Calculate pay for furloughed workers

The process for calculating pay for furloughed employees depends on if their pay varies or doesn't vary due to work performed. Read more >

What to include when calculating wages

The pay elements that you should use when running the assessment are regular payments that you're obliged to make, including:

• regular wages you pay to your employees.
• non-discretionary overtime.
• non-discretionary fees.
• non-discretionary commission payments.
• piece rate payments.

You can't include the following:

• payments made at the discretion of the employer or client. Where the employer was under no contractual obligation to pay, including:
  • tips.
  • discretionary bonuses.
  • discretionary commission payments.
• non-cash payments.
• non-monetary benefits like benefits in kind, for example company cars, and salary sacrifice schemes, including pension contributions, that reduce an employee's taxable pay.

Select the payments to assess

Before you select which payments to assess, you need to have selected the dates and employees that you need to furlough.

A full list of the payments you've setup in Sage 50 Payroll appears. You need to select the relevant payments for the Job Retention Scheme calculations. You should only include payments for normal pay and need to exclude items such as bonuses, expenses and tips. 

If you're unsure what to select, you can check which pay elements were active on the employees' payslips and the Payment Type History report. To run the Payment Type History report, from the Employee List, select the relevant employees then click Reports then click Employee then preview the Payment Type History report.

To include the pay elements, they should all be subject to PAYE and National Insurance. You can check this in your pay elements settings from the Company Tasks menu.

1. Click Company then click Job Retention Scheme.
2. Next to Step three, Select the payments to assess, click Do it now.
3. Select the required payments that are included in your employees salary.

   By default, the Salary pay element and Cost of Net Payments are selected. You need to select any other payments that you want to include in the assessment.

4. Click Save.
5. You can now select which deductions to assess.

Select the deductions to assess

Before you select which deductions to assess, you need to have selected the dates and employees that you need to furlough that you'd like to furlough and followed the steps in the Select the payments to assess section.

A full list of the deductions you've setup in Sage 50 Payroll appears. You need to select the relevant payments for the Job Retention Scheme calculations.

If the deduction is used to reduce the employee's taxable gross pay then it needs to be included in the calculation. For example, a salary sacrifice deduction is taken from the gross pay prior to calculation tax and NI. Union fees, loans or advances wouldn't be included as they're not affecting gross pay.  

If you're unsure, you can check the deduction settings from the Company Tasks menu. If it's flagged as either Salary Sacrifice or has the PAYE and NIC boxes selected then it should be included.  

1. Click Company then click Job Retention Scheme.
2. Next to Step four, Select the deductions to assess, click Do it now.
3. Select the required deductions that are included in your employees salary.
4. Click Save.
5. You can now assess what you can claim.

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