Furloughed workers

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If you cannot maintain your current workforce because your operations have been severely affected by coronavirus (COVID-19), you can furlough employees and apply for a grant that covers some of their usual wage costs.  The Government are calling this the Coronavirus Job Retention Scheme (CJRS).

GOV.UK guidance states that the employer (or their authorised agent) will need to:

  • designate affected employees as ‘furloughed workers,’ and notify their employees of this change
  • submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal 

From 1 July 2021, the level of grant that an employer can receive will be reduced and you will be asked to contribute towards the cost of your furloughed employees’ wages. To be eligible for the grant you must continue to pay your furloughed employees 80% of their wages, up to a cap of £2,500 per month for the time they spend on furlough.

More detailed information can be found in the Changes to the CJRS from July 2021 guidance

How to enter payments to furloughed workers in Payroll Manager

Before starting, Check that you have the latest copy of Payroll Manager installed by clicking ‘Help – Program Update‘ from the main menu.

You should create your own, custom (‘Furloughed Pay’) column (or columns), and use these to record payments made to employees during the time that they are furloughed. You should then use different pay elements, such as the ‘Basic’ or ‘Hourly’ columns to record payments made to employees for the days that they were working (if any).

If an employee has been furloughed part-way through a pay period (or if their furlough ends before the end a pay period) then it is vital that you separate and record the pay received in these pay periods either ‘furloughed pay’ or as ‘non-furloughed’ pay so as to be able to calculate your CJRS claim accurately.

Please follow the steps below:

To create a new addition column

1. Go to the ‘Pay Details‘ screen and click on the ‘Additions‘ tab.


2. Click on the ‘blue spanner‘ symbol in the column heading furthest to the right (this column may be labelled ‘User-defined’, ‘bonus’, or something else, depending on your use of the software).

blue spanner

3. A box will appear. Tick the next available ‘used‘ box, enter a suitable description (e.g. ‘Furloughed Pay’), and tick the ‘taxable’, ‘NIC-able’ and ‘Pensionable’ boxes as appropriate. Click ‘OK

add new column

4. The ‘Pay Details’ screen will now display your new column, into which you can enter the appropriate payment.

enter furloughed pay

Please note that you should enter whatever amount the employee is actually being paid into the software during these periods. If you have created new columns to enter furlough pay then make sure that you don’t also have this same pay entered in other columns too, such as the Basic or Hourly pay columns.

If you have chosen to ‘top-up’ an employees pay (perhaps to 100% of their normal pay), then you could if you wish (for your own reporting reasons) create a further column to record this extra amount, although doing so is not necessary in order to calculate the CJRS claim.


Example 1 – employee is furloughed for entire pay period:

A monthly paid employee is normally paid £2000 per month. The employee is furloughed for the whole of April, and remains furloughed for the foreseeable future.

The employer chooses to pay the employee £1600 (i.e. 80% of £2000) for the month of April, and enters all of this into the ‘Furlough pay’ column. They also make sure that there is no pay entered into any of the other columns (Basic, hourly etc) for that month.

Example 2 – employee is furloughed for only part of the pay period:

A monthly paid employee is normally paid £2000 per month. The employee is initially at work in April, but is then furloughed on 16th  April, and remains furloughed for the foreseeable future.

The employer chooses to pay the employee £1000 for the days that they worked in April, and a further £800 (i.e. 80% of £1000) for the time that they were furloughed in April. They enter £1000 in the ‘Basic Pay’ column, and £800 in the ‘furloughed pay’ column.

Example 3 – employee is furloughed for entire pay period and employer chooses to ‘top-up’ their pay

A monthly paid employee is normally paid £2000 per month. The employee is furloughed for the whole of April, and remains furloughed for the foreseeable future. The employer has decided that they wish to ‘top-up’ their pay so that they continue to receive the same amount as before.

The employer then enters the entire £2000 into the ‘Furlough pay’ column. They also make sure that there is no pay entered into any of the other columns (Basic, hourly etc) for that month.

Or, they could if they wish set up another column, called ‘furlough top-up’. If they decide to do this then they would enter £1600 (i,e, 80% of £2000) in the ‘Furlough Pay’ column, and the additional £400 in the ‘furlough top-up’ column.

Marking employees as ‘furloughed’

You should also add a ‘Furloughed’ marker on the ‘Pay Details’ screen to indicate which employees were furloughed at any time during a particular pay period. (Please note that you can only add the ‘furloughed’ marker to periods with pay dates of 30 September 2021 or earlier, which is when the furlough scheme comes to an end).

Go to the ‘Pay Details‘ screen, and select the employee and the pay period that you wish to mark as furloughed (this must be done one pay period at a time)

select period

Hold down ‘CTRL-F’ (then release) on your keyboard. A marker will appear to the left of the pay period indicating that the worker is furloughed.


Repeat the process for each pay period that you wish to mark as furloughed.

If you wish you can apply the marker to all employees that share the same pay frequency. To do this, press ‘CTRL-ALT-F‘, and the marker will be set for all employees with that particular pay frequency.

If you have made a mistake and need to remove a marker, simply press ‘CTRL-F‘ again

If for some reason you find that ‘CTRL-F’ does not work on your computer, then you can click on the ‘F‘ button on the ‘Pay Details’ toolbar instead.

If you need to mark an employee as being furloughed in a previous tax year then click ‘File – Open‘ from the main menu in Payroll Manager and open the previous year file. You may need to unlock the  pay period in order to do this i.e. highlight that particular pay period and press ‘CTRL-U’ on the keyboard.

The ‘furlough’ marker has no effect on the pay of an employee, and is not sent to HMRC. However it will become useful when processing a claim under the Coronavirus Job Retention Scheme. Please see our guide Coronavirus Job Retention Scheme – Online claims for more details.


 – I recently made the employee a leaver and entered a leaving date into the software. Because the Furlough scheme is being extended I now wish to furlough the employee, rather than make them redundant. How do I handle this in Payroll Manager? Please refer to https://www.gov.uk/employee-leaving#if-you-need-to-change-something, which explains what you should do in this circumstance.

– How much pay should I be entering? 100%, 80% , or something else?

Some employers may choose to continue to pay their employee their ‘normal’ salary whilst furloughed (i.e. 100% of their pay). Others may decide to pay 80% of their ‘normal’ salary, and so will be paying a lower amount. Whatever is decided between the employer and the employee, it is important that you enter the actual amount paid into the software.

Example: If an employer normally pays an employee £2000 per month (before the deduction of tax & NIC), but comes to an agreement with the employee to pay them 80% of their normal pay whilst furloughed, and if they are furloughed for the entire period, then the figure to enter into Payroll Manager will be £1600.

– How much should I pay someone whose pay varies? – The GOV.UK guidance for  ‘Work out 80% of your employees pay ‘ gives full details on how their pay should be calculated.

– What if the business does not have enough money to pay their employees?  – Businesses should continue to pay their employees on their normal pay dates. Businesses in need of short term cash flow support may be eligible for a Coronavirus Business Interruption Loan.

– How can I claim these payments back from HMRC? – On 20th April 2020 HMRC launched an ‘Online Portal’ to process CJRS claims.which will be used to process claims for furloughed pay. Please see our Coronavirus Job Retention Scheme – Online Claims page for more details.

Other questions:

What if I made someone redundant and now wish to furlough them?

Do directors qualify?

What if the employee has more than one job

Answers to these, and many more questions can be found on the GOV.UK guide Claim for wages under the CJRS scheme

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