From 1 August the government grant provided through the job retention scheme will be slowly tapered.
- in June and July, the government will pay 80% of wages up to a cap of £2,500 as well as employer National Insurance (ER NICs) and pension contributions for the hours the employee does not work – employers will have to pay employees for the hours they work;
- in August, the government will continue to pay 80% of wages up to a cap of £2,500 but employers will pay ER NICs and pension contributions – for the average claim, this represents 5% of the gross employment costs that the employer would have incurred if the employee had not been furloughed;
- in September the government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee does not work – employers will pay ER NICs, pension contributions and 10% of wages to make up 80% of the total up to a cap of £2,500;
- in October the government will pay 60% of wages up to a cap of £1,875 for the hours the employee does not work – employers will pay ER NICs, pension contributions and 20% of wages to make up 80% of the total up to a cap of £2,500;
- the cap on the furlough grant will be proportional to the hours not worked.
Many smaller employers have some or all of their ER NIC bills covered by the Employment Allowance so will not be significantly impacted by that part of the tapering of the government contribution.
Around a quarter of CJRS monthly claims relate to wages that are below the threshold where ER NICs and auto enrolment contributions are due, and so no employer contribution will be required for these furloughed employees until 1 September.