With the news that the government has again extended Furlough until April 2021 we thought we would clarify the calculations to help you.
The Calculation
> The maximum amount that can be claimed is up to £2,500 a month (£576.92 a week)
> To work out 80% of your employee’s wage.
– Start with the wage payable for the period (if the pay varies use the amount that they earned in the same period last year or take an average monthly wage)
– Divide by the total number of days in the pay period you are calculating for (e.g. if payroll is monthly then it will be 30/31 days)
– Multiply by the number of furlough days you are claiming the money for ( e.g. 31 days if December)
– Multiply by 80%
> The outcome will determine if you claim either £2,500 (if 80% of your employees wage is larger than £2,500) or 80% of the wage (if smaller than £2,500)
For Example
Employees Salary: £20,000 per year / 12 (months) = £1,666.67 a month
Pay period: December (31 days)
Number of furlough days (furlough start date – furlough end date): from 01/12/2020 to 31/12/2020 = 31 days
Calculation: £20,000/12/31*31*80%= £1,333.33
Answer: £1,333.33 is less than £2,500 therefore £1,333.33 should be claimed from HMRC
Please contact us for more information.
We know these are difficult times so please do get in touch if we can help you, or if you need any further clarification regarding the furlough scheme.
Email: [email protected]