neonatal unit
• Consultant-led care after leaving hospital
• Palliative or end-of-life care

The aim of neonatal care leave is to give parents additional time to care for their baby without having to use existing family leave allowances.

This gives parents extra time with their baby without reducing their existing maternity, paternity, adoption or shared parental leave entitlement.

Who Is Eligible for Neonatal Care Leave?

An employee may be eligible if they are the baby's parent or have legal responsibility for caring for them.

This can include:

• Birth parents
• Partners
• Adoptive parents
• Intended parents in certain circumstances

To qualify, the baby must have been born on or after 6 April 2025.

Unlike Statutory Neonatal Care Pay, employees do not need a minimum length of service to take neonatal care leave.

Who Is Eligible for Statutory Neonatal Care Pay?

While neonatal care leave is available from day one, employees must meet additional conditions to receive Statutory Neonatal Care Pay.

Employees must generally:

• Have worked for their employer continuously for at least 26 weeks before applying for Statutory Neonatal Care Pay
• Earn at least the National Insurance Lower Earnings Limit
• Still be employed while taking the leave.

Statutory Neonatal Care Pay is paid at the same rate as other statutory family payments.

For 2026/27, the statutory weekly rate is £194.32 (or 90% of average weekly earnings if this is lower).

As with other statutory payments, tax and National Insurance deductions apply.

How Much Neonatal Care Leave Can Employees Take?

Employees can take up to 12 weeks of neonatal care leave.

The amount of leave available depends on how long their baby receives neonatal care.

The leave must generally be taken within 68 weeks of the baby's birth.

There are two ways employees can take neonatal care leave:

While the Baby Is Receiving Neonatal Care

Employees can usually take leave in weekly blocks while their baby remains in neonatal care, or shortly afterwards.

At a Later Date

Employees may choose to take their leave later, for example after maternity or paternity leave ends.

This gives parents more flexibility to spend time with their baby when they may need it most.

What Should Employers Do When an Employee Requests Neonatal Care Leave?

For small businesses, the key is understanding the process and handling requests sensitively.

Employers should:

• Review and update family leave policies
• Understand eligibility requirements
• Process Statutory Neonatal Care Pay correctly through payroll
• Keep accurate records
• Handle requests sensitively and confidentially

Having a clear process helps ensure employees receive the support they are entitled to while reducing the risk of payroll errors.

Notice Periods for Neonatal Care Leave

The notice requirements depend on when the leave is taken.

For leave taken while the baby is receiving neonatal care, employees may be able to give shorter notice.

For leave taken later, employees usually need to provide advance notice.

Employers should ensure they understand the different notice rules and keep communication open with employees during what can be a difficult time.

Reclaiming Statutory Neonatal Care Pay

Employers may be able to reclaim some or all of Statutory Neonatal Care Pay from HMRC, in the same way as other statutory family payments.

Employers reclaim the Statutory Neonatal Care Pay through their usual payroll reporting process.

Businesses should make sure:

• Payments are recorded correctly
• Payroll records are kept up to date
• Claims are submitted correctly

Accurate payroll processing is particularly important when managing new statutory payments.

What If an Employee Does Not Qualify?

If an employee requests neonatal care leave or pay but does not meet the eligibility requirements, employers should explain this clearly.

Employees who are not eligible for Statutory Neonatal Care Pay may still be entitled to take neonatal care leave if they meet the leave criteria.

Employers should avoid making assumptions, check each situation carefully and seek guidance where needed.

How Small Businesses Can Prepare

Although neonatal care situations may be relatively uncommon, having a clear process in place means you can respond confidently when they do happen.

Small businesses should consider:

• Adding neonatal care leave to their family leave policies
• Making sure payroll teams understand the new payment rules
• Training managers on how to handle sensitive family situations
• Keep communication open and supportive throughout the employee's leave

For employees, having an employer who listens and offers support during this period can make a significant difference.

Final Thoughts

Neonatal Care Leave and Pay gives parents additional support during one of the most difficult experiences they may face.

For employers, understanding the rules helps ensure employees receive the correct support while keeping payroll accurate and compliant.

Supporting an employee through neonatal care requires understanding, flexibility and a clear process. By preparing in advance and understanding the steps involved, employers can provide the right support while meeting their legal responsibilities.

What small business owners need to know about this new employee right

When an employee welcomes a new baby, most employers are familiar with maternity, paternity and shared parental leave.

However, from April 2025, eligible parents have another legal right to consider: Neonatal Care Leave and Pay.

This new right provides additional time away from work for parents whose newborn baby requires specialist neonatal care.

For small business owners understanding how it works helps you support employees during a difficult time while making sure you follow the correct process and handle payroll correctly.

This guide explains what neonatal care leave and pay means, who is eligible and what employers need to know.

What Is Neonatal Care Leave and Pay?

Neonatal Care Leave allows eligible parents to take additional time off work when their baby needs specialist medical care after birth.

It is designed to give parents time to be with their baby during what can be an extremely challenging period.

Eligible employees can take:

• Up to 12 weeks of neonatal care leave
• Additional to existing maternity, paternity, adoption or shared parental leave entitlements

This means eligible employees can take the leave from the start of their employment if they meet the qualifying conditions.

Statutory Neonatal Care Pay may also be available for eligible employees who meet additional requirements.

When Does Neonatal Care Leave Apply?

An employee may qualify for neonatal care leave if their baby:

• Is admitted to neonatal care within 28 days of birth
• Receives neonatal care for at least 7 continuous days

Neonatal care includes situations where a baby receives:

• Care in a hospital neonatal unit
• Consultant-led care after leaving hospital
• Palliative or end-of-life care

The aim of neonatal care leave is to give parents additional time to care for their baby without having to use existing family leave allowances.

This gives parents extra time with their baby without reducing their existing maternity, paternity, adoption or shared parental leave entitlement.

Who Is Eligible for Neonatal Care Leave?

An employee may be eligible if they are the baby's parent or have legal responsibility for caring for them.

This can include:

• Birth parents
• Partners
• Adoptive parents
• Intended parents in certain circumstances

To qualify, the baby must have been born on or after 6 April 2025.

Unlike Statutory Neonatal Care Pay, employees do not need a minimum length of service to take neonatal care leave.

Who Is Eligible for Statutory Neonatal Care Pay?

While neonatal care leave is available from day one, employees must meet additional conditions to receive Statutory Neonatal Care Pay.

Employees must generally:

• Have worked for their employer continuously for at least 26 weeks before applying for Statutory Neonatal Care Pay
• Earn at least the National Insurance Lower Earnings Limit
• Still be employed while taking the leave.

Statutory Neonatal Care Pay is paid at the same rate as other statutory family payments.

For 2026/27, the statutory weekly rate is £194.32 (or 90% of average weekly earnings if this is lower).

As with other statutory payments, tax and National Insurance deductions apply.

How Much Neonatal Care Leave Can Employees Take?

Employees can take up to 12 weeks of neonatal care leave.

The amount of leave available depends on how long their baby receives neonatal care.

The leave must generally be taken within 68 weeks of the baby's birth.

There are two ways employees can take neonatal care leave:

While the Baby Is Receiving Neonatal Care

Employees can usually take leave in weekly blocks while their baby remains in neonatal care, or shortly afterwards.

At a Later Date

Employees may choose to take their leave later, for example after maternity or paternity leave ends.

This gives parents more flexibility to spend time with their baby when they may need it most.

What Should Employers Do When an Employee Requests Neonatal Care Leave?

For small businesses, the key is understanding the process and handling requests sensitively.

Employers should:

• Review and update family leave policies
• Understand eligibility requirements
• Process Statutory Neonatal Care Pay correctly through payroll
• Keep accurate records
• Handle requests sensitively and confidentially

Having a clear process helps ensure employees receive the support they are entitled to while reducing the risk of payroll errors.

Notice Periods for Neonatal Care Leave

The notice requirements depend on when the leave is taken.

For leave taken while the baby is receiving neonatal care, employees may be able to give shorter notice.

For leave taken later, employees usually need to provide advance notice.

Employers should ensure they understand the different notice rules and keep communication open with employees during what can be a difficult time.

Reclaiming Statutory Neonatal Care Pay

Employers may be able to reclaim some or all of Statutory Neonatal Care Pay from HMRC, in the same way as other statutory family payments.

Employers reclaim the Statutory Neonatal Care Pay through their usual payroll reporting process.

Businesses should make sure:

• Payments are recorded correctly
• Payroll records are kept up to date
• Claims are submitted correctly

Accurate payroll processing is particularly important when managing new statutory payments.

What If an Employee Does Not Qualify?

If an employee requests neonatal care leave or pay but does not meet the eligibility requirements, employers should explain this clearly.

Employees who are not eligible for Statutory Neonatal Care Pay may still be entitled to take neonatal care leave if they meet the leave criteria.

Employers should avoid making assumptions, check each situation carefully and seek guidance where needed.

How Small Businesses Can Prepare

Although neonatal care situations may be relatively uncommon, having a clear process in place means you can respond confidently when they do happen.

Small businesses should consider:

• Adding neonatal care leave to their family leave policies
• Making sure payroll teams understand the new payment rules
• Training managers on how to handle sensitive family situations
• Keep communication open and supportive throughout the employee's leave

For employees, having an employer who listens and offers support during this period can make a significant difference.

Final Thoughts

Neonatal Care Leave and Pay gives parents additional support during one of the most difficult experiences they may face.

For employers, understanding the rules helps ensure employees receive the correct support while keeping payroll accurate and compliant.

Supporting an employee through neonatal care requires understanding, flexibility and a clear process. By preparing in advance and understanding the steps involved, employers can provide the right support while meeting their legal responsibilities.