How do I calculate furlough pay for March and April?

01.03.2021
Dominic Smith
COVID-19

Dom discusses furlough calculations for the following months.

For employees whose pay varies (ie, anyone who is not on a fixed salary), the calculation for their furlough pay has always been based off of the following options:

1.  If they were first furloughed at some point between March 2020 and October 2020, then it would be the higher of:

    a) Their average earnings in the 19/20 tax year
    b) Their earnings in the equivalent prior year period

2.  Employees who were furloughed for the first time from the 1st November 2020 onwards have their calculations are based off of their average earnings between the earlier of:

    a)      6th April 2020
    b)     Their employment start date

And their first day of furlough.

For employees falling under scenario (1), this means for example that when calculating February 21 payroll figures, you would have used February 20 as a comparative to help with your furlough calculations.

But as we move into March and April, a new question arises: These months were furlough months in 2020, so do we still use them to complete our furlough calculations?

Sensibly, the answer to this is no. The comparator you will use for March and April 2021 will in fact be March and April 2019, not 2020.

Likewise, the exactly the same applies when calculating an employee’s ‘usual hours’.

If your employee did not work for you in March or April 2019, then you can only use the 19/20 averaging method to calculate the furlough pay and usual hours.

Claim MonthLookback Period
November 2020November 2019
December 2020December 2019
January 2021January 2020
February 2021February 2020
March 2021March 2019
April 2021April 2019

This obviously has no effect on scenario (2) above, nor does it affect employees with fixed salaries. Their reference pay for furlough continues to be their last pay period on or before 19th March 2020, or if they were not furloughed until November onwards, their last pay period on or before 30th October 2020.

Remember, no matter what the situation, furlough calculations only ever look back at past amounts prior to a person being furloughed, so changes to pay rates do not effect furlough claims.

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