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Should the financial loss allowance paid for jury service be made up to gross pay or to net pay?
The Certificate of Loss of Earning or Benefit is a document given to persons who have been appointed to jury service so that they can give the court information about the extent to which their earnings will be affected by the period away from work. The certificate is completed and certified by the employer.
The intention is that a person should not be "out-of-pocket" as a result of jury service. For this reason, the employer certifies that "for each day [the employee] is required by the court for jury service, the net loss of earnings is [£;…]". The "net loss of earnings" is "the amount remaining after you have subtracted income tax and National Insurance contributions from the earnings which you will not pay your employee". The employer can enter a simple average, by dividing the normal net pay by the number of working days.
Further details are entered about the days of the week that the employee works and whether the employee will be able to return to work for half a day or a whole day if attendance at court is not required on a particular day. The certificate is signed by the employer to certify that the information is correct. The court will use that information to ensure that juror's allowances are only paid for periods for which the employee will not be paid by the employer.
Some employers continue to pay employees in full during jury service. The certificate describes this approach as "a valuable contribution to society by reducing the expenditure from the public purse". If the employee is to be paid as normal during jury service, the loss of earning certificate should not be completed.
However, there is no statutory requirement for employers to pay an employee during a period of jury service. Some employers may simply decide that, because the employee is not available for work, no wages will be paid. They may argue that, if the employee is out-of-pocket because the juror allowance is less than the employee's normal net pay, that is the employee's "contribution to society". Other employers prefer to top up the juror allowance so that the employee does not lose out financially.
If the employer does wish to top up the allowance, the amount paid must be no more than is necessary to maintain the employee's net earnings.
Example 1: An employee is on jury service for five working days, for which the gross pay would have been £;364.05 and the net pay £;280 (tax code 489L and table letter A). For the first fortnight of jury service, the maximum daily allowance is £;56.96. This is the equivalent of £;284.80 net pay for five days' work, or about £;371 gross pay. The employee's loss of earnings is fully covered by the court's payment.
Example 2: Another employee, in the same circumstances, would have been paid £;671.48 gross and £;490 net for the week. The employer would have paid £;73.94 in secondary NICs. The employee claims £;284.80 from the court but is short of £;205.20 for the week. The employer wishes to top up the court's payment to the employee's normal net pay, so pays an additional £;252.75 gross in order to provide the missing £;205.20 net. The employee takes home £;490, i.e. £;284.80 from the court, plus £;205.20 net pay from the employer.
The practice of some employers is simply to reduce the employee's gross pay by the amount of the allowance paid by the court. As a result, the employee has more "take-home" pay than normal. This procedure is wrong and fraudulent. The court's payment is intended to maintain an employee's net earnings and the employer has certified the net loss of earnings. By making a gross payment that results in the employee's net pay being higher than that declared is an abuse of the juror loss of earnings arrangement.
To deduct the allowance from gross pay is also expensive for the employer. As shown in the following Table, if the employer in example 2 had deducted the court's payment of £;284.80 from gross pay, the employer would have paid £;134.28 more in gross pay and £;17.18 more in secondary NICs than was necessary.
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| Employee works a normal week
Employer deducts juror's allowance from gross pay
Employer deducts juror's allowance from net pay
| Gross pay
| £;671.48
| £;386.85
| £;252.57
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| Income Tax
| £;122.27
| £;59.41
| £;29.93
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| Employee's NICs
| £;59.38
| £;32.21
| £;17.44
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| Net pay
| £;490.00
| £;295.23
| £;205.20
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| Juror's allowance
| nil
| £;284.80
| £;284.80
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| Total take home pay
| £;490.00
| £;579.87
| £;490.00
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| Employer's NICs
| £;73.94
| £;37.48
| £;20.30
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