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Hi folks
Bit of a big ask but is there anyone here who maybe does payroll or knows anything about pay/furlough?
I work for a small company. Last month I was put on two days 'flexible furlough' as we were quiet. In my pay I was deducted a much larger amount of pay than I believe to be correct.
I am salaried. Have been on the same salary for a few years. As far as I'm aware it should be fairly straight forward to calculate what my pay would roughly be if I am furloughed. I would expect to earn 20% less than what I've calculated my daily wage to be from my salary for those two days. But my loss in gross salary was double what my daily rate was. I've brought it up with the lady who sends out the payslips. I've shown a rough working out of what I expected but this has been responded to with something about February being only 20 working days in a 28 day month instead of January where it's 21 working days in 31 days of the month. As far as they are concerned it's case closed.
Makess no sense and I can't quite understand how two days furlough can equal such a drop in pay.
It would be great if someone on here could check it over for me. Just roughly based on my gross figures from last month's pay slip.
Thanks
Pete
my son had something similar on his pay, cant remember the details but it was the February 28 days thing.
Salary / 52 / 5 -> Daily Rate.
Having said that if I'm doing any kind of training I get furloughed for it and I have no idea how they work out the pay cut, which also seems to me to be a lot more than my daily rate.
They should really be using 'working days', and working on an average of 21 per month.
So 2 days at 80% and 19 days at 100% should equate to you losing 0.4 days ie gross at 98.1% of a normal month.
If she's used 2 days from 28 days then it'll be even less you've lost - or was it a totally different number. How much gross did you lose?
it would make a bit of a difference - but not huge, tiny in fact - but the other way... Working gross - if you received £3k pcm, then being furloghed for 2 days in that 20 working day month, you should get £2940 gross. if it were a 21 working day month, you should get about £2930 gross with 2 x furloughed days.
That said, i've not had to process payroll with furlough as we've been lucky enough to be working fully through lockdowns - though from what i read in prep for what could happen, this is how it looked like it should work out.
Salary / 52 (weeks) / 5 working days = daily rate is how I figured it.
So if I've been furloughed for two days in Feb I'd expect a reduction in gross salary of approx 2 days at 0.2 of my daily rate.
But the reduction is slightly more than double my actual daily rate.
Surely the 28 days in the month thing is by the by. My salary is the same each month. Regardless of days in the month. Does it mean my daily rate is higher during Feb and in this case, much, much higher?
You've lost nearly 4% of your gross?
Hi Peter,
I'm in the midst of absence accrual reports, as soon as I have completed these I'll give you a rundown of how I calculate employees' furlough pay.
I'll be a couple of hours or so, but I'll check in later.
You’ve lost nearly 4% of your gross?
Ive lost around 9.5% of my monthly gross
PJM1974
Free Member
Hi Peter,I’m in the midst of absence accrual reports, as soon as I have completed these I’ll give you a rundown of how I calculate employees’ furlough pay.
I’ll be a couple of hours or so, but I’ll check in later
That would be really helpful. Thank you.
Just a thought, are you over the £2,500 a month maximum? furlough payment?
If you earn over this limit your furlough days will be paid at the reduced rate.
For example, if your usual pay is £3,500 a month your typical daily rate would be £166.66 (£3,500/21) a month with furlough it would be £119.05 (£2,500/21).
So £166.66 x 19 and £119.05 x 2 = £3,404.64 nearly £30 down on the 2 days at 80% you might have expected, the higher the your usual pay is the more this gap grows.
We've had similar.
For most places this isnt correct:
Salary / 52 (weeks) / 5 working days = daily rate is how I figured it.
assuming you get the same pay every month (which is normal), then your feburary daily rate is salary/12/20 working days.
Wheras July 2020 had 23 working days so your "day rate is salary/12/23 working days, some 15% lower.
(july being the most recent 31 day month with no bank holidays and only 4 weekends, depending on how you "score bank holidays may mean this happened in december too.)
Hi Peter,
Accruals done, let's walk through the furlough calcs from my perspective.
The important thing is to break it down into logical steps, so I'm going to take the example of one of my salaried employees who works a five day week at a salary of £28K
Annual Salary: £28,000
Monthly Salary: £28,000 / 12 = £2,333.33
Annual Working Days: 52 x 5 = 260
Monthly Working Days: = 260 / 12 = 21.67
Daily Rate: £28,000 / 260 = £107.69
So, let's assume that they had five flexible furlough days out of 21 working days:
Furlough Pay: 5 x £107.69 x 80% = £430.76
So it would be £2,333.33 -(5 x 107.69) + £430.76 = £2,225.63
Things might get a little complicated if they're working it out according to calendar days in the month, in which case your notional daily rate would differ from month to month; i.e. January £2,333.33 / 21 = £111.11 per day and February £2,333.33 / 20 = 116.67 per day but you have to establish the starting point and work from there, hence my calculation above.
Just a thought, are you over the £2,500 a month maximum? furlough payment?
There is an upper limit on furlough pay of £2,500 which equates to £37,500 per annum at full pay.
At my company we work slightly differently in that we calculate everyone's salary according to annualised worked hours, but the starting point is always the same e.g. 8 hours per day x 260 days / 12 months = 173.33 hours per month, or 7.5 hours per day x 60 days / 12 months = 162.5 hours per month etc.
The starting point is always the same though - treat every month as Contractual Working Hours minus Furlough Hours regardless of actual calendar working days in the month.
This is really helpful PJM1974 and although there is a difference between working it out on calendar days rather than working days there isn't a huge difference.
I'm gonna drop you a pm with my figure on it so you can just broadly see what I mean.