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:
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 Month||Lookback Period|
|November 2020||November 2019|
|December 2020||December 2019|
|January 2021||January 2020|
|February 2021||February 2020|
|March 2021||March 2019|
|April 2021||April 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
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.