Coronavirus: Reporting employees' wages to HMRC when you've claimed through the Coronavirus Job Retention Scheme

News article

How and when to report employees’ wages to HM Revenue & Customs (HMRC) using the PAYE Real Time Information system if you’ve claimed through the Job Retention Scheme

From 1 September, the government will pay 70% of wages up to a maximum cap of £2,187.50 for the hours the employee is on furlough. Employers will top up employees’ wages to ensure they receive 80% (up to £2,500). The caps are proportional to the hours not worked. You can read more information about the changes.

Information about the Job Retention Bonus was published on 31 July.

If you’re claiming a grant through the scheme, the steps to do this are:

1. Check if you can claim.
2. Check which employees you can put on furlough.
3. Steps to take before calculating your claim.
4. Calculate how much you should claim.
5. Claim for your employees’ wages.
6. Report a payment in PAYE Real Time Information.

If you’ve claimed a grant through the Coronavirus Job Retention Scheme, you should check if you need to report payments on the PAYE Real Time Information system, as this will depend on whether you are using the grant to:

  • pay wages
  • reimburse wages that you’ve already paid

Under both circumstances you must deduct income tax and National Insurance contributions on the full amount that you pay the employee, including any scheme grant and pay it to HMRC.

You must also pay HMRC the employer National Insurance contributions on the full amount that you pay the employee, including any scheme grant.

You must report these payments via a Full Payment Submission to HMRC on or before the pay date.

If you’re using the grant to pay wages

Any grant paid to you, is to be used to pay wages to your furloughed employees and should be treated in the same way as any wage payment and is subject to all payroll deductions.

You should pay employees on their contractual payment date so that employees receiving Universal Credit are not affected.

The grant paid is included in pay reported to HMRC via your payroll filing software of a Full Payment Submission, on or before the date that it is paid to your employees.

If you have paid your employees and submitted your Real Time Information submission early
If you have already paid your employees before their contractual payment date, the next time you pay them, make sure it’s on their normal contractual payment date.

You should submit the Full Payment Submission on or before the date that you make the payment.

If you’re using the grant to reimburse wages already paid

If you have continued to pay your employees during a period of furlough, in advance of receiving any payments under the scheme, you do not need to make another Full Payment Submission for this amount. This is because the furlough grant is reimbursing the wages you have already paid out and already reported.

If you pay the full amount of an employee’s normal wage during furlough
If you choose to top up employee wages above the scheme grant, that is your choice and at your own expense.

You must deduct and pay to HMRC income tax and employee National Insurance contributions on the full amount that you pay the employee.

You must also pay to HMRC the employer National Insurance contributions on the full amount that you pay the employee.

You do not need to make another Full Payment Submission for these amounts. This is because the furlough grant is reimbursing the amounts that you have already paid out and already reported.

If you have not paid your employees’ full wages yet

If you have not paid any of your employees any wage payments in a tax month
You must submit an Employer Payment Submission stating you have not paid any employees in that tax month. The Employer Payment Submission should be sent no later than 19th of the following tax month where possible. Do not submit a nil Full Payment Submission.

If you only pay your employees part of their normal wage until the grant payment is received
You must deduct and pay to HMRC income tax and employee National Insurance contributions on the full amount that you pay the employee.

You must also pay to HMRC the employer National Insurance contributions on the full amount that you pay the employee.

You must report these payments via a Full Payment Submission to HMRC on or before the pay date.

You must only send a Full Payment Submission reporting the payments you actually made. When you pay the remaining wages to your employees after receiving the grant payment, you must send another Full Payment Submission showing that payment.

If you are making a payment to your employees for March or April
If you are making a payment for March and April in your employee’s April wage, you must deduct tax and National Insurance Contributions on that full amount.

You must not backdate the March payment as if it was paid in March.

If you reported wages to HMRC in March 2020 that you did not pay to your employees
The Full Payment Submission must only include wages you have actually paid to your employees.

You will need to submit an Earlier Year Update or a Year-To-Date Full Payment Submission to reflect what you paid in wages. When you receive the grant to pay as wages, you should pay your employees on their contractual payment date for the current tax month. You should also submit a Full Payment Submission for 2020-21, on or before the date you make the payments to your employees.


First published 1 June 2020