Flexible Furlough Pay
As part of the Coronavirus Job Retention Scheme from 1st July 2020 workers can return to work on reduced hours whilst remaining furloughed. Where the flexible options is used and an employee is returning to work on reduced hours you must know the hours usually worked as well as the hours worked this period. This is not so straightforward, but HMRC have been quite specific with how they want this calculated for furloughed workers.
Usual hours worked / the period over which those hours are worked = average per day
Average per day x number of hours in the pay period = the total usual hours worked
If the total usual hours worked is not a whole number then round up.
Eg Monthly paid worker on 37 hours per week in July
37 / 7 = 5.29
5.29 x 31 = 163.99
164 hours usually worked in July
(this is not the equation we would typically use to work out average monthly hours!)
It is more complex where an employee works variable hours but still possible if you have the information to hand. The first part of the equation could be total hours / 300 days for instance.
You can deduct the number of hours worked in the pay period from the usual hours to give the furlough hours that can be claimed.
The amount that can be claimed is the usual process of calculating the 80% grant amount and applying caps as necessary.
Grant amount x (furlough hours / normal hours) = the furlough grant to claim
It looks like hours should always be used and not days, there is no guidance for how to calculate flexible furlough payments using day rates. Again records should be kept.
HMRC have a few examples with the flexible calculation available here.