Notice pay during Furlough

How to calculate notice pay during furlough

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Hello,

One of my client has give notice of termination to an employee who was on furlough. Their last day will be 30 September and it is 1 month notice. Their contractual pay is £1,500 per month. I read on HMRC website that you can claim furlough for the notice period. However I am bit confused as to how much should the employee get paid gross. Will it be £1,200 (80% of £1,500) and the employer claims £1,050 in furlough? Or are they entitled to full £1,500, with employer claiming £1,050 in furlough and funding the remaining difference of £450 themself?

Any help will be greatly appreciated.

Many thanks

 

Replies (10)

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RLI
By lionofludesch
08th Sep 2020 15:20

I vote the full £1500.

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Replying to lionofludesch:
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By G JAin
08th Sep 2020 16:18

Thank you.
Also, if they are entitled to holiday pay then can the employer claim 70% of that through CJRS?

Thanks once again.

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Replying to G JAin:
JCACE
By jcace
08th Sep 2020 19:03

The employer can claim under the scheme if holiday is taken while on furlough. The employer can't claim for amounts of accrued holiday paid at termination, nor for pay in lieu ofnotice. Holiday pay should be paid at the full rate regardless.

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Replying to jcace:
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By G JAin
09th Sep 2020 09:36

Thank you.
Is there any link on HMRC website I can refer to which says so?

Many thanks

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Replying to G JAin:
Caroline
By accountantccole
09th Sep 2020 11:40

Depending on the number of days involved, if there is time, the employer could give notice of holiday now so some of September is holiday.

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Replying to accountantccole:
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By Paul Crowley
09th Sep 2020 12:26

Probably a bit late now
Notice to take holiday needs to be double the holiday period
eg 1 month holiday needs 2 months prior notice

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By NYB
08th Sep 2020 15:34

Top up to £1500.

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By PandoraSleeps
08th Sep 2020 18:23

I believe it depends on whether the notice is statutory or contractual. This link might be helpful: https://www.gov.uk/government/news/new-law-to-ensure-furloughed-employee...

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By accountaholic
09th Sep 2020 12:53

If they stay on the books until 30 September I think you have to pay their full pay during the notice period, but can claim back the furlough which is only 70% for September, so the employer suffers the cost of 40% plus the NI and pension. If you finish the employee straight away and make a payment-in-lieu of notice, you can't claim furlough at all so the employer suffers the whole cost.

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By kathyk0410
11th Sep 2020 20:35

These calculations are becoming an every day occurence. You have to uplift the furlough to 100% so you will have to pay the full £1500 and claim the 70% . Most of our contracts and termination letters say that you have to take your accrued holiday during your notice but as Paul says you have to give double the notice so maximum holiday in September would be 11 days - so check the agreement and also check whether the employee was paid for BHs. We found that at the time (April and May) the view was that they could take them at another time before the end of 2021 so most of ours weren't uplifted to full pay. This together with hardly any holiday being taken in Jan-March means that there is some holiday payable on top of the full salary. Be thankful the termination is at the end of the pay period as most of mine straddle the month end which makes things a lot more complicated!
This is always a thought at the back of my head - what is the difference between an employee on PILON and one on furlough ... ie why would say someone pay PILON as the poster above says you can not offset furlough against PILON. Currently looking at a solicitors settlement agreement and no mention of furlough but does say that payments needs to be made within 28 days but notice is 5 weeks.

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