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CJRS which calculation method?

Fixed or variable? Weekly paid

Didn't find your answer?

Good morning 

our workshop staff are contracted to 39.5 hour week however they usually always are paid more than this due to overtime. Do I therefore use the variable or fixed method of calculating furlough claim? 

we have paid staff 100% wages for the last 5 weeks (from 22nd March) based on 39.5 hours basic a week. I thought I could manually apply for 80% of this however sage payroll produces very different figures via the new job retention module therefore assuming it is using the variable method based on last years earnings. 

thank you 

 

Replies (13)

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By neiltonks
28th Apr 2020 08:28

Employees who are paid for 0vertime fall into the variable pay category and should be calculated accordingly which, as you say, may well be what Sage is doing (I'm not familiar with Sage so I can't say for certain).

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By Matrix
28th Apr 2020 08:29

I would check their contracts and calculate yourself or, if you are worried, get an employment lawyer to check that you are paying the right amount per the contract. The payroll systems are just a guide.

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Replying to Matrix:
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By Cheshire
28th Apr 2020 08:33

Agree with you Matrix - OP calculate yourself.

Ive seen plenty of complaints about sage being wrong.

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By Wanderer
28th Apr 2020 08:50

Sage is probably calculating the amount you can reclaim.
The amount you have calculated that you pay your employees is between you and the employees.
These figures can be, and in your case are, different. The reclaim is not merely taking 80% of what you have paid the employee.

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By MaggieRob
28th Apr 2020 10:26

I was under the assumption that you can include regular overtime in the calculations, however I would calculate them manually as I have found the Sage calculations to be way out, but I think this is because it works in tax weeks and not in pay weeks if that makes sense?

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All Paul Accountants in Leeds
By paulinleeds
28th Apr 2020 11:06

Sage is taking monthly pay x 12 / 365.25 x number of days in the month.

I'm claiming 80% of regular monthly salary.

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Replying to paulinleeds:
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By Wanderer
28th Apr 2020 11:12

paulinleeds wrote:

I'm claiming 80% of regular monthly salary.

Which may well result in an invalid claim, if you haven't considered and if necessary brought into account the other factors under the regulations.
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By McCue1954
28th Apr 2020 11:26

Thank you for your comments. The Sage calculations are very strange!
Eg, an apprentice whom we only pay when he does overtime and therefore he has been paid nothing last 5 weeks however sage is saying 100% earnings £3.01, Furloughed Earnings is £16.78 and claim at 80% is £13.43.

This isn't regular overtime, it could be zero hours one week, 10 the next, 30 the next etc.

Another example is a site foreman and Sage report says 100% earnings £745.27, furloughed earning £4,15078 and 80% claim £3,213.16. Where is this 100% earnings £745.27 coming from?

Sorry for all the questions! Thank you.

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By Paul Morgan
28th Apr 2020 12:21

Hi,

If the employee's pay doesn't vary due to work performed and their pay is static, for full-time employees, you pay them the lower amount of either 80% of their salary before tax as of 19 March 2020 or £2,500. Fees, commission and bonuses must not be included.

Employer costs for National Insurance Contributions (NICs) and the statutory minimum auto-enrolment pension on the salary or £2,500 are claimed on top of this. Employers can top-up the amount paid to furloughed workers with additional voluntary contributions. These top-ups, and other additional costs such as NICs and pension contributions for the top-up amount, can't be reclaimed.

If the employee has been employed for a full 12 months prior to the claim, you can claim for the higher of either:

- The same month's earnings for the previous year.
- The average monthly earnings for the 2019/20 tax year.

If the employee hasn't been paid for a full 12 months, you can claim for an average of their monthly earnings since they started work. If the employee started in March 2020, you need to pro-rata their earnings so far to claim.

You can find full info on how the Sage Job Retention Scheme Module performs the calculation here http://ow.ly/vLeo50zqwVc

Regards,

Paul
Sage UKI

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Replying to Paul Morgan:
By SteveHa
28th Apr 2020 12:27

Paul Morgan wrote:
Fees, commission and bonuses must not be included.

Hi Paul,

Take a look at https://www.accountingweb.co.uk/any-answers/odd-cjrs-calculation#comment... where the question of commission has been debated, and my final post there following a lengthy call to HMRC.

The devil appears to be in the detail, and the contractual rights.

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Replying to Paul Morgan:
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By Southwestbeancounter
28th Apr 2020 13:34

Thanks for that Paul.
I have already carried out my CJRS calculations up to 30/04 but now that the Sage module is up and running I thought I'd give it a go yesterday but couldn't decide where the figures came from - even the 80% of salaried staff who had been on the same gross wage for a very long time didn't come out the same - I guessed it was taking Christmas bonuses or something into account but I didn't have time to spend on finding out what was going on.

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Replying to Paul Morgan:
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By Wanderer
28th Apr 2020 13:48

Paul Morgan wrote:

Fees, commission and bonuses must not be included.

.....

Paul
Sage UKI

Bit of a sweeping statement there Paul.
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By Paul Morgan
06th May 2020 09:07

Hi all,

Just a quick post to provide an update on our Job Retention Scheme module in Sage 50cloud Payroll.

We're constantly working on improving the module to make the claim process as easy as possible. We've updated the module and made improvements based on updated guidance and customer feedback. This includes changes to:

 How the module calculates claim amounts for part furloughed employees. The calculations are made using the same method as HMRC.
 How the daily rate is calculated.
 Enable the ability to process top up pay.
 Improve the user interface to make processing easier.

You can access our guide to using our Job Retention Scheme module here http://ow.ly/oHtr50zycSo

Regards,

Paul
Sage UKI

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