Just to be clear-
1 – The grant you will claim will comprise of three parts –
- 80% of appropriate GROSS pay
- Employers National Insurance on furloughed pay
- Auto enrolment pension contributions on furloughed pay
2 – The furloughed pay is subject to PAYE and NIC, like normal pay and you will pay your furloughed staff their NET pay from their payslips, as usual.
3 – So, you will receive more than you actually pay your staff. The balance will cover the monthly PAYE & NIC when due, plus the monthly pension contribution due to the appropriate fund.
4 – If you do not have the funds to pay your staff their net furloughed pay, you run the payroll and send them their payslips at the normal time and pay them when the grant comes through. Grants will arrive in your designated bank account 6 days after you have made the claim. Claims may be made shortly in advance of the pay being due. We take it that making a claim 6 days or so before your staff’s pay is due is acceptable. The minimum period you can claim for is 3 weeks, so there would be some delay in receiving funds for the weekly paid.
5 – If you choose to make up the difference and pay your staff 100% of normal pay, while furloughed, the above position is the same. It is just that you will get back 80% of everything via the government grant.
6 – You must, as a minimum, pay your furloughed staff the net pay equivalent of the 80% you get from the government.
7 – You cannot claim the Employers NIC element in the grant, if you have no such actual NIC to pay, for example because it is covered by the annual employment allowance.
21 APRIL 2020