In　this　letter,　a　layered　scaled　extended　min-sum　(LSEMS)　algorithm　is　proposed　to　decode　non-binary　low-density　parity-check　(LDPC)　codes　in　physical-layer　network　coding　(PNC)　systems.　The　proposed　LSEMS　algorithm　is　developed　for　the　joint　channel　decoding　and　physical-layer　network　coding　(JCNC)　over　wireless　fading　channels.　It　proposes　a　sequential　update　of　check　nodes　to　decode　the　exclusive　ORed　(XORed)　codewords　that　are　generated　by　the　non-binary　LDPC　codes.　The　LSEMS　algorithm　achieves　almost　the　same　decoding　complexity　as　the　scaled　extended　min-sum　(SEMS)　algorithm,　while　it　benefits　from　much　less　complexity　than　the　reliability-based　layered　BP　(RLBP)　algorithm.　Simulation　results　show　that　the　LSEMS　algorithm　outperforms　the　conventional　SEMS　algorithm　by　about　0.5　dB　in　non-binary　LDPC-coded　PNC　for　both　q-level　pulse　amplitude　modulation　(q-PAM)　and　q-ary　phase　shift　keying　(q-PSK)　modulations.　©　2012　IEEE.