Whether an employee has fixed or variable pay is a key concept for calculating amounts that can be claimed under the Coronavirus Job Retention Scheme. The Tax Faculty explain that the classification of some employees is essentially the employer’s choice.
One of the areas highlighted was the issue of whether an employee receives fixed or variable pay.
Where an employee has fixed pay, the calculation of 80% of the employee’s usual wages is made using the wages paid in the last pay period ending on or before their reference date for the purposes of the CJRS.
If an employee receives variable pay, the calculation depends on when the employee became eligible for the CJRS, but generally involves averaging or a calendar look back.