How To Calculate Your Employees Part-Time Pay Whilst Furloughed

As many of you will  be aware from our previous articles, from the 1st July you can have your employees return on a part time basis and the remainder of the employees hours will be paid through the job retention scheme. The government will continue to pay employer National Insurance Contributions (ER NICS) and pension contributions for the hours the employee is on furlough. For an employee to qualify for this the employer should have had the employee furloughed for at least 3 weeks prior to the 30th June, this means that the latest you could furlough an employees was the 10th June.

 

So, how will it be calculated?

If an employee is normally works 40 hours a week and you are going to have them come back for 10 hours a week, under the new flexible furlough arrangement you will have a signed agreement stating that the employee agrees to working the 10 hours but is furloughed for the remainder of their 30 hours.

 

The employer will pay then have to pay the employee for the 10 hours worked in full and the remainder of the 30 hours will be paid through the job retention scheme, which would be 80% of their normal pay for those 30 hours remaining.

 

Anyone on any type of employment contract can be furloughed including full time, part time, agency, flexible or zero hour contracts.

 

From 1st August 2020, the level of grant will gradually be reduced each month.To be eligible for the grant employers must pay furloughed employees 80% of their wages, up to a cap of £2,500 per month for the time they are being furloughed. As an employer, you can choose to top up employee wages above the 80% total and £2,500 cap for the hours not worked at your own expense if you wish. It is now for the employers to go back to paying the employees national insurance contributions and pension contributions.

 

Wage caps are proportional to the hours an employee is furloughed. For example, an employee is entitled to 60% of the £2,500 cap if they are placed on furlough for 60% of their usual hours.

 

For September, the government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee is on furlough. Employers will pay ER NICs and pension contributions and top up employees’ wages to ensure they receive 80% of their wages up to a cap of £2,500, for time they are furloughed.

 

For October, the government will pay 60% of wages up to a cap of £1,875 for the hours the employee is on furlough. Employers will pay ER NICs and pension contributions and top up employees’ wages to ensure they receive 80% of their wages up to a cap of £2,500, for time they are furloughed

 

If you need any help with calculating your costs as a business for bringing a furloughed employee back to work part time, please contact our payroll team for assistance. We are able to calculate this for you on a case by case basis.

Contact us today on 02085300720 or email businessdevelopment@nordens.co.uk

 
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