Furlough and shift pay

Fiftys1

Hi
I wonder if anyone can advise whether ‘regular’ shift payments (paid every month) should be included in the reference pay on which the 80% is calculated. This is not specifically included in the categories in HMRC information as included or excluded. Thanks for any advice.

Bhodigirl

Yes I would have thought so.  I manage a payroll and we base the furlough pay on our employees  salary including the shift premium element. I assume it is your contract that your pay includes a shift element .

Fiftys1

Hi there thank you for your reply- it’s my other half who is affected. Almost sure it’s in his contract so will check it out. He has worked in the same job for over 20 years with the same shift allowance every month. 

Bhodigirl

I would say most definitely it should be included.

Fiftys1

Thanks for your reply. We’ve had another look at the reference pay figure and it seems that they have actually included shift pay but taken off pension contribution and used that amount to base their 80% calculation on. Surely they should use the gross before pension as pension contributions have been taken out again when paying furlough? Is that correct?

Jeremy535897

It depends. See https://www.gov.uk/government/publications/find-examples-to-help-you-work-out-80-of-your-employees-wages/examples-of-how-to-work-out-80-of-your-employees-wages-national-insurance-contributions-and-pension-contributions#differentschemes

Fiftys1

Thanks after checking it does seem to be correctly calculated as pension deductions are in salary sacrifice - very grateful for your help