I have been arranging holiday pay on weekly payrolls in the last few weeks for clients, whereby the Furloughed employees receive 100% at current NMW rates and in other weeks their Furlough Pay has been shown under a seperate heading on the payslip.
A monthly payroll client has asked for his Furloughed staff to receive 1 weeks holiday pay in their months pay, and I am wondering if I am looking too deeply into the calculations as am unsure about something. The employer has claimed furlough for the 31 days in May and I understand that the pay needs to be topped up by 20% for holiday pay, and also increased to reflect current NMW rates.
The employer wants the holiday pay shown in full on the payslip with the remaining Furlough pay shown under a separate heading. When I calculate the weeks holiday pay (which is for 5 working days) at current NMW rates. In the month of May under HMRCs Furlough guidance for variable pay employees, you divide the annual figure by 365 days then multiply by 31 days for May (which has been claimed). On the payslip, giving one weeks holiday pay (which equates to 5 working days), do I reduce the furlough pay on the payslip amount, by 5 days of the HMRC calculation or by 7 days? My line of thinking is that HMRC are treating a week as 7 days.
The employer does not want to underpay the employees the correct amount of Furlough pay in this scenario.