Job Support Scheme Open – what is ‘reference salary’?

*Update* On Thursday 5th November 2030, the UK government confirmed a further extension of CJRS until the end of March 2021 the JSS introduction is delayed.

Under JSS Open, employers can claim up to a maximum of £1,541.75 per month. Further guidance will set out how to work out reference salary for JSS Closed.

Employers cannot claim for any time working. Claims are subject to a maximum reference salary of £3,125 per calendar month.

Reference salary is made up of regular pay obliged to be made:

  • regular wages
  • non-discretionary payments for hours worked, including overtime
  • non-discretionary fees
  • non-discretionary commission payments
  • piece rate payments

Do not include:

  • payments made at the discretion of the employer or a client, where the employer or client was under no contractual obligation to pay, including:
  • any tips, including those distributed through troncs
  • discretionary bonuses
  • discretionary commission payments
  • non-cash payments
  • non-monetary benefits like benefits in kind (such as a company car) and salary sacrifice schemes (including pension contributions) that reduce an employees’ taxable pay

Reference salary – fixed pay

The greater of:

  • the wages payable to the employee in the last pay period ending on or before 23 September 2020
  • the wages payable to the employee in the last pay period ending on or before 19 March 2020, this may be the same salary calculated under the CJRS scheme

Reference salary – variable pay

The greater of:

  • the wages earned in the same calendar period in the tax year 2019 to 2020
  • the average wages payable in the tax year 2019 to 2020
  • the average wages payable from 1 February 2020 (or the employee’s start date if later) until 23 September 2020

Prepare

If you are intending on utilising JSS, you need to:

  • Assess the workforce to judge qualifying requirements avoiding discrimination
  • Put in place suitable written agreements with employees
  • Obtain payroll information to assess ‘reference salary’
  • Obtain time records to assess ‘usual hours’

PAYadvice.UK 29/10/2020 updated 6/11/2020

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