Apr 2021


CJRS: Recent Changes to Furlough Reference Period Rules

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.

How to calculate hours for workers who were eligible for furlough under the original scheme

Regardless of whether these workers were actually placed on furlough, the following three rules should be followed when working out furlough pay.

  • For employees with fixed hours, the usual hours calculation is based on their normal contractual hours at the end of the last pay period ending on or before 19th March 2020. If an employee with fixed hours was on annual leave, off work sick, or on family-related statutory leave at any time during the last reference period, the usual hours should be calculated as if the employee had not taken that leave.
  • Where the employee’s pay varies, their ‘usual hours’ will be the higher of the average number of hours worked in the 2019/20 tax year or the hours worked in the corresponding calendar period in the year before the furlough claim period.
  • As we have passed the one-year anniversary of the furlough scheme, where the furlough claim period is March 2021 onwards, the corresponding calendar period 2019 should be used, as opposed to 2020. This is to prevent the issue where an employee may have been furloughed in the same month last year, and so would only have received 80% of 80% of pay. If your employee did not work for you in the lookback period for the month you’re claiming for, you can only use the averaging method to calculate 80% of their wages.

How to calculate usual hours for workers who were not eligible for furlough under the original scheme

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:

  • 1 November 2020 (for those with a reference date of 30 October 2020)
  • 1 May 2021 (for those with a reference date of 2 March 2021)

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.

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