Calculating notice and redundancy pay for furloughed employees

The Coronavirus Job Retention Scheme (CJRS) is due to end on the 30th of September 2021.

If you then need to make furloughed employees redundant, it is important to know how to calculate their notice and redundancy pay.

Furloughed staff are entitled to receive statutory notice and redundancy pay based on their normal pre-furlough wage, rather than on their reduced furlough pay.

Any pay reductions made because the employee was furloughed are disregarded for the purposes of calculating final payments.

For those with normal working hours, this is easy as pay is based on what it would be had they been working their usual working hours.

For employees without normal working hours, a weeks pay is calculated using the criteria for claiming furlough pay – just without the cap.

In relation to redundancy pay, the usual statutory cap of £544 a week still applies.