Paying employee 100% of salary while furloughed

Paying employee 100% of salary while furloughed

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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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JCACE
By jcace
20th Apr 2020 15:36

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...

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By Moonbeam
20th Apr 2020 16:34

Why do you ask? What does your own software do?

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Replying to Moonbeam:
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By [email protected]
20th Apr 2020 16:50

I use HMRC RTI tools

I guess it doesn't do so (I'd be surprised) given how complex the calculation is (remember you have to split by furlough / non-furlough periods, and split the NIC by the 80/20 % elements)....

I'll be interested to see if the gov.uk site cover examples of employer topping up above the 80% reimbursement.... if so , would be somewhat useful and pertinent given the number of employers likely to top up salaries....

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Replying to [email protected]:
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By ohwhatnow
20th Apr 2020 19:13

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?

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Replying to ohwhatnow:
By Moonbeam
20th Apr 2020 19:49

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.

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Replying to Moonbeam:
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By [email protected]
20th Apr 2020 20:01

The most efficient way to determine the 80/20 split (for topped up employees) will possibly be to run the payroll at 80%, note down the Ers NI & pension payment.

Then delete those payments, and run again at 100% (this time submitting through RTI), note all the new amounts, deduct 100% values from 80% values to arrive at the amounts which will be the contribution by the Employer.

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Replying to [email protected]:
JCACE
By jcace
20th Apr 2020 22:44

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.

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Replying to jcace:
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By [email protected]
20th Apr 2020 23:50

Here's to hoping

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Replying to jcace:
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By [email protected]
22nd Apr 2020 13:38

"Use the calculator
This calculator can currently be used to work out what you can claim for most employees who are paid the same amount each pay period (for example, weekly or monthly).

The exceptions to this are if employees:

receive any top-up pay in the claim period"

Here you go, jcace, have a read...

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By Cheshire
22nd Apr 2020 13:46

Jcace wasnt pointing you to the calculator but to the rest of it!

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Replying to Cheshire:
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By [email protected]
22nd Apr 2020 14:08

"There are worked examples for you to follow that should address most pay scenarios."

Here you go , Cheshire

They don't cover top-ups, me lad, the original question.

As I use HMRC Basic Tools, I'll calculate @80%, then note Ers NIC figures for furlough submission, delete the payments, process including top up @100%.

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Replying to [email protected]:
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By Cheshire
22nd Apr 2020 15:15

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!

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By Mr Hobbit
20th Apr 2020 19:10

Brightpay offers a 'furlough employee option' which is a great help.

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Replying to Mr Hobbit:
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By Twa
20th Apr 2020 19:47

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)

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By Cheshire
22nd Apr 2020 15:15

Try
https://www.........

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