Employers to chip in furlough

From July employers will have to chip in 10% of staff wages to anyone on furlough as the government reduces its level of support for the Coronavirus Job Retention Scheme

The furlough scheme was put in place in March 2020 to support employers unable to operate as normal due to the coronavirus pandemic.

As confirmed by the Budget on 3 March 2021, the scheme will continue until the end of September 2021 with some adjustment to funding levels from July 2021.

Until the end of June 2021, the grant remains at 80% of wages to a maximum of £2,500 per employee per month for their unworked hours – employers have the option to top this up to 100% of wages.

As of 1 July 2021, the government’s grant will reduce to 70% of employees’ wages for unworked hours at a cap of £2,187.50.

Pay for furloughed employees must remain at a minimum of 80% at a cap of £2,500, meaning employers must contribute 10% to furloughed staff wages up to £312.50.

From 1 August 2021 until the scheme ends, the government’s grant will reduce a final time to 60% of furloughed employees’ wages for unworked hours, at a cap of £1,875 per month.

With the 80% rule still in place, employers will need to contribute 20% to staff wages up to £625 per month from August.

Employers will also need to continue making national insurance and pension contributions until the end of the scheme.