Job Retention Bonus Guide

Table of Contents

What is Job Retention Bonus? 

In his Summer Statement, Chancellor Rishi Sunak announced a new £1,000 Job Retention Bonus for employers who bring back furloughed staff – if they remain continuously employed to the end of January 2021.

The bonus is set to support millions of employers who have kept on furloughed workers. It will work alongside the newly announced Job Support Scheme and could be worth more than 60% of average wages of workers who have been furloughed and are kept on until the start of February 2021.

When to claim Job Retention Bonus?

You will be able to claim it between February 15, 2021 and March 31, 2021.

The £1000 Job Retention Bonus is equal to a 20% wage subsidy for the employment costs of the average person previously furloughed, but for those on lower incomes, it equates to 40% of wage costs over the three-month period to the end of January 2021.

Employee Eligibility for Job Retention Scheme

You can claim for employees that:

  • You made an eligible claim for under the Coronavirus Job Retention Scheme
  • You kept continuously employed from the end of the claim period of your last Coronavirus Job Retention Scheme claim for them, until January 31, 2021
  • Are not serving a contractual or statutory notice period for you on January 31, 2021(this includes people serving notice of retirement)
  • You paid enough an amount in each relevant tax month and enough to meet the Job Retention Bonus minimum income threshold
  • If HMRC are still checking your Coronavirus Job Retention Scheme claims, you can still claim the Job Retention Bonus but your payment may be delayed until those checks are completed

Other considerations for Job Retention Bonus

HMRC will not pay the bonus if you made an incorrect Coronavirus Job Retention Scheme claim and your employee was not eligible for the Coronavirus Job Retention Scheme.

To be eligible for the bonus you must make sure that your employees have been paid at least the minimum income threshold, therefore, you must pay your employee a total of at least £1,560 (gross) throughout each of the tax months from November 6 to February 5.

Minimum Income threshold

To be eligible for the bonus, you must make sure that your employees have been paid at least the minimum income threshold. 

To meet the minimum income threshold, you must pay your employee a total of at least £1,560 gross, throughout the tax months:

  • November 6 to December 5, 2020
  • December 6 2020 to January 5 2021
  • January 6 2021 to February 5 2021
  • You must pay your employee at least one payment of taxable earnings (of any amount) in each of the relevant tax months. 

The minimum income threshold criteria apply regardless of:

  • How often you pay your employees
  • Any circumstances that may have reduced your employee’s pay in the relevant tax periods, such as being on statutory leave or unpaid leave
  • HMRC will check that your employees have been paid at least the minimum income threshold by checking information you have submitted through Full Payment Submissions via Real Time Information (RTI).

Claiming for an individual who is not an employee

You can claim the Job Retention Bonus for individuals who are not employees, such as office holders or agency workers, as long as you claimed a grant for them under the Coronavirus Job Retention Scheme and the other Job Retention Bonus eligibility criteria are met. 

To claim the Job Retention Bonus for employees that have been transferred to you – if TUPE and the PAYE business succession rules applied – you must have furloughed and successfully claimed for them under the Coronavirus Job Retention Scheme, as their new employer. The employees must also meet all the relevant eligibility criteria for the Job Retention Bonus. 

Claiming from February 15, 2021

Before you can claim the Bonus, you will need to have reported all payments made to your employee between November 6 , 2020 and February 5, 2021 to HMRC through Full Payment Submissions via Real Time Information (RTI). 

There are some steps you need to take now to make sure you are ready to claim. You must;

  • Still be renrolled for PAYE online
  • Comply with your PAYE obligations to file PAYE accurately and on time under Real Time Information (RTI) reporting for all employees between 6 April 2020 and 5 February 2021
  • Keep your payroll up to date and make sure you report the leaving date for any employee that stop working for your before the end of the pay period that they leave in
  • Use the irregular payment pattern indicator in Real Time Information (RTI) for any employees not being paid regularly
  • Company with all requests from HMRC to provide any employee data for past Coronavirus Job Retention Scheme claims.  
Job Retention Bonus Guide
Job Retention Bonus Guide

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