1. Furlough - How to Administrate the Payment?

We would recommend you follow the steps below to administer Furlough pay.

Step 1: Click on Employer/SetUp.

Step 2: Click on Chart of SetUp.

Step 3: Click on Payment Setup.

Step 4: Create a new Payment Item called "Furlough Pay", subject to Tax, Pension and NIC, to facilitate reporting for claim purposes under Coronavirus Job Retention Scheme (CJRS) at a later date.

Step 5: Click on "Save" to save the new Furlough payment item.

Step 6: Use a calculator to calculate the Furlough amount i.e. Normal Pay x 0.8.

Step 7: Call HMRC if you are not sure what should be classed as 'Normal Pay'.

Step 8: Go to Payrun, Process Pay, and select the appropriate Pay Frequency. Click on Other Payments.

Step 9: In the Other Pay Items section, click on the drop down and select the newly created Furlough Pay item.

Step 10: Enter the Calculated Furlough Pay amount, click on Save, and then process the pay as usual.

Step 11: E-file the FPS as usual.

Important:
Please do not call the payroll software provider to ask what 'Normal Pay' amount should be used as the base pay for calculating the Furlough pay. Each company has their own unique circumstance and it is only the company itself and HMRC who can answer that question.

2. How to Claim Back Furlough Payments from HMRC?

Step 1: Click on Reports

Step 2: Select Costing & Accounting Reports - View / Print and click any report under Cost to Employer Report category, since there are many variants.

Step 3: Take note of the amount you as an employer has paid out i.e. the Furlough Pay plus employer NIC, and Pension.

Step 4: Click on HMRC's Guidance to ensure your claim is compliant within the Coronavirus Job Retention Scheme. Clear guidance is given on how to claim back wages of furloughed employees.

Step 5: Wait for HMRC to further announce how and by what channel you can claim back the Furlough pay.

3. Other FAQ's related to Claiming Furlough Pay / Coronavirus Job Retention Scheme (CJRS)

3.1. How to Calculate and Claim Back Covid-19 Self Isolation SSP Payment?
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3.2. How to Calculate and Claim Back Furlough Pay ?
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3.3. If I pay Furlough to my employees, is the amount subject to tax, National Insurance and Auto Enrolment Pension Contributions?
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3.4. If I pay Furlough to my employees, can I claim back the Employer National Insurance contributions and the employer Auto Enrolment Pension Contributions?
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