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Sage Payroll - Job Retention Scheme

Does anybody know if to process the full wage as a line on the payslip or 80% ?

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Hi, does anyone know for payroll purposes if for example someone's gross pay is £1,000 per month does 80% of this - £800 need to pe processed as a line on the wage slip with Tax & NI to come off or does £1,000 need processing?

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By SarkaT
25th Mar 2020 15:47

Same question. Our current thinking is the following:
1. Create a new pay element Furloughed pay. This element includes the pay for being furloughed, in the amount we will be paying to the employee.
2. In our case, for some staff the amount under 1/ is 80% of their pay.
3. For other staff, this will be more than 80%, as 80% would take them below NLW, so we have to top up in order to be compliant, as NLW is non-negotiable.
4. We keep a separate record of the calculated base pay that we will use as evidence for our claim to the HMRC when the system becomes available. For some, we will claim a full amount, for others (minimum wage staff), it will be a lower amount than we actually paid them.

Example:
Anna, normal pay 10 h @£20 per hour - payment processed as 80%x200=£160. Claim will be for £160.
Ben, normal pay 10h @£8.21 per hour - payment processed as £82.10, claim will be for 0.8*£82.10 = £65.68
Cecil, normal pay 10 h @ 9.00 per hour - payment processed as £82.10. (80% of £9.00 is £7.20, which is below minimum pay, so need to pay at least £8.21). Claim will be for £65.68

Input welcome. Thanks.

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Replying to SarkaT:
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By Yeadonian
25th Mar 2020 15:55

I don't think minimum wage comes into it. There are no hours worked, and the minimum wage is an hourly rate. Any pay to furloughed workers is therefore over the minimum wage.

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Replying to SarkaT:
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By rockallj
25th Mar 2020 16:00

Quote:

3. For other staff, this will be more than 80%, as 80% would take them below NLW, so we have to top up in order to be compliant, as NLW is non-negotiable.

Are your sure the NMW rules apply since, since the staff are not actually working for their pay?

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Replying to rockallj:
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By SarkaT
25th Mar 2020 16:06

Great, thanks. Please guys have a look and post what you think of this:
https://www.cipp.org.uk/uploads/assets/5d7b47d9-5f5c-4e24-bc82dc236774d0...

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Replying to rockallj:
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By SarkaT
25th Mar 2020 16:38

Ok, kind of replying to myself here, but I am on the clock, so have to think a lot about this.

While true the staff are not working for their pay, they continue to accrue benefits - holiday pay, SSP, pension. Also, while on zero hour contracts, we paid, i.e. contracted them for those 10h in my example, and I think the logic would have it we are now acting as if we contracted them again for 10h. And for those, they cannot get less then minimum pay.

Also, if somebody is a full time employee on minimum pay (contractual hours), then they need to receive a full pay equivalent x 80%. But by law, they cannot agree to have their wage reduced below minimum wage.

So that's my thinking - completely off the cuff and based on browsing the internet. Please keep talking if you have other arguments.

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Replying to SarkaT:
JCACE
By jcace
25th Mar 2020 16:05

You might want to check the actual requirements of the NLW/NMW legislation - the NMW Manual is very helpful.
That aside, we'll have to await the further details before being able to say much definitive.

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Replying to SarkaT:
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By Linda Cribb
31st Mar 2020 10:09

I have a weekly payroll on SAGE still not clear as to what I have to do. They have a varied hourly rate but the Director has agreed to pay a 40hr week for the next two weeks. How does this effect the staff if I have to furlough them after that and how do I do it?

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Replying to Linda Cribb:
RLI
By lionofludesch
31st Mar 2020 10:14

Are they working at the moment ?

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By Linda Cribb
31st Mar 2020 10:18

No they are not working at the moment as the Development Sites are shut for three weeks.

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Replying to Linda Cribb:
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By lionofludesch
31st Mar 2020 10:37

So they're already furloughed ?

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By SXGuy
25th Mar 2020 15:54

Unless someone can show me legislation which says otherwise. Which at the moment no one can.

I personally take the view that if you plan on paying staff the 20% record full wages.

I was under the impression that even if you only pay the 80%, 100% still needs to be recorded in some way to prove that it would have been their normal wage.

Otherwise we might get in a situation where payslips or fps submissions are evidence of pay and only 80% can be proven.

Its all speculative at the moment.

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Replying to SXGuy:
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By Luke5
25th Mar 2020 15:59

Thanks for your reply - surely the previous few months pay submissions of £1,000 each month in this example would be the evidence?

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Replying to Luke5:
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By rockallj
25th Mar 2020 16:01

Quote:

Thanks for your reply - surely the previous few months pay submissions of £1,000 each month in this example would be the evidence?

Only for those on the same pay month in, month out.
What about bonuses, holiday pay etc.

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Replying to rockallj:
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By Luke5
25th Mar 2020 16:05

Quote:

Quote:

Thanks for your reply - surely the previous few months pay submissions of £1,000 each month in this example would be the evidence?

Only for those on the same pay month in, month out.
What about bonuses, holiday pay etc.

Tricky situation isn’t it really, poor that nothings been put in place yet
What are you thinking to do? Put the full 100% wage through?

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Replying to SXGuy:
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By SarkaT
25th Mar 2020 16:11

But if you enter 100%, then payroll SW will calculate FPS on that basis, plus if you don't pay that to the employee, you will end up having a wage liability on your books.

I thought the whole idea of making this scheme available to PAYE workers was so that it could be checked against previous records.

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RLI
By lionofludesch
25th Mar 2020 17:56

Imho, you need to identify what you're going to reclaim from HMG and the furlough pay therefore needs to be on a separate line. Albeit it's amalgamated with the rest of the pay to work out the tax.

Who knows ? It's all new..........

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A Putey FACA
By Arthur Putey
26th Mar 2020 08:49

Pending detailed guidance don't you just process the pay as normal? Whatever you are paying them gross goes through payoll. If you make a wrong assumption about how the job retention scheme will work then you 'll have deal with that later.

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Replying to Arthur Putey:
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By SarkaT
26th Mar 2020 08:53

I think that misses the point that the JRS is for businesses that cannot really afford to process payroll as normal and make a wrong assumption.

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By NYB
26th Mar 2020 14:41

Beggars belief to me that so many people have energy to "assume" and "predict". Nothing is in place yet. WAIT.
As it clearly indicates on Gov.Uk latest its "reimbursement" via a " new online portal"

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Replying to NYB:
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By SarkaT
26th Mar 2020 19:35

And what is your advice to people that have to run payroll in the meantime, and are in the exact intended position for which this was set up - cannot afford to pay if the government does not help?

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Replying to SarkaT:
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By lionofludesch
26th Mar 2020 19:50

Agree. Payday's coming up. If we don't know, it's time to guess.

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By SarkaT
27th Mar 2020 12:35

Just to close the topic for everyone that comes here later, Govt just published guidance, available at https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus...

For my own questions posted here, the answer is very clearly that NMW does not apply.

Thank you all for contributing.

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Replying to SarkaT:
RLI
By lionofludesch
27th Mar 2020 12:42

Quote:

For my own questions posted here, the answer is very clearly that NMW does not apply.

I said that as well. No work, no minimum.

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Replying to lionofludesch:
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By SarkaT
27th Mar 2020 21:39

Well done on the knowledge. I guess I was hoping. Offering to cover £2500 is very generous, at that level the hit will be substantial, but not existential, as it will be for people on NMW and ZHC. Kind of thinking the government could have made it easier on themselves by making NMW the floor. Like this, they will be processing the same people twice - furlough grant and universal credit. Oh well. But agree that's outside the technical scope, and I bow to your superior unbiased interpretation. Thanks for playing.

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Replying to SarkaT:
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By lionofludesch
31st Mar 2020 11:36

Quote:

Well done on the knowledge.

It wasn't knowledge.

It was common sense.

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By Linda Cribb
31st Mar 2020 11:13

Yes they are, I have since found out that I have to take their average weekly wage from Jan, Feb and March 2019 to get a weekly gross wage then pay 80% of that.

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Replying to Linda Cribb:
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By Molly Stage
31st Mar 2020 20:12

Where did you get this information, as I have spent all day calculating the previous 12 month period to get the average.

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By MaggieRob
25th Apr 2020 14:05

This all depends on how much you are paying, if you are paying the full 100% then it all must be shown, if you are only paying them the 80% then only the 80% must be shown and tax and NI deducted on the 80% figure as normal.
I have created a separate pay description of Furlough Pay to keep the figures separate from standard pay.

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