The Coronavirus Job Retention Scheme has had some significant changes in the way you qualify for and calculate furlough pay. This change is in effect from the 1st of July 2020 and this new scheme is called Flexible Furlough. The purpose behind these changes are to help get people back to work even if there aren’t their normal level of hours available.

If we prepare your payroll for you then you needn’t worry, we will make all the calculations and claims for you. If you prepare your payroll yourself there are a few key changes that you need to be aware of:

  1.  Employees no longer need to be furloughed for a continuous 3 weeks. There is actually no limit needed
  2.  Where employees work, but the hours available aren’t as high as they would have been, HMRC will fund 80% of the shortfall
  3.  The government are still funding employers national insurance and employers pension costs on the furlough pay. In August they will cease to do so
  4.  Where employees have contracted hours, there is a specific formula provided by HMRC that needs to be used to calculate the amount the government will fund.
  5.  Claims for furlough days in June and July need to be submitted separately. For example if you pay weekly and the period you are claiming for is the week ending the 5th of July, you will have to claim for the Monday and Tuesday’s furlough in one claim under June and the remaining days in a separate claim under July’s claim.
  6.  For employees that have variable pay, you still work need to work out their maximum qualifying hours. This is still the higher of the average for the year or corresponding period last year. However previously it was based on gross pay whereas now you need to look at hours worked. This is needed to calculate the shortfall.
    1.  An example might be where an employee’s maximum hours are 40 and they worked 10 hours. If this were the case you would pay them for 10 hours as normal and then they would also be entitled to 24 hours furlough pay that the government would fund. This is the shortfall (40 hours less the 10 they worked) multiplied by 80%
  7.  Claims can now be made for a minimum 7 day period. This means if you run a weekly payroll, you can claim for each week as soon as you have the figures.
    1.  The only exception being that those 7 days need to all be in July. If 2 days of your week fall in June, you cannot claim for the remaining 5 days in July until you have

We have created a spreadsheet that will help you work the furlough entitlement out for staff where they have contracted hours.

If you have any questions or need any assistance with the above, or if you would like a copy of excel spreadsheet to help calculate the entitlement for contracted staff, please get in touch with Michael ( or 01392 360 008)