# Examples of how to calculate your employees' wages, National Insurance contributions and pension contributions

Updated 7 August 2020

© Crown copyright 2020

This publication is licensed under the terms of the Open Government Licence v3.0 except where otherwise stated. To view this licence, visit nationalarchives.gov.uk/doc/open-government-licence/version/3 or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: psi@nationalarchives.gsi.gov.uk.

Where we have identified any third party copyright information you will need to obtain permission from the copyright holders concerned.

This publication is available at 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

## 1. Work out your claim period

### 1.1 Example of a pay period spanning July and August.

Employee has a 4-week pay period which falls 20 July to 16 August. The employer cannot claim for this as a single period so makes two separate claims:

- 20 to 31 July
- 1 to 16 August

Read guidance on a pay period spanning July and August.

## 2. Work out your employee’s usual hours and furloughed hours

### 2.1 Example of how to work out usual hours for employees who are contracted for a fixed number of hours

An employee is contracted to work for 37 hours in each week, across 5 working days. The employee is paid weekly. The employer looks to make a flexible furlough claim for the period between 1 August 2020 to 10 August 2020 (10 calendar days). There are two pay periods partially in this claim period:

- 29 July to 4 August
- 5 August to 11 August

The employer calculates the usual hours for the days in each pay period that are in the employer’s claim.

The employer is calculating on a pay period basis so they must round the nearest number of usual hours for each pay period up or down to the nearest whole number.

The employer first calculates the usual hours for the days they are claiming for in the pay period 29 July to 4 August as follows:

- Start with 37 hours (the hours your employee was contracted for at the end of the last pay period ending on or before 19 March 2020)
- Divide by 7 (the number of days in the repeating working pattern, including non-working days)
- Multiply by 4 (the number of calendar days in the pay period (or partial pay period) the employer is claiming for – this is a partial pay period) = 21.14
- Round up or down to the nearest whole number if the outcome isn’t a whole number = 21

The employer next calculates the usual hours for the days they are claiming for in the pay period 5 August to 11 August as follows:

- Start with 37 hours (the hours your employee was contracted for at the end of the last pay period ending on or before 19 March 2020)
- Divide by 7 (the number of days in the repeating working pattern, including non-working days)
- Multiply by 6 (the number of calendar days in the pay period (or partial pay period) the employer is claiming for – this is a partial pay period) = 31.71
- Round up or down to the nearest whole number if the outcome isn’t a whole number = 32

Read guidance on how to work out usual hours for employees who are contracted for a fixed number of hours.

### 2.2 Example of how to work out usual hours for employees who are contracted for a fixed number of hours

An employee is contracted to work on a shift pattern of four consecutive 12-hour days and then have four days off. This working pattern repeats every 8 days. The employee is paid calendar monthly. The employer looks to make a flexible furlough claim for the period 1 July 2020 to 31 July 2020 (31 calendar days). The pay period and the claim period align.

The employer calculates the usual hours for the July pay period by following the steps above:

- Start with 48 hours (the hours your employee was contracted for in their repeating working pattern at the end of the last pay period ending on or before 19 March 2020 – which in this example, is 12 hours multiplied by 4 days)
- Divide by 8 (the number of days in the repeating working pattern, including non-working days)
- Multiply by 31 (the number of calendar days in the pay period (or partial pay period) the employer is claiming for) = 186
- The outcome of step 3 is a whole number, so does not need to be rounded up to the next whole number

Read guidance on how to work out usual hours for employees who are contracted for a fixed number of hours.

### 2.3 Example of how to work out usual hours for an employee who is contracted for a fixed number of hours and was off work sick or on family related statutory leave at any time during the last pay period ending on or before 19 March 2020

An employee is paid calendar monthly, and the employee’s last pay period ending on or before 19 March 2020 ended on 29 February 2020.

In the pay period ending 29 February 2020, the employee was off sick for 7 days.

When calculating the hours the employee was contracted for at the end of the last pay period ending on or before 19 March 2020, the usual hours should be calculated as if the employee had not taken that leave.

Read guidance on how to work out usual hours for employees who are contracted for a fixed number of hours.

### 2.4 Example of how to work out the average number of hours worked in the tax year 2019 to 2020 for an employee who works variable hours

An employee started work for an employer in 2005. The employee is paid every two weeks and was furloughed on 23 March 2020.

The employer calculates that the employee worked 1,850 hours between 6 April 2019 and 22 March 2020. This includes any hours that the employee received holiday pay for.

The employee will be paid for the pay period 1 July 2020 to 14 July 2020, and the employer is looking to make a flexible furlough claim for the same period (1 July 2020 to 14 July 2020).

The employer works out the average number of hours worked in the tax year 2019 to 2020 as follows:

- Start with 1850 (the number of hours actually worked (or on paid annual or flexi leave) in the tax year 2019 to 2020 before the employee was furloughed)
- Divide by 352 (the number of calendar days the employee was employed by the employer in the tax year 2019 to 2020, up until the day before they were furloughed)
- Multiply by 14 (the number of calendar days in the pay period (or partial pay period) which the employer is claiming for) = 73.58
- Round up to the next whole number and because the calculation is for an entire claim period = 74

The employer will also need to work out the usual hours based on the corresponding calendar period in the tax year 2019 to 2020, and use the higher figure for the usual hours.

Read guidance on how to work out the average number of hours worked in the tax year 2019 to 2020 for an employee who works variable hours.

### 2.5 Example of how to work out the average number of hours worked in the tax year 2019 to 2020 for an employee who works variable hours and was on a period of statutory adoption leave in the tax year 2019 to 2020

An employee started work for an employer in 2013. The employee is paid every four weeks and was furloughed on 31 March 2020.

The employee will be paid for the pay period 1 July 2020 to 28 July 2020, and the employer is looking to make a flexible furlough claim for the same period (1 July 2020 to 28 July 2020).

The employer calculates that the employee worked 616 hours between 6 April 2019 and 31 March 2020. This includes any hours that the employee received holiday pay for. The employee was on a period of statutory adoption leave between 1 June 2019 and 14 January 2020 – this is 228 days.

The number of days between 6 April 2019 and 30 March 2020 is 360 days (inclusive). The employer should not include the days where the employee was on statutory adoption leave, leaving 132 days.

The employer works out the average number of hours worked in the tax year 2019 to 2020 as follows:

- Start with 616 (the number of hours actually worked (or on paid annual leave or “flexi” leave) in the tax year 2019 to 2020 before the employee was furloughed)
- Divide by 132 (the number of calendar days the employee was employed by the employer in the tax year 2019 to 2020, up until the day before they were furloughed, not including the time that the employee was on statutory adoption leave)
- Multiply by 28 (the number of calendar days in the pay period (or partial pay period) which the employer is claiming for) = 130.66
- Round up to the next whole number because the outcome isn’t a whole number and because the calculation is for an entire claim period = 131

The employer will also need to work out the usual hours based on the corresponding calendar period in the tax year 2019 to 2020, and use the higher figure for the usual hours.

### 2.6 Example of how to work out the usual hours worked in the same period last year for an employee who works variable hours and the pay period (or partial pay period) being claimed for starts and ends on the same calendar days as the identified pay period

An employee is paid calendar monthly and has a calendar monthly pay period. The employer is looking to make a claim for the July 2020 pay period.

The employee works variable hours so the employer needs to work out the usual hours based on the higher of either:

- the average number of hours worked in the tax year 2019 to 2020
- the corresponding calendar period in the tax year 2019 to 2020

The employer works out the usual hours based on the corresponding calendar period in the tax year 2019 to 2020. The employer would need to look at the hours worked in July 2019.

The employer will also need to work out the average number of hours worked in the tax year 2019 to 2020.

### 2.7 Example of how to work out the usual hours based on the hours worked in more than one pay period in the tax year 2019 to 2020

An employer processes a weekly payroll and is looking to make a claim for the period 20 July 2020 to 26 July 2020 for an employee who works variable hours. The employee has worked for the employer since 2017.

The employer works out the usual hours based on the corresponding calendar period in the tax year 2019 to 2020. The corresponding calendar period in 2019 is 20 July 2019 to 26 July 2019. That period covers two pay periods in 2019:

- 15 July 2019 to 21 July 2019 (2 calendar days overlap with the 2020 pay period – 20 to 21 July)
- 22 July 2019 to 28 July 2019 (5 calendar days overlap with the 2020 pay period – 22 to 26 July)

In 2019, the employee worked the following hours:

- in the pay period starting 15 July 2019 - 28 hours
- in the pay period starting 22 July 2019 - 35 hours

The employer works out the usual hours based on the corresponding calendar period in the tax year 2019 to 2020 as follows:

- Start with 28 (the number of hours worked in the first pay period identified in the tax year 2019 to 2020)
- Multiply by 2 (the number of calendar days in that pay period which correspond to at least one calendar day in the pay period (or partial pay period) the employer is claiming for – 20 and 21 July)
- Divide by 7 (the total number of calendar days in the pay period in the tax year 2019 to 2020) = 8

Step 4 is that steps 1, 2 and 3 are repeated for each subsequent identified pay period. The employer will need to repeat steps 1, 2 and 3 for the next pay period:

- Start with 35 (the number of hours worked in the next pay period identified in the tax year 2019 to 2020)
- Multiply by 5 (the number of calendar days in that pay period which correspond to at least one calendar day in the pay period (or partial pay period) the employer is claiming for – 22 to 26 July)
- Divide by 7 (the total number of calendar days in the pay period in the tax year 2019 to 2020) = 25

There are no more pay periods in 2019 to consider:

- Add them all together, 8 + 25 = 33 6.The outcome is a whole number, so does not need to be rounded up to the next number.

The employer will also need to work out the average number of hours worked in the tax year 2019 to 2020 and use the higher figure for the employee’s usual hours.

Read guidance on how to work out the usual hours based on the hours worked in more than one pay period in the tax year 2019 to 2020.

### 2.8 Example for calculating the number of furloughed hours

An employee is furloughed from 1 April 2020 and the employee becomes a flexibly furloughed employee on 10 July 2020. The employer claims weekly, in line with when it processes its payroll.

An employer is looking to claim for the employee for the period 22 July 2020 to 28 July 2020 (1 week). The employer works out the employee’s usual hours for this period to be 37 hours. The employee does not take leave in this period.

The employee and employer agree that the employee will work 10 hours in the period 22 July 2020 to 28 July 2020. The employee works 10 hours in that period.

The employer calculates the employee’s number of furloughed hours as follows:

- Start with 37 (the employee’s usual hours)
- Subtract 10 (the number of hours the employee actually worked in the claim period)

The employee is furloughed for 27 of their 37 usual hours.

Read guidance on calculating the number of furloughed hours.

## 3. Work out 80% of your employee’s normal wage

### 3.1 Example of working out the maximum wage amount for part of a pay period

A Limited company pays all of their employees weekly on each Friday and puts all of their employees on furlough on Wednesday 8 April 2020.

A Ltd will need to calculate the maximum wage amount using the daily calculation for the first pay period which ends on Friday 10 April 2020. This is £83.34 multiplied by 3 days, which is £250.02.

For the next pay period, 11 April 2020 to 17 April 2020, the maximum amount is £576.92 because the pay period is a whole week, and the employee is furloughed on each day.

A Ltd makes a claim for 8 April 2020 to 17 April 2020. The maximum wage amount is the two amounts added, £826.94.

Read guidance on how to work out the maximum wage amount.

### 3.2 Example for working out 80% of wages for fixed rate full or part time employees on a salary

Worker started work for B Ltd in 1997 and is paid a regular monthly salary on the last day of each month. The worker agreed to be placed on furlough from 23 March 2020. The worker was paid £2,400 for the last full monthly pay period before 19 March 2020. There are 9 days between 23 March and 31 March.

B Ltd works out 80% of the employee’s wage:

- Start with £2,400 (employee’s wages)
- Divide by 31 (the total number of days in March)
- Multiply by 9 (the number of furlough days in March)
- Multiply by 80% - which is £557.42

Read guidance on how to work out 80% of wages for fixed rate full or part time employees on a salary.

### 3.3 Example of working out 80% of wages for fixed rate full or part time employee who returns to working their usual hours during the claim period

Employee has a calendar month pay period and usually works 40 hours per week. The employee was paid £2,000 in the last full monthly pay period before 19 March 2020. The employee was furloughed continuously from 13 April to 30 June. They are flexibly furloughed from 1 July, working 10 hours per week, returning to work their full usual hours from 13 July.

The employer works out 80% of the employee’s wage:

- Start with £2,000 (employee’s wages)
- Divide by 31 (the total number of days in July)
- Multiply by 12 (the number of furlough days in July)
- Multiply by 80% - which is £619.35

Read guidance on how to work out 80% of wages for fixed rate full or part time employees on a salary.

### 3.4 Example for working out 80% of your employee’s wages if they have not been paid for a full pay period up to 19 March 2020

Employee started work for B Ltd on 21 February 2020 and is paid on the last day of each month. The employee had not had a full pay period up to 19 March 2020, but was paid £700 as a pro-rata of their salary on 29 February 2020. There are 9 days between 21 February and 29 February. The employee agrees to be furloughed from 25 March 2020. There are 7 days between 25 March and 31 March.

- Start with £700 (the amount they were paid in their last pay period)
- Divide by 9 (the number of days in their last pay period – including non-working days)
- Multiply by 29 (days in February)
- Divide by 31 (the total number of days in the March pay period)
- Multiply by 7 (the number of furlough days in the March pay period)
- Multiply by 80% - which is £407.46

Read guidance on how to work out 80% of wages if your employee has not been paid for a full pay period up to 19 March 2020.

### 3.5 Example of claiming for the same period last year

A Ltd pays an employee on a weekly basis. The employee’s pay period starts on 23 March 2020 and ends on 29 March 2020. The employee was furloughed for the whole week. The employee was paid £350 for 23 March 2019 to 29 March 2019.

- Start with £350 (the amount they earned in the same period last year)
- Divide by 7 (the total number of days in this pay period)
- Multiply by 7 (the number of furlough days in this pay period)
- Multiply by 80% - this is £280

Read guidance on how to work out 80% of the same month’s wages from the previous year.

### 3.6 Example of working out 80% of average monthly wages for the last tax year

Employee started work for A Ltd in 2018 and was placed on furlough.

Employee started work for A Ltd in 2018 and was placed on furlough on 23 March 2020, receiving wages of £15,000 between 6 April 2019 and 22 March 2020 inclusive. There are 352 days between 6 April 2019 and 22 March 2020. A Ltd is claiming for 23 March to 31 March 2020. There are 9 days between 23 March and 31 March.

- Start with £15,000 (the amount of wages that was payable to the employee in the tax year up to the day before they were furloughed)
- Divide it by 352 (the number of days from the start of employment, up to the day before they were furloughed)
- Multiply by 9 (the number of furlough days in this pay period)
- Multiply by 80% - this is £306.82

Read guidance on how to work out 80% of average monthly wages for the last tax year.

### 3.7 Example of working out 80% of average wages for the last tax year if employment started after 6 April 2019

Employee started work for A Ltd on 1 May 2019 and was placed on furlough on 23 March 2020, receiving wages of £15,000 between 1 May 2019 and 22 March 2020 inclusive. There are 327 days between 1 May 2019 and 22 March 2020. A Ltd is claiming for 23 March to 31 March 2020. There are 9 days between 23 March and 31 March.

- Start with £15,000 (the amount of wages that was payable to the employee in the tax year up to the day before they were furloughed)
- Divide it by 327 (the number of days from the start of employment, up to the day before they were furloughed)
- Multiply by 9 (the number of furlough days in this pay period)
- Multiply by 80% - this is £330.28

Read guidance on how to work out 80% of average wages for the last tax year.

### 3.8 Example of how to calculate minimum furlough pay for an employee who is flexibly furloughed

Q Ltd’s employee has been furloughed continuously since 1 May 2020. The employee is paid calendar monthly. From 1 July, the employee returns to work part-time for Q Ltd and is furloughed for the rest of their usual hours. Q Ltd makes a flexible furlough claim for 1 July to 31 July.

Q Ltd has calculated that the employee’s usual hours from 1 July to 31 July are 164. The employee actually works 80 hours, and is therefore furloughed for the remaining 84 usual hours. Q Ltd has calculated that 80% of the employee’s usual wages is £1,800. The maximum wage amount is £2,500 as the claim is for a full month.

Q Ltd calculates the minimum furlough pay:

- Start with £1,800 - this is the lesser of 80% of the employee’s usual wages (£1,800) and the maximum wage amount (£2,500)
- Multiply by 84 - this is the employee’s furloughed hours
- Divide by 164 - this is the employee’s usual hours

Q Ltd must pay the employee £921.95 for the time they are on furlough. Q Ltd can choose to pay the employee more than this for the time they are furloughed, but does not have to. Q Ltd will next need to calculate how much of the minimum furlough pay it can claim for.

Read guidance on how to calculate minimum furlough pay for an employee who is flexibly furloughed.

### 3.9 Example of how to work out how much of the minimum furlough pay you can claim for

R Ltd’s employee has been furloughed continuously since 15 April 2020. The employee is paid calendar monthly. R Ltd makes a claim for 1 September to 30 September. R Ltd has calculated that the minimum furlough pay for this period is £1,500, which is 80% of the employee’s usual wages.

R Ltd calculates how much it can claim for its employee’s furlough pay:

- Start with £1,500 - this is the minimum furlough pay
- Divide by 80
- Multiply by 70 - because the claim period is in September

R Ltd can claim a grant of £1,312.50 towards its employee’s wages. R Ltd must pay the employee the minimum furlough pay amount of £1,500, and can choose to pay more than this but does not have to.

Read guidance on how to work out how much of the minimum furlough pay you can claim for.

## 4. Work out how much you can claim for employer National Insurance contributions (NICs)

### 4.1 Example of calculating the grant for employer NICs costs for an employee who is fully furloughed (for claims between 1 July and 31 July 2020).

X Ltd makes a claim for an employee who is paid weekly. The claim period is 6 July to 12 July 2020, which aligns with the employee’s pay period. X Ltd is claiming £500 towards its employee’s wages.

X Ltd first calculates the adjusted secondary NICs threshold.

- Start with £169 (this is the relevant secondary NICs threshold)
- Divide by 7 (the number of days in the pay period)
- Multiply by 7 (the number of days in the furlough claim)

Steps 4 and 5 are not necessary because the employee is not flexibly furloughed part-time. The adjusted secondary NICs threshold is £169.

X Ltd next calculates the amount of the grant towards employer NICs costs.

- Start with £500 (the amount of the gross pay grant)
- Deduct £169 (the adjusted secondary NICs threshold)
- Multiply by 13.8%

X Ltd can claim £45.68 towards employer NICs costs.

If X Ltd claims the Employment Allowance, it must make sure not to claim too much from the scheme.

Read guidance on calculating the grant for employer NICs costs for an employee who is fully furloughed.

### 4.2 Example of calculating the grant for employer NICs costs for an employee who is flexibly furloughed (for claims from 1 July to 31 July 2020)

Y Ltd makes a claim for an employee who is paid weekly. The claim period is 6 July to 12 July 2020, which aligns with the employee’s pay period. Y Ltd is claiming £170 towards its employee’s wages. The employee is furloughed for 10 of their 30 usual hours during the claim period.

Y Ltd first calculates the adjusted secondary NICs threshold.

- Start with £169 (this is the relevant secondary NICs threshold)
- Divide by 7 (the number of days in the pay period)
- Multiply by 7 (the number of days in the furlough claim)
- Divide by 30 (the employee’s usual hours in the claim period)
- Multiply by 10 (the hours the employee is furloughed in the claim period)

The adjusted secondary NICs threshold is £56.33

Y Ltd next calculates the amount of the grant towards employer NICs costs.

- Start with £170 (the amount of the gross pay grant)
- Deduct £56.33 (the adjusted secondary NICs threshold)
- Multiply by 13.8%

Y Ltd can claim £15.69 towards employer NICs costs.

If Y Ltd claims the Employment Allowance, it must make sure not to claim too much from the scheme.

Read guidance on calculating the grant for employer NICs costs for an employee who is flexibly furloughed (for claims from 1 July to 31 July 2020).

### 4.3 Example of calculating the grant for employer NICs costs for an employee who is flexibly furloughed where the flexible furlough claim period does not match the employee’s pay period

Z Ltd makes a claim for an employee who is paid weekly. The claim period is 29 July to 31 July 2020, which falls into the 29 July to 4 August 2020 pay period. Z Ltd is claiming £160 towards its employee’s wages. The employee is furloughed for 10 of their 15 usual hours during the claim period.

Z Ltd first calculates the adjusted secondary NICs threshold.

- Start with £169 (this is the relevant secondary NICs threshold)
- Divide by 7 (the number of days in the pay period)
- Multiply by 3 (the number of days in the furlough claim)
- Divide by 15 (the employee’s usual hours in the claim period)
- Multiply by 10 (the hours the employee is furloughed in the claim period)

The adjusted secondary NICs threshold is £48.29.

Z Ltd next calculates the amount of the grant towards employer NICs costs.

- Start with £160 (the amount of the gross pay grant)
- Deduct £48.29 (the adjusted secondary NICs threshold)
- Multiply by 13.8%

Z Ltd can claim £15.42 towards employer NICs costs.

If Z Ltd claims the Employment Allowance, it must make sure not to claim too much from the scheme.

## 5. Work out how much you can claim for employer’s pension contributions

### 5.1 Example of calculating the grant for employer pension contributions for an employee who is fully furloughed (for claims from 1 July 2020 to 31 July 2020)

X Ltd makes a claim for an employee who is paid weekly. The claim period is 6 July to 12 July 2020, which is also the employee’s pay period. X Ltd is claiming £500 towards its employee’s wages.

X Ltd first calculates the adjusted LLQE.

- Start with £120 (this is the relevant LLQE)
- Divide by 7 (the number of days in the pay period)
- Multiply by 7 (the number of days in the furlough claim)

Steps 4 and 5 are not necessary because the employee is not flexibly furloughed. The adjusted LLQE is £120.

X Ltd next calculates the amount of the grant towards pension contributions.

- Start with £500 (the amount of the gross pay grant)
- Deduct £120 (the adjusted LLQE)
- Multiply by 3%

X Ltd can claim £11.40 towards employer pension contributions.

Read guidance on calculating the grant for employer pension contributions for an employee who is fully furloughed (for claims from 1 July 2020 to 31 July 2020).

### 5.2 Example of calculating the grant for employer pension contributions for an employee who is flexibly furloughed (for claims from 1 July 2020 to 31 July 2020)

Y Ltd makes a claim for an employee who is paid weekly. The claim period is 6 July to 12 July 2020, which is also the employee’s pay period. Y Ltd is claiming £170 towards its employee’s wages. The employee is furloughed for 10 of their 30 usual hours during the claim period.

Y Ltd first calculates the adjusted LLQE.

- Start with £120 (this is the relevant LLQE)
- Divide by 7 (the number of days in the pay period)
- Multiply by 7 (the number of days in the furlough claim)
- Divide by 30 (the employee’s usual hours in the claim period)
- Multiply by 10 (the hours the employee is furloughed in the claim period)

The adjusted LLQE is £40.

Y Ltd next calculates the amount of the grant towards employer pension contributions.

- Start with £170 (the amount of the gross pay grant)
- Deduct £40 (the adjusted LLQE)
- Multiply by 3%

Y Ltd can claim £3.90 towards employer pension contributions.

Read guidance on calculating the grant for employer pension contributions for an employee who is flexibly furloughed (for claims from 1 July 2020 to 31 July 2020).

### 5.3 Example of calculating the grant for employer pension contributions for an employee who is flexibly furloughed where the flexible furlough claim period does not align with the employee’s pay period (for claims from 1 July 2020 to 31 July 2020)

Z Ltd makes a claim for an employee who is paid weekly. The claim period is 29 July to 31 July 2020, which falls into the 29 July to 4 August 2020 pay period. Z Ltd is claiming £160 towards its employee’s wages. The employee is furloughed for 10 of their 15 usual hours during the claim period.

Z Ltd first calculates the adjusted LLQE.

- Start with £120 (this is the relevant LLQE)
- Divide by 7 (the number of days in the pay period)
- Multiply by 3 (the number of days in the furlough claim)
- Divide by 15 (the employee’s usual hours in the claim period)
- Multiply by 10 (the hours the employee is furloughed in the claim period)

The adjusted LLQE is £34.29.

Z Ltd next calculates the amount of the grant towards employer pension contributions.

- Start with £160 (the amount of the gross pay grant)
- Deduct £34.29 (the adjusted LLQE)
- Multiply by 3%

Z Ltd can claim £3.77 towards employer pension contributions.