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COVID-19. Employers now required to contribute to furlough costs

Changes to the Furlough Scheme

31 Jul 2020

As a reminder and as mentioned in my earlier blog, employers will have to start contributing towards some of their furloughed employees’ costs from 1 August.

Regardless of how long the employee has been furloughed, the employer will be required to pay the employers’ National Insurance Contributions and pension contributions. This accounts for approximately 5% of the overall employment costs for each employee.  The government will continue to pay up to 80% of the employees’ wages, up to the maximum of £2,500 per month.

The following changes will then be introduced month by month

From September, the government will pay 70% of wages up to a cap of £2,187.50. Employers will pay ER NICs and pension contributions and 10% of wages to make up the 80% total up to a cap of £2,500.

From October, the government will pay 60% of wages up to a cap of £1,875. Employers will pay ER NICs and pension contributions and 20% of wages to make up the 80% total up to a cap of £2,500.

If you need assistance on calculating the claims which are not straightforward, Dipali Buch, Partner and Head of Payroll in her webinar explains the calculations with helpful detailed examples and formulae to use 

If you have any questions on the furlough scheme please contact us.

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