Job retention Scheme update
While the Government is currently paying 80% of workers’ salaries up to £2500 a month for some 8.4 million workers under its furlough scheme, it has made clear that it cannot continue to provide this unprecedented level of support for an indefinite period.
Now the Chancellor has announced that, although the Coronavirus Job Retention Scheme (CJRS) is set to run until October, employers will be asked to begin to pay a share of the wages.
In August, they will be expected to meet National Insurance (NI) and pension contributions while the Government continues to meet the 80% of salaries. For the average claim, this represents 5% of the gross employment costs the employer would have incurred had the employee not been furloughed.
In September, the Government percentage will be reduced to 70% (a cap of £2187.50) and in October to 60% (a cap of £1875) with employers expected to make up the 10% and then 20% difference.
Employers will also be expected to pay 100% of the NI and pension contributions.
For further information please read our newsletter in Practice news.