We would recommend you follow the steps below to administer Furlough pay.
Please note that the payroll's furlough pay calculator caters for whole pay periods only. In instances where an employee is put on furlough part way through a pay period or returns to work after furlough absence in the middle of a pay period, we suggest you follow the (Optional) steps below.
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 the Coronavirus Job Retention Scheme (CJRS) at a later date. Specify a Payment Item Code of your choice for reference in the relevant box.
Step 5. Click on "Save" to save the new Furlough payment item.
Step 6. Click on 'Employer/Setup'.
Step 7. Click on 'Chart of SetUp'.
Step 8. Click the 'Department Setup' or 'Cost Center Setup'.
Step 9. Create a new Department/Cost Center called "Furloughed Employees".
Step 10. Click on "Save" to save the new Furlough Department/Cost Center.
Step 11. Click on 'Pension'.
Step 12. Click on 'Group Assigning'.
Step 13. Click on 'Assign Employee to Department' or 'Assign Employee to Cost Center'.
Step 14. Select the "Furloughed Employees" Department/Cost Center for each furlough paid employee from the drop down list and then click on the check box 'Select to Assign'.
Step 15. Click on the 'Confirm Selected' button to confirm the assigning.
Step 16. Use a calculator to calculate the Furlough amount i.e. Normal Pay x 0.8
Coronavirus Job Retention Scheme calculator
Step 17. Call HMRC if you are not sure what should be classed as 'Normal Pay'.
Step 18. Go to Payrun, Process Pay, and select the appropriate Pay Frequency. Click on Other Payments.
Step 19. In the Other Pay Items section, click on the drop down and select the newly created "Furlough Pay" item.
Step 20. Enter the Calculated "Furlough Pay" amount, click on Save, and then click on "Save Data & Process Pay" button.
Step 21. (Optional): Click on 'Continue'. In the Payrun Approval screen, click on "Draft Payslip - View / Print" and save the "Draft payslip report".
This step is crucial, since the draft payslip gives all required values - Employee's Gross Pay, Employer Pension, Employer NIC - for making a Furlough Claim from HMRC's Coronavirus Job Retention Scheme (CJRS) online portal.
Step 22. (Optional): After draft payslip is saved, do not proceed any further. Now Click on "Amend Pay Data" and add the "Normal Pay" or "Non-Furlough Pay" or any other "Top up Pay" and process the pay and update YTD in the usual manner.
Step 23. E-file the FPS as usual.
Note: If you've already paid, then rollback, repeat the steps and reprocess
Please do not call the payroll software provider to ask what the 'Normal Pay' amount should be 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.