Following on from the changes for Flexible Furlough from 1 July there is also to be a gradual end to the Job Retention Scheme with the scheme due to end on 31 October 2020.
As the level of grant gradually reduces, employers are still required to pay any staff on Furlough 80% of their wages up to a cap of £2,500 per month for the time they are furloughed. This cap is proportionate to the hours an employee has worked and been paid in full for under “flexible furlough”. The employer can still top up an employee’s furlough pay at their own cost too.
Up to the end of July the Government have paid 80% of wages up to the £2,500 cap plus employer National Insurance Contributions and Employer Pension Contributions for hours furloughed and the employer has been liable for any hours the employee has actually worked.
From 1 August this is changing, and for the month of August the Government will still pay 80% of the wages for hours furloughed up to a cap of £2,500 but the employer will have to pay the Employers NIC and Employers Pension contributions for the hours furloughed. The employer continues to have to pay all of the costs for the hours an employee is actually working.
In September, the employer must continue to pay the employee 80% of their wages (up to £2,500) for hours furloughed but the grant they receive will be 70% of the wages, up to £2,187.50. The employer is liable to pay all Employers National Insurance and Employers Pension contributions.
In October the percentage paid as a grant by the government towards wages reduces again to 60% (capped at £1,875) but the employer continues to pay all the Employers National Insurance Contributions and Employers Pension Contributions as well as any hours worked and topping up the “furloughed” hours to 80%.
The following HMRC Table summarises the changes being made.
| July | August | September | October | |
|---|---|---|---|---|
| Government contribution: employer NICs and pension contributions | Yes | No | No | No |
| Government contribution: wages | 80% up to £2,500 | 80% up to £2,500 | 70% up to £2187.50 | 60% up to £1,875 |
| Employer contribution: employer NICs and pension contributions | No | Yes | Yes | Yes |
| Employer contribution: wages | – | – | 10% up to £312.50 | 20% up to £625 |
| 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 |
