From July 2021, employers will be required to pay 10% of staff wages to anyone furloughed as the government looks to reduce its level of support for the Coronavirus Job Retention Scheme (CJRS).
The furlough scheme was introduced in March 2020 to support employers unable to operate as normal due to the pandemic. As confirmed by the Budget on 3rd March 2021, the scheme will continue until the 30th September 2021 with some adjustment to funding levels from July.
Until the 30th June 2021, the grant remains 80% of wages capped at £2,500 per employee per month for their unworked hours. Employers can continue to choose to top up employees’ wages above the 80% total and £2,500 cap for the hours not worked at their own expense.
From the 1st July 2021, the 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 will have to contribute 10% to furloughed staff wages up to £312.50.
From the 1st August 2021 the grant will reduce a final time to 60% of furloughed employees’ wages for unworked hours, capped at £1,875 per month, this means employers will therefore need to contribute up to £625 per month (20% of wages up to £2,500).
Employers will also need to continue making both national insurance and pension contributions for furloughed workers.