The Government's Coronavirus Job Retention Scheme has less than two months left to run, but continues to attract lots of attention around administration and ensuring claims are processed correctly.

One particular area of challenge for employers has been how to calculate furlough pay for employees who come off furlough part way through a claim period - for example where the employee's pay period is a calendar month and they return mid-way through a particular month, rather than at the end of the month. In these circumstances, the claim period may extend beyond the end of the individual employee's furlough leave, for example where the employer is claiming for multiple furloughed employees.

HMRC has updated its guidance, setting out a calculation methodology which should be used from September 14, 2020. Employers do not need to amend claims submitted prior to this date.

The methodology essentially allows employers to calculate 80 per cent of the proportion of the employee's wage payable up to the last day of furlough, in order to calculate the amount due to the employee.

The new methodology requires employers to:

• only calculate the employee's usual hours up to the last day of furlough, instead of to the end of the claim period

• exclude any working hours after the last day of furlough

For a worked example of how to carry out the calculation in practice, see paragraph 3.3 of this guidance.

Further guidance for employers can also be found in VWV's Coronavirus Resource Library.

  • Michael Delaney is a partner at award-winning law firm VWV, which has offices in Clarendon Road, Watford. Get in touch on 07909 912 564 or