So time to get you up to speed with the ever changing world of payroll. In September, furlough pay will continue to be calculated at 80% of usual pay however, you will only be able to claim 70% of usual pay back.
This means you have an effective claim rate of 87.5% of furlough pay. Let’s put some numbers to it:
- Salary as of Feb 20 (base month for claim) £1,800;
- Fully furloughed pay due to employee is 80% of that £1,440, and
- Furlough claim for September will be 87.5% of that figure being £1,260.
NOTE: This is also 70% of the number you first thought of (being £1,800).
In October, this claimable amount drops to 60% of base pay – or 75% of the furlough pay:-
- Salary as of Feb 20 (base month for claim) £1,800;
- Fully furloughed pay due to employee is 80% of that £1,440, and
- Claim for October will be 75% of that figure being £1,080.
NOTE: This is also 60% of the number you first thought of (being £1,800).
Maximum payments
Following the maths then – what happens to our monthly limit of £2,500? Again, if furloughing, you must continue to pay the employee at the maximum amount of £2,500 if eligible. For claiming:
- In September the grant claim is reduced to 87.5% of £2,500 being £2,187.50, and
- In October the grant claim is reduced to 75% of £2,500 being £1,875.
The effect of all of this is that in September the employer must contribute 10% of usual pay (subject to £2,500 cap) to the cost of furloughing the employee and in October this goes up to 20%. From November as things stand there will be no further grants available.