Paying employee 100% of salary while furloughed
Given that employers have the option of paying furloughed staff the 20%, not being reimbursed by HMRC, in order to
calculate the employers NI which relates to the 80% (this is part of the reimbusement from HMRC and therefore submitted online),
is it a case of processing salaries on the payroll software @ the usual 100%, then reading the bands in order to make the calculation of the er's NIC split (between 80% & 20%)?
Or
do most payroll software have a "furlough employee" option, which then automatically makes the calculations for the 80/20 split?
Thanks in advance.
Replies (15)
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Have a look at the step-by-step guide - it should help you make the necessary calculations.
https://www.gov.uk/government/publications/coronavirus-job-retention-sch...
I was running some salaries through HMRC CJRS calculator earlier today and it said it couldn’t perform the calculations for those paying 100%. They said there may be an update to the site for this at a later date - not much good for those being pestered by the company director to get the claims in asap. We have paid a full months salary but have furloughed about half the work force for the last week of March. Can I not just calculate 80% of all the figures relating to that last weeks pay (as in prorated), or do I have to go through the manual process, which will take ages and leave my brain aching?
I have several clients who need to claim furlough for part of March. You work out 80% of eg Feb pay and then prorate it according to calendar days in March (assuming that you paid at least this much). Once you have your furlough figure, you can work out the Ers NI and Ers Pension payment per HMRC's guidance recently published.
If you upload the March payroll net to gross you can pick out the people/columns you need and add on columns at the RHS for furlough.
Yes, it's a nitpicking exercise, and I got caught out today half way through entering the details on HMRC's website when I realised that some people went back to work in April less than 3 weeks after being "furloughed".
So I've had to recalculate for the 3rd time and will try again tomorrow.
You need to read through the step-by-step guide, and if necessary, the related further guidance (link at the end of step 3) to see how to calculate the amount of furlough pay, Ers NI and Ers pension contributions.
https://www.gov.uk/government/publications/coronavirus-job-retention-sch...
and
https://www.gov.uk/guidance/work-out-80-of-your-employees-wages-to-claim...
There are worked examples for you to follow that should address most pay scenarios.
Im a lady!
My other post link did - although with that attitude I think I will remove it, freeloader on an Accountants forum for Accountants!
Though I wish they extended this to include Pension Contributions and EMP'er NI in relation to furlough pay instead of the full amount (including 20% top-up)