New Guidance for calculating Furlough Pay released
On 11 September 2020, HMRC amended its guidance on how employers should calculate the amount of a claim under the Coronavirus Job Retention Scheme (CJRS) to include a new method of calculation for employees whole furlough or flexible furlough ceases partway through a claim period.
To calculate how many furloughed hours can be claimed in respect of each employee, an employer must work out that employee’s usual working hours in the claim period as well as the number of these hours that the employee has worked and has not worked.
The guidance now states that, when claiming in respect of an employee who comes off furlough or flexible furlough partway through a claim period, an employer should:
- Only calculate the employee’s usual hours up to the last day of furlough, instead of to the end of the claim period.
- Not include any working hours after the last day of furlough.
This applies even if the claim period includes days after the employee’s last day of furlough (for example, because the employer is claiming for multiple employees and some of them stay on furlough).
The amended calculation should be used from 14 September 2020 but employers do not need to amend claims submitted prior to this date.
HMRC’s worked example of how to calculate 80% of wages for a fixed-rate employee who returns to working their usual hours during the claim period (which can be found here) has been updated to reflect the new method of calculation.