How the scheme works

If you're an employer, who can't cover staff costs due to Coronavirus and as such have asked your employees to stop working, but haven't made them redundant, then you can apply to HMRC to help pay their salaries.

What are furloughed employees?

Furlough leave is leave offered to employees which keeps them on the payroll without them working. As the furloughed employees are kept on the payroll, this is different to being laid off without pay or being made redundant.

Employees who get furloughed must not work during the period of furlough but usually will return to their job afterwards unless redundancies follow.

Furloughed employees is the classification for the employees that you are keeping on your payroll, rather than laying them off.

NOTE: To be eligible for claims from May 2021, an employee must have been included on an RTI submission on or before 2 March 2021. 

How do I process furlough payments?

To process a furlough payment, we recommend that you create a new furlough payment. 

If you're going to top-up the employee's payment, you can pay the relevant amount using the employee's existing payment. Any top up payments to the Job Retention scheme are not reclaimable.

Set up a furlough pay element

1. Click Company, then click Pay Elements.
2. Click the Payments tab, then click New.
3. In the Status drop-down list, select Variable.
4. In Description, enter Furlough.
5. In the This payment is subject to section, select the PAYE and National Insurance check boxes. and others as applicable.
6. Select all other applicable check boxes then click OK.

Add the pay element to an employee record

1. Double-click the relevant employee, then click the Employment tab.
2. Click Pay Elements, then click the Payments tab.
3. On the drop-down list, click the Furlough payment and click OK.
4. Click Save, then click Close.

You can now record the amount in the payments tab within Enter Payments.

Add the pay element to multiple employees

1. On the Employee List, click the relevant employees.
2. On the menu bar, click Tasks then click Global Changes.
3. Click Payments, then Add Payment.
4. Select the Furlough payment, then click OK.
5. Click Yes, then click OK.

You can now record the amount in the payments tab within Enter Payments.

Optional: If you want to top-up the pay you can do this by processing any extra top-up payment on the employee's normal payment. For example, if you normally use a payment called Basic Pay, you can process 20 on Basic pay and 80 on the Furlough payment. You do not have to top-up your employees' pay. Any top-up payment is not reclaimable from HMRC.

Keep track of your furloughed payments

To keep track of how much furloughed payments that you've paid to your employees, you can run the payment type history report.

1. On the employee list, select the required employees.
2. Click Reports then click Employee.
3. Click Payment Type History Detailed then click Preview.
4. In the Criteria Values, enter the required Processing Date.
5. Click OK the print or export the report.

The Job Retention Scheme Module

The new Job Retention Scheme Module is available now. It takes you through the full process of manually assessing and notifying your employees and producing the file in the correct format to submit the information of your claim to HMRC. 

You can use the Job Retention Scheme Module to:

• Select the dates and employees you need to furlough.
• Select the pay elements to assess.
• Assess what you can claim.
• Send notification letters to your employees.
• Export the file in the correct format to submit your claim to HMRC.

To make sure that the update is installed check our installation guide.

NOTE: If you're creating the file to submit to HMRC manually, the file needs to be submitted to HMRC with only one sheet in the workbook. By default, Microsoft Excel defaults to three sheets in a workbook. You need to delete the extra two sheets before you attempt to submit your claim.

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