Manually Calculate Your Employees' Statutory Neonatal Care Pay: A Guide for UK SMEs

Manually Calculate Your Employees' Statutory Neonatal Care Pay: A Guide for UK SMEs

Statutory Neonatal Care Pay (SNCP) is a crucial aspect of payroll management for SMEs, especially when managing employees who have a child requiring neonatal care. In this guide, we break down the latest HMRC guidance (updated 03/03/2025) on calculating SNCP manually, ensuring compliance and accuracy.

What is Statutory Neonatal Care Pay?

SNCP provides financial support to eligible employees whose child requires neonatal care within the first 28 days after birth. To qualify, the child must spend at least 7 continuous days in neonatal care. The guidance outlines how to calculate SNCP based on average weekly earnings and the relevant period.

Key Terminology Explained

• Qualifying Child: A child who enters neonatal care within 28 days of birth and remains there for at least 7 days.

• Relevant Week: The week used to calculate average weekly earnings, which aligns with other statutory payments like SMP, SPP, or SAP where applicable.

Calculating Average Weekly Earnings

To determine eligibility, average weekly earnings must be at least £125 (for the tax year 2025/2026). This calculation includes all earnings subject to Class 1 National Insurance contributions or that would be liable if the earnings were high enough.

1. Identify the Relevant Period: Typically, this is an 8-week period ending in the relevant week.

2. Consider Payment Patterns: Adjust calculations for employees paid weekly, fortnightly, or monthly, especially if irregular payments or bank holidays affect the pay schedule.

3. Include Adjustments: Factor in backdated pay rises, salary sacrifices, or irregular pay patterns to ensure accuracy.

How Much Should You Pay?

The weekly SNCP amount is the lower of £187.18 (from 6 April 2025) or 90% of the employee's average weekly earnings. Employees can take up to 12 weeks of SNCP, either in a single block or multiple one-week blocks, and must take it within 68 weeks of the child's birth.

Managing Part-Weekly Payments

To align with normal pay periods, SNCP can be paid in part weeks. For instance, if an employee’s pay period spans across two months, you may split the payment proportionately.

Important Compliance Points

• SNCP cannot be interrupted mid-week by another statutory leave. Full payment must be made for the entire week even if the leave is interrupted.

• Always recalculate average weekly earnings if a backdated pay rise affects the relevant period.

Additional Resources

For further information and guidance, visit the official HMRC website to manually calculate Statutory Neonatal Care Pay: HMRC website and the ACAS website. These resources offer comprehensive details about Statutory Neonatal Care Pay and other employment rights.

Need Assistance?

For more details or personalised guidance, visit the HMRC Employer helpline.

By understanding and correctly applying SNCP regulations, SMEs can ensure compliance and support their employees during challenging times. At Givver, we help streamline your payroll processes, keeping you compliant and stress-free.