How will my pay be calculated by the Coronavirus Job Retention Scheme?

Last updated: 25 Nov 2020

While on furlough, your pay will be calculated differently, depending on whether your pay is fixed or your pay varies from month to month.

If your pay is fixed

Your pay will be determined as 80% of your regular gross pay (i.e. your pay before tax), for the time you are furloughed, up to a maximum of £2,500 per month.  Your employer can choose to top this up, but they don’t have to.

Any regular payments your employer is ‘obliged’ to make to you should be included. This would include past overtime, fees and compulsory commission.

Any discretionary payments (such as a discretionary bonus) are excluded. Also excluded from the scheme payments are any non-monetary benefits (including taxable benefits in kind) and also benefits paid through salary sacrifice (including pension contributions).

If your employer asks you to do any training while furloughed – this counts as time spent working and your employer must pay you at least the minimum wage for any time you spend training, even if that means they have to top-up payments from the Job Retention Scheme.

The reference period for determining what your regular pay is will depend on when you started working for your employer. If you were on your employer’s payroll on 19 March 2020 (and were included in an electronic payroll submission to HMRC) then the reference period is the last pay period on or before 19 March 2020.

If you started after 19 March 2020, then the reference period is the last pay period on or before 30 October 2020.

If your pay varies from month to month

If your pay varies from month to month, then your ‘regular’ pay for the purposes of the CJRS will be calculated slightly differently depending on when you started work with your employer.

If you were on payroll and included in a RTI submission to HMRC on or before 19 March 2020, then your regular monthly pay will be calculated as the higher of:

  • the monthly pay you received in the same calendar month last year; or
  • the average monthly pay you received during the 2019/2020 financial year.

If you started work during the 2019/2020 financial year, it will be the average you earned each month during that year after you were hired.

If you started working for your employer after 19 March 2020, then as long as you were included in an RTI payroll submission on or before 30 October 2020 you are eligible under the scheme extension.

Your regular pay will be calculated as the average monthly pay you earned since the start of your employment or 6 April 2020 (whichever is later) and the day before their CJRS extension furlough periods begins.

Get help

If you have any concerns about how your pay is being calculated or any further questions about this issue contact us for more help.