The Coronavirus Job Retention Scheme (CJRS) has been in place for over a whole year now. With this milestone comes changes to how an employee's furlough pay should be calculated. If you’re in a position where employees are fully furloughed, you do not need to work out the employee’s usual hours and furloughed hours. However, if an employee is flexibly furloughed, you will be required to work out the employee’s usual hours, their actual hours worked and their furloughed hours for each claim period.
Regardless of whether these workers were actually placed on furlough, the following three rules should be followed when working out furlough pay.
For workers who were not eligible for furlough under the original scheme, for example, new joiners after the previous cut-off date of 19th March 2020, a different pay reference period exists.
Where these employees are contracted to work a fixed number of hours, the calculation is based on the wages payable in the last pay period ending on or before 30th October 2020.
Where neither 19th March 2020 nor 30th October 2020 reference dates apply, the employee is not eligible for periods starting before 1st May 2021. If you made a payment of earnings to the employee which was reported to HMRC on an RTI submission between 31st October 2020 and 2nd March 2021, they may be eligible for periods starting on or after 1st May 2021 and their reference date will be 2 March 2021.
For other employees, you’ll calculate ‘usual hours’ based on the average number of hours worked in the 20/21 tax year up to the day before the employee’s first day spent on furlough on or after either:
If you would like further information on how the furlough scheme rules are going to change between now and September 2021, join us for our upcoming free webinar where we will examine these changes and what they mean for your business.