The new guidance includes how to calculate furlough pay for newly eligible employees who could not claim from 1 November 2020 but were reported on a Full Payment Submission by 2 March 2021. So a claim can be made for the first time for any period 1 May 2021 onwards.
Up to and including 30 June 2021 you can claim, and must pay the employee, 80% of their reference pay for the furloughed hours subject to the monthly, daily or weekly cap.
From 1 July 2021 the scheme will taper off, with employers making a 10% contribution to wages in July, and 20% in August and September. The employee though must still receive the full 80%. A worked example of a July 2021 claim showing the taper can be found here and in example 3.21 here.
Calculate how much you can claim
The key points from the new Calculate how much you can claim guidance are:
- If you’re claiming for a full month then use the £2,500 monthly wage cap
- If you’re claiming for any full weeks within a claim ie 1, 2 or 4 week pay frequencies, then use the £576.92 weekly wage cap
- For any other pay frequency, or a claim length that isn’t exact weeks, use the following maximum day rates multiplied by the number of calendar days in the pay period: see example 3.1 here. The maximum day rates are:
- £83.34 for April, June and September
- £80.65 for May, July and August
You are reminded that if an employee has had a pay increase/decrease this will not affect the reference pay that is used to calculate the grant and which must be passed on to the employee.
The CJRS policy intention has always been to put the employee back on to the pay they were on pre-furlough. Any worked hours must be paid based on their current terms and conditions. Depending upon their eligibility their reference date is:
- The last pay period on, or before, 19 March 2020 for those reported on RTI by this date so eligible from March 2020 even if not claimed for before 1.11.20
- The last pay period on, or before, 30 October 2020 for those reported on RTI between 20 March 2020 and 30 October 2020 so eligible from 1 November 2020 onwards
- The last pay period on, or before, 2 March 2021 for those newly eligible from 1 May 2021 see examples 2.7 and 3.4 here. An employee is eligible from 1 May 2021 if they were reported by 2 March 2021 even if their first pay period was after that date see examples 2.3 and 3.8 here
For variable pay employees with a 19.3.20 reference date you must continue to calculate their usual wages as the higher of:
- The average wages in 2019/20; or
- The corresponding period in 2019 – the relevant year changed from March 2021 claims onwards to consider 2019 rather than 2020. If the employee didn’t work for you in the corresponding period in 2019 use the average in 2019/20 see examples 3.9 – 3.11 here
For variable pay employees with a 2.3.21 reference date calculate 80% of their average wages and usual hours from the date they started work for you until the day before they were first furloughed on or after 1 May 2021 see examples 2.14 and 3.16 here
Change in relation to statutory leave and wages for variable pay employees
For claim periods up to and including 30 April 2021 continue to count the wages and calendar days that the employee was not receiving normal pay due to being:
- On sick leave and receiving only SSP
- On any family related leave and receiving only statutory pay
- Receiving less than full pay after SSP or a family-related statutory payment has expired (referred to as ‘reduced rate leave’ in the guidance and legislation)
For claim periods from 1 May 2021 onwards, discount the days and pay related to periods of sick, family-related leave or reduced-rate leave unless the only wages received during their reference period were for these kinds of leave in which case they will have to form the reference pay. See examples 3.14 and 3.17 here.
Statutory leave and fixed rate employees
For fixed rate employees, who have any hours on annual leave, sick leave or statutory leave in their reference pay period do not make any adjustment to their usual hours eg for someone who works 40 hours a week who has 10 hours of unpaid leave, their usualhours remain at 40 hours per week see example 2.5 here.
For claim periods from 1 May 2021 for a variable pay employee who has a reference date of 19 March 20 or 30 October 20 you may need to include days of employment and wages paid by their previous employer.
Calculating usual hours – the roundings query
One area of confusion that has remained since the introduction of flexi-furlough last July is how to round usual hours. If the usual hours are being calculated for a whole claim period rather than an individual pay period within a calendar month then the usual hours are always rounded up – see example 2.3 here.
If the claim is for each weekly pay period in a calendar month the usual hours are rounded down see example 2 here.