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furlough pay (yet again)

How much to process in payroll software

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Morning

I have to process my first weekly furlough pay.  I know this has been asked already but I've got to file today and am tearing my hair out.

Obviously if we process 100% of salary then tax/ni/pension etc applicable to 100% when employee will in reality only receive 80%.  Client cannot afford to top up to 100% as self employed herself with no income.  I feel if we enter 80% as gross then the furlough rebate will be 80% of 80%.

I've rung the employers helpline who said I need to speak to the Covid-19 team who deal with these questions.  Was given 0800 0241222.  I've rung that, it's rubbish.  Every option said to press 1 which I eventually did and after a message it hung up.

I've emailed Moneysoft who have kindly replied quickly to say they have no idea, no one does.

What's everyone going to do for weekly staff that have to processed today/tomorrow please?

 

Replies (13)

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By mbee1
26th Mar 2020 11:47

Sorry can't help and I refuse to do weekly payrolls. However, the employer can't say she cannot afford to top up the 80%. It all boils down to the contract of employment and what it says in that. Unfortunately, if it doesn't say anything no one knows what to do!

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Replying to mbee1:
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By susieq
26th Mar 2020 12:53

I understood that the employer doesn't have to top up to 100%, if the employee has agreed to be furloughed.

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Bramble
By Chris.Mann
26th Mar 2020 11:51

"I've emailed Moneysoft who have kindly replied quickly to say they have no idea, no one does."

However, they do provide useful advice as regards the designation of gross payments, to Furlough employees -https://moneysoft.co.uk/support/coronaviruscovid-19-faq

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By rmcouk
26th Mar 2020 12:26

Best article I have found so far (and it's ICAEW):
https://www.icaew.com/insights/viewpoints-on-the-news/2020/mar-2020/coro...

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RLI
By lionofludesch
26th Mar 2020 12:31

One thing we're pretty clear on is that the employer can reclaim 80% of the employee's normal wages costs. Whether the employer tops this up at his own expense is up to him.

There are, however a number of other issues, such as sole directors and folk who get paid variable amounts, on which we still have little or no guidance.

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Replying to lionofludesch:
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By rmcouk
26th Mar 2020 12:36

I have read that sole directors can be included in the scheme if they can (credibly) be furloughed. Dividends are not covered.

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Replying to rmcouk:
RLI
By lionofludesch
26th Mar 2020 12:53

rmcouk wrote:

I have read that sole directors can be included in the scheme if they can (credibly) be furloughed. Dividends are not covered.

I'm with you.

But how much credence can you place on the source ? Is it just another bloke with no more idea than you or is it some official HMG pronouncement ?

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Replying to rmcouk:
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By acceje
26th Mar 2020 12:54

The ICAEW are making that judgement but they have not backed this up with fact. There is little detail and I am not giving this advice as it may turn out to be wrong when the scheme is up and running.

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By rockallj
26th Mar 2020 13:39

We don’t know. Nobody does.

ICAEW seems to suggest that the 80% “wages costs”are salary+ Er’s NICs + Er’s pension contribution. Don't think it is the gross salary only.

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By susieq
26th Mar 2020 13:47

What would make sense to me would be to show the full amount of gross pay with a pre tax deduction of 20% of this marked as furlough restriction to 80%. Then the furlough pay would be shown in full but the tax/ni/pension would be calculated on the actual amount. Otherwise the employer will have a payslip showing a net amount that they have to mess about with working out a 20% deduction - and they would no doubt take 20% off the net pay which can't be correct? Obviously if the employer is able to top up to 100% then this wouldn't apply.

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Replying to susieq:
RLI
By lionofludesch
26th Mar 2020 14:08

susieq wrote:

What would make sense to me would be to show the full amount of gross pay with a pre tax deduction of 20% of this marked as furlough restriction to 80%. Then the furlough pay would be shown in full but the tax/ni/pension would be calculated on the actual amount. Otherwise the employer will have a payslip showing a net amount that they have to mess about with working out a 20% deduction - and they would no doubt take 20% off the net pay which can't be correct? Obviously if the employer is able to top up to 100% then this wouldn't apply.

Do that and you've no clear record of the furlough pay you're intending to reclaim.

I'm recording the furlough pay separately + anything else on the normal gross pay column.

I still have a problem in apportioning the NI and pension but at least the numbers are smaller.

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Replying to lionofludesch:
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By susieq
26th Mar 2020 15:04

Sorry I'm not following why you think there would be no record of the furlough pay to reclaim? I use Moneysoft and have set a separate pay column for furlough pay (as per their guidance). So would put 100% in the furlough pay column, and then have a separate deduction column for the 20% restriction. I could then run a report showing furlough pay in the period (which would be the full amount). Depending then on how the portal works I would have all the figures to hand but the employee is only being taxed on the true gross figure. Net pay would balance to the wage control. Might not be correct but not seeing why you think I wouldn't have a clear record?

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Replying to susieq:
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By lionofludesch
26th Mar 2020 15:14

If it works for you, that's grand.

It's not for me to impose anything on you.

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