One particular area of challenge for employers has been how to calculate furlough pay for employees who come off furlough part way through a claim period - for example where the employee's pay period is a calendar month and they return mid-way through a particular month, rather than at the end of the month. In these circumstances, the claim period may extend beyond the end of the individual employee's furlough leave, for example where the employer is claiming for multiple furloughed employees.
HMRC has updated its guidance, setting out a calculation methodology which should be used from 14 September 2020. Employers do not need to amend claims submitted prior to this date.
The methodology essentially allows employers to calculate 80% of the proportion of the employee's wage payable up to the last day of furlough, in order to calculate the amount due to the employee.
The new methodology requires employers to:
For a worked example of how to carry out the calculation in practice, see paragraph 3.3 of this guidance.