Gaps in furlough pay calculation advice

Furlough pay calculations

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Reading the latest furlough pay calculations and related grant seems pretty time consuming – could they not have made these simpler? I still have questions for an employer who has furloughed employees from 14 April 2020:

1. I usually calculate a split month based on working days on annual salary (260 method), not pro-rata monthly (some have 4 day week). Is this acceptable?

2. For the period from 1.4.2020-13.4.2020, some salaried mployees have had their pay updated for the NMW. Does the furlough pay revert back to February 2020 for salaried employees or the updated NMW rates? Or, is it just the grant that is based on February 2020 salary?

3. For auto-enrolment, the employer uses tier 1 certification i.e. employee pays 5% gross and employer pays 4% on normal gross salary. What is the grant for the pension in this case? Do you have to re-work pension contributions based on 3% of qualifying banded earnings?

The grant will be claimed next month after the qualifying period of course, but it affects April 2020 payroll.

Any feedback appreciated. Thanks.

Replies (14)

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By NYB
18th Apr 2020 10:00

I cant answer your question but Im incensed at 10 pages of virtual un interpretable stuff.
And of course HMRC say "You must work it out this way"
Ive done all mine in advance to the best of my capability. I'm a whizz on payroll with software and understanding legislation. Less so on something that requires a spreadsheet and an Einstein mathematical brain. Luckily I have a co colleague who has done wizadry on that score.
It is supposed to be "uncomplicated". And why couldnt we have some sight of what the website will look like. They say they have a "checker". Thats fine and dandy with one straighforward employee.
And I stil havent got my head round casual zero hour contracts. I've just averaged it out.

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Replying to NYB:
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By Matrix
18th Apr 2020 10:03

I also did it all in the usual way I would apportion pay and now there is a different method.

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Morph
By kevinringer
18th Apr 2020 10:04

I want to make you aware that 3 documents were published on GOV.UK 17/04/20 evening which may help you.

1. New guide with worked examples at https://www.gov.uk/guidance/work-out-80-of-your-employees-wages-to-claim.... This addresses holiday pay including bank holidays.
2. New step-by-step guide at https://www.gov.uk/government/publications/coronavirus-job-retention-sch....
3. The employers guide has been updated (this is version 5) at https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus....

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By Matrix
18th Apr 2020 10:05

1. It is a day rate based on the number of days in the month so you will have to adapt that.

2. I understand that NMW does not apply during furlough.

3. You use the statutory 3% rate.

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Replying to Matrix:
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By brumsub
18th Apr 2020 10:22

Thanks - not sure all questions answered. As for number 2, I phoned Business Support Scheme (HMRC) on 0300 456 3565 Thursday and was told to include the updated wages for NMW for furlough pay calculations! But, I 'm not convinced until I get corroborating advice. I understand furlough pay can reduce salary to below NMW which is allowed but that is a separate issue.

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Replying to Matrix:
RLI
By lionofludesch
18th Apr 2020 11:02

Matrix wrote:

2. I understand that NMW does not apply during furlough.

They're working no hours. Whatever the NMW, their minimum pay is always going to be £0.00.

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RLI
By lionofludesch
18th Apr 2020 10:55

The biggest irritation to me is that I've already worked out pay, had the employers pay it on the understanding that they'll get it back and now HMRC have come up with a new method that depends on how many days there are in the month.

Remains to be seen how much difference it makes. I'm still wading through this stuff.

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Replying to lionofludesch:
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By Matrix
18th Apr 2020 10:46

Ditto. I am recalculating it their way on Monday. I may get a third answer on Moneysoft. Have you tried on there yet?

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Replying to Matrix:
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By lionofludesch
18th Apr 2020 10:59

Can't see anything on there that'll help me calculate the claim.

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Replying to lionofludesch:
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By Wanderer
18th Apr 2020 11:24

Update your Moneysoft program to Friday's version, it includes a claim calculation.
I'll be updating yet again on Monday because it's likely that Moneysoft will be beavering away over the weekend incorporating last night's HMRC guidance.

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Replying to Wanderer:
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By Wanderer
18th Apr 2020 11:30

Just published 18 April by moneysoft:-

moneysoft wrote:
UPDATE 18 APRIL 2020
At 17:10 on Friday 17 April 2020 (less than 72 hours before the claim portal is due to go live) HMRC contacted software developers by email to inform that they will be making major changes to the methodology used to calculate claim amounts under the CJRS.

In the meantime we have removed the step-by-step instructions to producing the claim report from this guide. We will update this page again as more information becomes available.

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Replying to Wanderer:
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By lionofludesch
18th Apr 2020 11:43

Wanderer wrote:

Just published 18 April by moneysoft:-

moneysoft wrote: UPDATE 18 APRIL 2020
At 17:10 on Friday 17 April 2020 (less than 72 hours before the claim portal is due to go live) HMRC contacted software developers by email to inform that they will be making major changes to the methodology used to calculate claim amounts under the CJRS.

In the meantime we have removed the step-by-step instructions to producing the claim report from this guide. We will update this page again as more information becomes available.

That'll be why I can't find it then.

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Replying to lionofludesch:
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By Wanderer
18th Apr 2020 11:55

You can still (yesterday's version of) the claim if you update the programme and go to Analysis > CJRS Claim Summary.
It'll probably be blank at present, if you haven't followed the guidance published yesterday, but now removed.
I happen to know moneysoft are working on possible further program updates, but unlikely that these will be ready for Monday.

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RLI
By lionofludesch
18th Apr 2020 11:17

I never really understood this method of apportioning salaries by including days when folk don't work at all.

If we count all days, surely the minimum wage should be based on a 168 hour working week.

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