Recording Statutory Neonatal Care Pay (SNCP)

Summary

A step-by-step guide on how to enter neonatal care details in Sage Payroll.

Description

By law, you must pay an employee Statutory Neonatal Care Pay (SNCP) if they're eligible for it.

Sage Payroll includes the latest legislation and makes this easy by calculating SNCP for you.

Resolution

Before entering leave details

If an employee has already booked a period of another parental leave, e.g Paternity leave or Shared Parental leave, SNCP should be fit around these. This is in line with legislation
An employee must complete any Maternity (SMP) leave or Adoption (SAP) leave before taking SNCP. Enter a start date after these parental payments end
An employee needs to supply details of the neonatal care. This can be done either by providing an NEO3 form or in writing. Sage will assess the employee and determine if they’re eligible. For more information about eligibility, read Statutory Neonatal Care Pay (SNCP) - qualifying rules

Entering the leave details

You enter the details of the neonatal care leave when you process the pay run. Do this in the ABSENCES screen.

NOTE: Employees can't take holiday or get holiday pay while on neonatal leave.

▼Steps to enter leave

Select Pay Runs from the menu bar
Select Process Pay Run for the required pay cycle.
Check the pay date is correct, then select Next.
Select the relevant employee. Select Add Absence then Neonatal.

Complete the following information:

Date child entered care	Enter the date the child entered neonatal care.
Documentation Received	If the employee has notified you using form NEO3, choose Yes.
Qualifying Week	This is automatically set by the system and based on the original parental leave details.
Actual Date of Birth	The date the child was born
Start Date	The date the employee wants to start their neonatal care leave.
End Date	The date the employee wants to end their neonatal care leave.
Average Weekly Earnings	The average amount the employee earns. This calculates based on the qualifying week.
Select Pension Settings - Pension Earnings	To include SNCP in pensionable earnings, select this check box. For more information about pensionable earning, read Common pension terms.
Qualifying Earnings	To include SNCP in qualifying earnings, select this check box. For more information about qualifying earnings, read Common pension terms.

Select Save.

Payroll calculates SNCP in whole weeks only, from the neonatal start date. For example: If the neonatal starts on Wednesday, the week would be Wednesday to the following Tuesday.

If there’s not enough information to calculate the Average Weekly Earnings (AWE), you’ll see two options:

Issue Certificate	If the employee doesn't qualify for SNCP due to earnings below £125, select the link. Then give them the form.
Manually set the AWE value	You may have changed Payroll systems part-way through the tax year, meaning this information is held in your previous software. You can select Manually set the AWE value and enter the figure. It is your responsibility to calculate this.

Select Save.
Complete the rest of the pay run as normal.

Linked absence

If there's an existing SMP or Parental (SPP) record, the SNCP can use the Qualifying week and Average weekly earnings (AWE) of these statutory payments.

NOTE: If you override the AWE for SNCP, there will be no link to the other records. If this was done in error, you must remove the SNCP record and add it again.

Existing SMP record

▼Criteria to meet

The start date of SMP is prior to the date of birth in SNCP and within 11 weeks of the child due date
The date starting SNCP is after the child due date

▼Example dates

SMP	SNCP
Child Due Date: 11/05/2025	D.O.B: 11/05/2025
Qualifying week: 26/01/2025	Date entered care: 18/05/2025
Start Date: 23/02/2025	Start Date: 30/12/2025
End Date: 29/12/2025	End Date: 06/01/2026

Existing SPP record

▼Criteria to meet

The start date is on or after the date of birth
The end date is within 68 weeks after the date of entering SNCP
If there are multiple instances of SPP, then the last instance before the SNCP is to be used
If no instance prior to to SNCP then the first instance after is to be used

▼Example dates

SPP	SNCP
Child Due Date: 11/05/2025	Date entered care: 18/05/2025
Qualifying week: 26/01/2025	DOB: 11/05/2025
Start Date: 28/05/2025	Start Date: 19/05/2025
End Date: 11/06/2025	End Date: 26/05/2025
	Qualifying week: 26/01/2025

Pensions

Employers need to keep paying pension contributions while employees are on neonatal leave. Base these contributions on the employee's pay before their leave. You can set the pension contribution to a fixed amount in the pay run using the Manage contributions option. When the employee returns, you can change it back. For more information, read How to handle employer pension contributions for employees receiving statutory pay.

Stop the SNCP payment

If the employee returns to work early, change the End date in the absence record.

CAUTION: Don't delete the neonatal record. This will cause Payroll to issue a refund.

▼Steps to stop

Go to Pay Runs, then select Process Pay Run.
Select Next.
Select the relevant employee. Select the Neonatal absence.
Change the End Date as required.
Select Save.