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Flexible furlough and applying it to payroll

Flexible furlough, payroll and making a claim

After the initial rush of firms trying to understand how the Coronavirus Job Retention Scheme worked and the amounts that could be claimed, the next challenge was applying it to payroll. 

The original scheme already presented a number of challenges: understanding the legal position, making sure what you’d agreed with each individual had been accurately translated to payroll and those making furlough claims – particularly if individuals had spent part of a payroll period on furlough or if you were going to top-up beyond the Government contribution. Not to forget the further complications of taking holiday and those on variable pay.

Our advice in mid-March was to prepare for payroll early. Spreadsheets across the country were no doubt being built, checked, double checked and triple checked – and had many scratching their heads. Including us, if we’re honest.

Start your payroll early this month

With flexible furlough starting this month (from 1 July), it has become even trickier to calculate the furlough claim and to get it right. So again, we say get the spreadsheets out and prepare for payroll early this month.

Start communicating with those responsible for managing furlough and those responsible for payroll and furlough claims, to make sure they have all the information they need well in advance.

For our guidance on the rules for the new flexible furlough scheme, click here.

Our top 5 tips

What to look out for – both for the old scheme and the new one:

The government has also launched a new calculator which can help you calculate your claim, including flexible furloughing up until 31 August.

Above all else – keep clear, understandable records of all of the detail of how you have calculated pay and relevant furlough claims. And good luck.