From 1 July 2021, the level of contribution from the Government will be reduced from 80% to 70% (reducing further to 60% in August and September) and, as a result  employers will need to contribute towards the cost of their furloughed employees’ wages. To be eligible for the grant, an employer must continue to pay their furloughed employees 80% of their wages, up to a cap of £2,500 per month for the time they spend on furlough.

To assist, the table below shows the level of government contribution available from July, the required employer contribution and the amount that the employee receives per month where the employee is furloughed 100% of the time.

 

July August September Government contribution: wages for hours not worked 70% up to £2,187.50 60% up to £1,875 60% up to £1,875 Employer contribution: employer National Insurance contributions and pension contributions Yes Yes Yes Employer contribution wages for hours not worked 10% up to £312.50 20% up to £625 20% up to £625 For hours not worked employee receives 80% up to £2,500 per month 80% up to £2,500 per month 80% up to £2,500 per month

Wage caps are proportional to the hours not worked.

Employers can continue to choose to top up their employees’ wages above the 80% total and £2,500 cap for the hours not worked at their own expense.

In terms of expiry of the Furlough Scheme, it is still due to end on 30 September 2021 and even with the current delay to the lifting of lockdown restrictions, the Government has so far resisted calls to extend the scheme either across the board or to specific sectors beyond that date.

If you have any queries on the Furlough Scheme, please contact Matt Jenkin.