Furlough pay: How much do you get?

Caragh Bailey
18/09/2020
243
14 min read
furlough pay advice from employment law friend

Your employer can no longer claim your furlough pay back from the government for any period ending before the 31st October 2020.
The deadline to submit Furlough claims for February 2021 was 15th March 2021.

  • Your employer will pay you at least 80% of your wages (up to £2500) per month. If 80% of your normal wage amounts to more than £2500, you will receive £2500 only (before deductions). If you are fully furloughed this will be based on your normal wage.

  • The money from the government is paid to your employer and your employer is responsible for paying it to you. Your employer must pay you all of the money that they receive for you from the government furlough scheme (coronavirus job retention scheme).

  • They cannot place any administration charges or fees on this money, or other costs in connection with your employment.
    If you have authorised your employer to take other deductions from your wages, these can continue during furlough, as long as they don't conflict with the above.

  • From July 2021, the government pay furloughed workers 70% of their usual wages. The employer pays the other 10% of furloughed employees’ usual wages. Furloughed workers get paid 80% of their usual wages in total (up to £2500 per month)

    From August 2021, the government pay furloughed workers 60% of their usual wages. The employer pays the other 20% of furloughed employees’ usual wages. Furloughed workers get paid 80% of their usual wages in total (up to £2500 per month)


    Tax
    After your furlough pay has been calculated, you’ll continue to pay Income tax, National Insurance contributions, student loan repayments and pension contributions out of your furlough income, as normal. Your employer must deduct this from the total sum of the government contribution plus their contribution

  • Your employer can choose to pay you more than 10% of your usual wage if they wish.

I have been furloughed without pay.

If your employer has furloughed you using the coronavirus job retention scheme (govt furlough) they will be receiving the government contribution for your furlough.

If they are not paying you, they may be in breach of contract.

They may also be committing fraud.

If you are on temporary furlough from work, but your employer has not made a claim through the coronavirus job retention scheme, they are responsible for paying all of your furlough wages.

If they are not paying you, they may be in breach of contract.

If your employer has told you that you are on furlough and that they do not intend to pay you, they may be in breach of contract.
If you are on a zero hour contract they could have furloughed you under the coronavirus job retention scheme (government furlough) If your employer did not submit a claim for you before the 31st of July, (for three consecutive weeks between the 1st of March and the 30th of June) they will not be able to file a claim for you now.

If they cannot give you work, and cannot pay you:


How is my monthly pay calculated?

I’m a salaried employee
Furlough for salaried employees is calculated at 80% of your usual pay. That’s your usual monthly pay multiplied by 0.8. If this is more than £2500, you will receive £2500 (before deductions). Your employer will be able to talk to you about how your pay is calculated

My pay varies
Your furlough pay will be calculated at 80% of your usual pay. That’s your usual monthly pay multiplied by 0.8. If this is more than £2500, you will receive £2500 (before deductions). Your employer will be able to talk to you about how your pay is calculated.

When calculating your wages your employer must include all of the regular payments they make to you. Such as:

  • regular wages
  • non discretionary payments for overtime
  • non discretionary fees
  • non discretionary commission payments
  • piece rate payments

Non discretionary means it’s not a choice, these are payments that they are required to pay you in line with your contract of employment.

When calculating your wages your employer must not include discretionary payments. This means payments made to you by them or by a client because they felt like it, but they were under no obligation. Such as:

  • tips (including tips paid through troncs)
  • discretionary bonuses
  • discretionary commission payments
  • non cash payments
  • not monetary benefits, like a company car or benefits received under salary sacrifice schemes that reduce your taxable pay.

If you want to opt out of a salary sacrifice scheme, contact your employer. HMRC agree that Covid-19 is a ‘life event’ that allows for you to change your arrangement.

Calculate my furlough pay: What's my 'usual pay'?


I’ve worked in my current job for more than a year
Your employer will work out:
    1
    How much you were paid for the same month last year
    2
    Your average pay for the last tax year (the 6th of April 2019 to the 5th of April 2020) Your average pay is all of your pay for the last twelve months, added together and divided by twelve.
Your ‘usual pay’ is whichever of these two options is the highest.

I’ve worked in my current job for less than a year
Your employer will add up your wages for each of the full months that you worked and divide that total by the number of months. For example, if you have worked six full months, they will add up everything you earned in those six months, and divide that total by six.
This is your ‘usual pay’.

I was working for less than a month when I was put on furlough
Your employer will pro-rata your wages for that month. This means that they will work out what your monthly earnings would have been, if you’d continued to work at the same rate throughout that month.

For example, if you worked for one week, they would multiply your earnings by 4.35, because there are 4.35 weeks in a month.
This is your ‘usual pay’.

If you worked for 3 days of a five day week, that was 60% of the week. To get a full week (100%):
    1
    They would divide your earnings for those three days (60% of the week) by 60
    =
    the answer would be your earnings for 1% of the week
    2
    Then they would times the answer (1%) by 100 to get 100%
    =
    the answer would be your pro rata earnings for the whole week
    3
    Then they would multiply your pro rata earnings for the week by 4.35, because there are 4.35 weeks in a month.
    =
    the answer would be your pro rata earnings for the month
This is your ‘usual pay’.

Flexible furlough

Your employer will need to work out your usual hours and record the number of hours you work each week. Your furlough hours for each week are your usual hours minus the hours you worked that week.

To work out your usual hours for flexible furlough, if you work a fixed number of hours every week:
Your employer will need to work out:
    1
    When does your pay period end: What day of the week or month is the last day included in your pay check?
    2
    When did your last pay period, that ended on or before the 19th of March 2020, end?
    3
    What hours where you contracted to work at that time?
    4
    Divide those contracted hours by the number of days in your pay period. (including non-working days)
    =
    This number is your average hours per day
    5
    Round up or down, if the answer isn’t a whole number
If you took any annual leave, sick leave or statutory family related leave, your usual hours should be calculated as if you were not on leave, but worked your contracted hours instead.

To work out your usual hours for flexible furlough, if you are not contracted to a fixed number of hours,
Or; If your pay depends on the number of hours you work:
Your employer will need to work out:
    1
    The average number of hours you worked over the last tax year (from the 6th of April 2019 to the 5th of April 2020)
    2
    The hours you worked, over the corresponding period from the last tax year (from the 6th of April 2019 to the 5th of April 2020)

Your usual hours are based on the highest of these two options.

When your employer is calculating your usual hours they must include
  • Any hours of leave you took where you were paid your full contracted rate, such as holiday leave.
  • Hours worked ‘overtime’ as long as your overtime pay was non-discretionary (as long as your overtime pay is agreed on in your contract)

I have a flexible work arrangement (flexi-leave):
If you took paid leave, which you accrued by working extra hours, your employer should count this paid leave as hours worked.

If you worked, but weren’t paid, because you accrued paid leave to take at a later date instead, your employer should not count these worked hours as hours worked.

To work out your usual hours by average your employer should:
    1
    Look at the last tax year (from the 6th of April 2019 to the 5th of April 2020) up until you were furloughed
    2
    add up the number of hours you worked, the number of hours you were on paid annual leave and the number of hours you were on flexi leave
    3
    Add up all of the days in the last tax year (from the 6th of April 2019 to the 5th of April 2020) up until you were furloughed

    They shouldn’t count:
    • The time before your employment started, if your employment began during the last tax year
    • Any days you were on statutory sick leave
    • Or; family related statutory leave
    • Or; reduced rate paid leave following either of the above

    4
    Divide all the hours from step 2 by the number of days from step 3
    =
    This number is your average daily hours
    5
    Multiply your average daily hours by the number of days in the pay period that they are claiming for
    6
    Round up or down if the answer isn’t a whole number
To work out your usual hours for each pay period based on the corresponding period from the last tax year your employer should:
    1
    Identify the pay period or periods in the 2019-2020 tax year that correspond to at least one day in the pay period that you are claiming for. (Or partial pay period.)
(your pay period is the time, start to finish, that you get paid for per payday, for example: one week: Sunday to Saturday; or one fortnight, Monday to Sunday; or one month, the 1st to the end of the month.)

If your pay period starts and ends on the same dates as last year (so all of the dates in this pay period match the dates in the corresponding pay period from last year (the tax year 2019-2020) your employer can use the actual hours that you worked in the same pay period last year.

If your pay period doesn’t start and end on the same dates as last year your employer should:
    2
    Count the hours worked in the first pay period identified from last year (tax year 2019-2020)
    3
    Multiply those hours by the number of days (including those not worked) in that pay period which correspond to at least one day (including those not worked) in the pay period that they are claiming for. (or partial pay period)
    4
    Divide that number by the total number of days (including those not worked) in the pay period from last year.
    5
    Repeat steps 1-3 for each pay period that they are claiming for.
    6
    Add up all the hours from all the pay periods they are claiming for (round up or down if the result is not a whole number.)
See an example at gov.uk

Holiday pay and Furlough

  • You continue to accrue statutory holiday entitlement while you are on government furlough.
  • You can take your annual holiday leave while you are on government furlough.
  • If you are flexibly furloughed, any holiday hours that you take during the claim period should be counted as furloughed hours, rather than working hours.
  • Your employer should not put you on furlough for a period that you are actually just on holiday.
  • Even during a furlough period, your holiday leave should be calculated at your normal rate of pay, before the coronavirus pandemic.
  • Learn more about calculating your holiday leave
  • The government contribution to your furlough pay will continue through your holiday at 70% of your usual earnings (up to £2187.50 per month.) Your employer will be responsible for topping this up to the full holiday pay that you are entitled to (100% of your usual earnings, the £2500 cap does not apply to your holiday leave)
  • You have to request holiday leave as usual, and your employer can refuse it based on the needs of the business, as long as you have the opportunity to take it at another time in the year, or carry it over.
  • Can I carry over leave due to coronavirus?

Bank holidays and furlough

Bank holidays should be taken as furlough, or as holiday, depending on whether you would normally work on bank holidays. If you normally take bank holidays as holiday your employer must either:

  • Top up the government contribution to your furlough pay, to meet your statutory holiday pay entitlement
  • Or; give you a day of holiday in lieu.

Training on furlough

You are allowed to take part in training whilst receiving on government furlough.

The time you spend training, while under furlough, is classed as working time.

By employment law you must receive National Living Wage, National Minimum Wage or Apprentice’s Minimum Wage for working time including all of the hours that you spend training.

Your employer is responsible for making sure that all the wages and furlough payments that you are paid meet the appropriate minimum wage requirements for working time, including time spent training. This will depend on your usual wage and on how much of your usual hours is spent training vs how much is spent on furlough.

If the pay you receive is less than the appropriate minimum wage, your employer will have to top up your pay to make sure that you receive the appropriate minimum wage for working time including all of the time spent training while on furlough.

Frequently Asked Questions
If you are a salaried employee your employer should calculate your furlough pay from your salary, before tax deductions, not from the pay you received whilst on leave.

If your pay varies, your employer should calculate your furlough pay based on the higher of:
    1
    the same month’s wages from the previous year
    2
    your average monthly wages from the tax year 2019/2020

The higher of these is your usual pay.
If you are a salaried employee your employer should calculate your furlough pay from your salary, before tax deductions, not from the pay you received whilst on leave.

If your pay varies, your employer should calculate your furlough pay based on the higher of:
    1
    the same month’s wages from the previous year
    2
    your average monthly wages from the tax year 2019/2020

The higher of these is your usual pay.

Have you been getting enough furlough pay?

Not all employers pay the correct amount so if you feel that yours has been mis-calculated, whether on purpose or not, you can get in contact with us and see how we can help.

Employment Law Specialist | Competitive Quotes | Straight Talking Legal Support


This content is provided free of charge for information purposes only. It does not constitute legal advice and should not be relied on as such. No responsibility for the accuracy and/or correctness of the information and commentary set out in the article, or for any consequences of relying on it, is assumed or accepted by any member of our company. For employment law advice please get in contact and speak to your employment law solicitors.
 
Find Out More:

Talk to a Professional

If you're not getting the right Furlough Pay, we can help.


Just get in touch today to speak to one of our employment law specialists

 
 
Agree to Terms | Privacy Policy
We reply to all messages within 1 working day and will help wherever we can!
Employment Law Friend Privacy Promise
Employment Law Friend Privacy Promise

We promise not to share any of the information you provide to your employer.
What you tell us, stays between us.
We're loyal like that.

No Win No Fee Employment Solicitors from Employment Law Friend

Click for more information. Terms apply.