Furlough scheme winding down
From 1 July 2021, employers must now pay part of employees’ furlough wages as the Coronavirus Job Retention Scheme (CJRS) starts to wind down. What's the full story?
For claim periods ending on or before 30 June 2021 employers could claim from the CJRS 80% of an employee’s usual wages for hours not worked, up to a maximum of £2,500 per month, and only needed to cover the employers’ NI and auto-enrolment pension contributions. However, for claim periods from 1 July 2021, the level of government grant under the CJRS is being gradually reduced and employers must now contribute towards the cost of r furloughed employees’ wages as follows:
- July - government contribution to wages for hours not worked: 70% up to a cap of £2.187.50; employer contribution to wages for hours not worked: 10% up to a cap of £312.50.
- August - government contribution to wages for hours not worked: 60% up to a cap of £1,875; employer contribution to wages for hours not worked: 20% up to a cap of £625.
- September - government contribution to wages for hours not worked: 60% up to a cap of £1,875; employer contribution to wages for hours not worked: 20% up to a cap of £625.
Employers must also still pay the employers’ NI and auto-enrolment pension contributions.
Furloughed employee will therefore continue to receive 80% of their usual wages, up to the cap of £2,500 per month, for the time they spend on furlough, but their wage payment is now partly funded by the employer. The CJRS is then due to come to an end on 30 September 2021.
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