Share this content

Gov't CJRS calc calculating wrong ERS NI?

I cannot arrive at the same figure for ERS NI as the Gov calc. See below

Didn't find your answer?

Monthly salary 2,500

Furloughed 23rd March (didn't work this day)

Claim upto 31st March

9 days furlough (9/31 x 2500 = 725.81 x 80% = 580.65

ERS NI claimable should be

2500 less 719 = 1781, x 13.8% = 245.78

245.78 x 9/31 = 71.35

The government calc gives 65.61 and I cannot see why.  Either I am wrong or they are!

I input the following:

What’s the start date of this claim?  23/3

What’s the end date of this claim? 30/4

When was the e'ee furloughed?  23/3

Has the employee’s furlough ended?  No

How often do you pay this employee?  Monthly

How is this employee paid?  Regular amount

On 19 March 2020, what was this employee getting paid each month?  2500

What’s the last day this employee was paid for before 23 March 2020?  29th Feb

What’s the end of the next pay period after 29 February 2020?  31st March

What’s the end of the next pay period after 31 March 2020?  30th April

What’s this employee’s pay date for the pay period ending 30 April 2020?  30th April

What is the employee’s National Insurance category letter?  A

Do you pay pension contr's?  Yes

Are you paying the employee more than this?  No

Result:  

Pay period ending 31 March 2020
£580.65 - Gross furlough amount
£65.51 - Employer National Insurance contributions

 

Replies (15)

Please login or register to join the discussion.

avatar
By DeathandTaxes222
22nd Apr 2020 15:46

Likewise - multiple issues with the calculator.

It looks as though they might have assumed that there are 30 days in March, and rounded up the NI?

8 / 30 x 246 = 65.60

The calculator seems to also assume a regular work pattern, but in reality, someone might have worked all their days at the beginning of a month, or the end, and been furloughed somewhere in the middle, so a calculation based on actual days worked, actual working days in the month (that's 22 this month btw), and days furloughed would give a completely different result to HMRC's "average".

I'm hoping that as long as we have a rational basis, they won't argue with how we've done it as long as it is fair & reasonable (and documented).

Thanks (2)
By Moonbeam
22nd Apr 2020 15:46

Assuming you made a typo here: "What’s the end date of this claim? 30/4", and you're only claiming for March, your calculations are per HMRC's "guidance" examples, so I would use your figures and not sweat about their calculator not working.

Thanks (1)
Replying to Moonbeam:
By Moonbeam
22nd Apr 2020 15:47

Ah No!!. HMRC guidance says take whole Ers NI for this employee for the month, divide by 31 and times by no. of days furlough.

Thanks (1)
RLI
By lionofludesch
22nd Apr 2020 15:50

Interesting question - works out at 8.275/31 of the NI.

But I'd be using my figures.

Thanks (1)
avatar
By Manchester_man
22nd Apr 2020 15:52

Thanks, glad I'm not the only one.

Also, if you look at their guidance at https://www.gov.uk/guidance/work-out-80-of-your-employees-wages-to-claim...

Scrolling down to the bottom third (roughly) where the heading is "If your employee is not furloughed for the whole pay period or you top up their pay", their example works out the ER NI in exactly the same way I have.

Furthermore, on a different point, surely their guidance is wrong, as in it, they are allowing employers to claim the ERs NI on 100% of the salary as opposed to 80%.

Thanks (1)
Replying to Manchester_man:
RLI
By lionofludesch
22nd Apr 2020 16:04

Imho they should be splitting the £719 between the two periods and then calculating the NI on the furlough bit. Bearing in mind there's reduced pay, there may be no NI.

However, the error's likely to be small and the calculation's tedious. I'm happy with something more broad brush.

Thanks (0)
Avatar
By I'msorryIhaven'taclue
22nd Apr 2020 16:07

I had a similar issue with HMRC's Calculator , and had input the Government Guidance Leaflet figures for Smith Ltd but couldn't get the two to tally.

See https://www.accountingweb.co.uk/any-answers/jrs-claim-online where the ultimate post, by Cath Walker, details her Eureka moment when she realised 2020 was a leap year and that the calculator assumes a 32 day period for March, because it includes 29th February. Does that work for you?

Thanks (0)
Replying to I'msorryIhaven'taclue:
RLI
By lionofludesch
22nd Apr 2020 16:20

It shouldn't do.

He reports entering 29th Feb as the previous payday. Notwithstanding it being Saturday.

Thanks (0)
Replying to lionofludesch:
Avatar
By I'msorryIhaven'taclue
22nd Apr 2020 20:53

Ahha, so he does. My mistake, Lion.

When I'd been stumped it turned out to be because I'd entered Friday 28th February as the previous payday, causing the calculator to adopt a denominator of 32 days for March's calcs. Hey-ho.

Thanks (0)
Replying to lionofludesch:
avatar
By gillybean04
23rd Apr 2020 23:35

lionofludesch wrote:

It shouldn't do.

He reports entering 29th Feb as the previous payday. Notwithstanding it being Saturday.

Not previous payment date. The end of the previous pay period.

Thanks (0)
avatar
By Coops
22nd Apr 2020 18:06

Rather than taking £2,500 as the starting point in your calculation of ERS NI, shouldn't this be the reduced salary for the month of £2,354? This is in line with the HMRC example, where the gross salary was £1,200 for the first 15 days and 80% of £1,200 for the next 15 days (based on April) . Using this method, I calculated a figure of £65.51 :

£2,354 - £719 = £1,635
x 13.8% = £225.63
x 9/31 = £65.51

Thanks (2)
Replying to Coops:
avatar
By unearned luck
23rd Apr 2020 18:25

But why would you work out NIC on £2,354 when the employee is being paid £2,500?

The example you need to follow in the guidance is where the pay is topped up.

In this case the OP has failed to perform the final step of only taking 80% of the sum he has calculated to date.

HMRC calculator gives the answer it does as it has been told that the pay isn't being topped-up

Either the OP, has like you said, started with a salary that is not being paid or he/she has answered the final question quoted wrongly.

Either way the OP's answer is wrong because of the failure to apportion the NIC in the furlough period between the furlough pay and the top up, if there is a top up..

Thanks (0)
Replying to unearned luck:
avatar
By Coops
07th May 2020 11:11

Hi Unearned luck. Sorry, I've only just read your reply. The HMRC calculator asked what was the base salary (£2,500) and whether the employer was paying more than this (i.e. has the company topped up the furlough pay above the minimum amount). As the OP answered "no" to the second question (incorrectly if the employee was still paid £2,500) then the calculation will assume the salary was £2,354.

Thanks (0)
avatar
By Payjam
06th May 2020 21:24

Same issue different dates. Our first furloughs started mid-April for a pay period covering a calendar month, pretty much in line with the example in the HowTo pages on Gov.UK. Their example gives NI of £92.07 but running it through the calculator gives a total of £98.53. Our employees received 100% pay throughout April again reflecting the example on the gov website.
Also it seems strange to me that the calculator asks for March salary when claiming for April costs & beyond. several of our employees received an increment on 1st April, so by that token it looks like we can't claim back 80% of the furlough cost - only 80% of what would have been paid if it started a month earlier!

Thanks (0)
Replying to Payjam:
RLI
By lionofludesch
07th May 2020 11:06

Payjam wrote:

Also it seems strange to me that the calculator asks for March salary when claiming for April costs & beyond. several of our employees received an increment on 1st April, so by that token it looks like we can't claim back 80% of the furlough cost - only 80% of what would have been paid if it started a month earlier!

You don't think it'd be too easy to jack up your employees' pay to, oh, say, £3125 a month while they were on furlough and get the Government to pay for it ?

You may not have thought of that little wheeze but the Government did.

Thanks (0)
Share this content