Changes to Furlough Pay – What you need to know

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The amount that employers can claim in furlough pay from the Coronavirus Job Retention Scheme (CJRS) will reduce at the end of June. Below we summarise everything that you need to know.

What employers can claim:

  • For periods ending on or before 30th June 2021: 80% of an employee’s usual salary for hours not worked, up to a maximum of £2,500 per month;
  • From 1st July 2021: 70% of an employee’s standard salary for hours not worked, up to a maximum of £2,187.50 per month, and will pay the other 10% themselves;
  • From 1st August 2021: 60% of an employee’s usual salary for hours not worked, up to a maximum of £1,875 per month, and will pay the other 20% themselves.

Changes to the level of grants from 1 July 2021:

From 1 July 2021, the level of grants 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.

The table below shows the level of government contribution available in the coming months, the required employer contribution, and the amount that the employee receives per month where the employee is furloughed 100% of the time.

Wage caps are proportional to the hours not worked.

May June July August September
Government contribution: wages for hours not worked 80% up to £2,500 80% up to £2,500 70% up to £2,187.50 60% up to £1,875 60% up to £1,875
Employer contribution: employer National Insurance contributions and pension contributions Yes Yes Yes Yes Yes
Employer contribution wages for hours not worked No No 10% up to £312.50 20% up to £625 20% up to £625
For hours not worked employee receives 80% up to £2,500 per month 80% up to £2,500 per month 80% up to £2,500 per month 80% up to £2,500 per month 80% up to £2,500 per month

You can continue to choose to top up your employees’ wages above the 80% total and £2,500 cap for the hours not worked at your own expense.

What employers will have to pay:

  • The cost of employer National Insurance and pension contributions;
  • Holiday pay for any holiday that the employee takes (the difference between 80% and 100% of pay);
  • From 1st July 2021: the contributions set out above.

Need more support?

MIA members can get in touch with Alice to access tailored advice to suit your business and staff structure.