Help with the sums...

clb516

Hi,
I have been on furlough since Easter Monday and just received my wage slip for June. My normal salary is £40k pa so furlough pay is capped at £2,500 which is fine. However, this month we had to take 5 days holiday which as I understand it have to be made up of furlough pay, plus the difference from the company to equal what I would usually get for 5 days holiday pay. I work 40 hours over 5 days and receive £769.23 per week. My wage slip says £2,500 furlough pay plus 5 x £27.78 furlough holiday pay = £138.90 which seems low to me. The difference between a normal months gross pay and furlough is £833 so as a rough guide I was expecting closer to £200 difference made up by the company for the weeks holiday?? I've tried to find a calculator or explanation online how to work this out, but I'm struggling. Does anyone know what the figures should be before I raise this with payroll.

Thanks,
Chris.

Grumpy_chap

That is hard to read as set out, but I think you are saying:
22 working days in June.
5 days (1 week) annual leave, this will be at the normal weekly rate £769.23
22 - 5 = 17 days furlough.  17 / 22 x £2,500 = £1,931.81
Total = £1,931.81 + £769.23 = £2,701.04
They have paid you £2,500 + £138.90 = £2,638.90
So, that seems to be a discrepancy of £62.14

If the pay period is on whole weeks, then the calculation would change to:
20 working days in
5 days (1 week) annual leave, this will be at the normal weekly rate £769.23
20 - 5 = 15 days furlough.  15 / 20 x £2,500 = £1,875
Total = £1,875 + £769.23 = £2,644.23
They have paid you £2,500 + £138.90 = £2,638.90
So, that seems to be a discrepancy of 5.33

There are always different ways to calculate these things and factors such as pension deductions can make small variations as well.

The best thing, rather than making any accusations, would be to simply ask the payroll department to provide their full calculation as you don't understand how it has been done.

clb516

@Grumpy_chap thanks for the reply. The first calculation is definitely where I thought it should be. Whenever I'm paid something like a days company sick pay or unused holiday at the end of the year, it's always calculated at salary/52/5 and they pay £153.85 per day. I couldn't figure out why this wasn't done the same. I know they doing something different when I was first furloughed to work out a part month and that was to divide furlough pay by 30/31 days, which I didn't think was right because I don't work 7 days a week. Dividing it by the number of working days makes much more sense to me...I have now sent them an email asking for a breakdown of the calculations as per your advice. 

Grumpy_chap

The calculation of a day's pay salary/52/5
Seems reasonable.

No reason the basis would change now.

Jeremy535897

The guidance sets it out as follows:

"To work out 80% of the average monthly wages for tax year 2019 to 2020:

1. Start with the amount they earned in the tax year up to the day before they were furloughed.

2. Divide it by the number of days from the start of the tax year – including non-working days (up to the day before they were furloughed, or 5 April 2020 – whichever is earlier).

3. Multiply by the number of furlough days in this pay period.

4. Multiply by 80%.

Find an example of working out 80% of average monthly wages for the last tax year."

Adjust the holiday week to 100% if that is how they are doing it.

unholyangel

Grumpy_chap said:

That is hard to read as set out, but I think you are saying:
22 working days in June.
5 days (1 week) annual leave, this will be at the normal weekly rate £769.23
22 - 5 = 17 days furlough.  17 / 22 x £2,500 = £1,931.81
Total = £1,931.81 + £769.23 = £2,701.04
They have paid you £2,500 + £138.90 = £2,638.90
So, that seems to be a discrepancy of £62.14

If the pay period is on whole weeks, then the calculation would change to:
20 working days in
5 days (1 week) annual leave, this will be at the normal weekly rate £769.23
20 - 5 = 15 days furlough.  15 / 20 x £2,500 = £1,875
Total = £1,875 + £769.23 = £2,644.23
They have paid you £2,500 + £138.90 = £2,638.90
So, that seems to be a discrepancy of 5.33

There are always different ways to calculate these things and factors such as pension deductions can make small variations as well.

The best thing, rather than making any accusations, would be to simply ask the payroll department to provide their full calculation as you don't understand how it has been done.

Furlough is calculated on calendar days, not working days. 

I have no idea what they've done when calculating - it's definitely wrong. I can get the same answer they did, but only by using the wrong calculation of daily furlough amount / 0.8 (to gross up) * 0.2 (for the top up). But that is wrong because its calculating it over calendar days while annual leave would be on working days (technically it's not time you're entitled to but a weeks wage, but a weeks wage is over working days so......same end result really). 

The annual leave calculation should be 40000/260* annual leave used = 769
The other 3.4 weeks of the month would be around 2091. Meaning OP's pay should be around 2860.

OP, forget how your employer is calculating their claim.....what did you agree to with regards to pay when you agreed to be furloughed? 

clb516

Hi,
Thanks for the replies...
@unholyangel - When I was furloughed back in April I received a letter saying I needed to agree to receive furlough pay capped £2,500 per month. We then received another letter stating the following with regards to enforced holiday in June:


Thanks.

unholyangel

clb516 said:

Hi,
Thanks for the replies...
@unholyangel - When I was furloughed back in April I received a letter saying I needed to agree to receive furlough pay capped £2,500 per month. We then received another letter stating the following with regards to enforced holiday in June:


Thanks.

Personally I would try pointing out to them that there has been no change to the working time regulations - which sets out annual leave pay entitlement. They cannot calculate it on furlough calculation which uses calendar days.

They should be treating it (when working out your pay) as if you were part furloughed for the month. So as if you were working 1 work & then furloughed the rest of the month. It is only when they are calculating for their claim that they should include the holiday period in the furlough calculation. 

clb516

I have just taken another look at my payslip and can see what she has done...
She has taken my normal monthly wage of £3333 - minus furlough cap of  £2500 = £833 and then divided this by 30, then paid 5 days at this difference!!


I'm guessing if mine is incorrect, everyone's will be 
Thanks for the help, I have emailed the payroll lady and asked her to take another look, I will report back once I hear anything.

Grumpy_chap

It is good that you have identified how the company did the calculation.
You said before, the normal calculation of a day's pay salary/52/5, so using 30 days while on furlough is not correct.
You can understand where the payroll department may have got confused, because furlough is based on calendar days while holiday pay should be based on working days.

unholyangel

Grumpy_chap said:

It is good that you have identified how the company did the calculation.
You said before, the normal calculation of a day's pay salary/52/5, so using 30 days while on furlough is not correct.
You can understand where the payroll department may have got confused, because furlough is based on calendar days while holiday pay should be based on working days.

I'd be gobsmacked if someone experienced in payroll didn't know the part in bold.