Coronavirus Job Retention Scheme (Furloughed Workers)

Coronavirus Job Retention Scheme (Furloughed Workers)

Update: 8 July 2020

Job Retention Bonus – The government will introduce a one-off payment of £1,000 to UK employers for every furloughed employee who remains continuously employed through to the end of January 2021. Employees must earn above the Lower Earnings Limit (£520 per month) on average between the end of the Coronavirus Job Retention Scheme and the end of January 2021. Payments will be made from February 2021. Further detail about the scheme will be announced by the end of July.

The online service you'll use to claim under the Coronavirus Job Retention Scheme is now available: www.gov.uk/guidance/claim-for-wages-through-the-coronavirus-job-retention-scheme.

If you cannot maintain your current workforce because your operations have been severely affected by coronavirus (COVID-19), you can furlough employees and apply for a grant that covers up to 80% of their usual monthly wage costs, up to £2,500 a month, plus the associated Employer National Insurance contributions and pension contributions (up to the level of the minimum automatic enrolment employer pension contribution) on that subsidised furlough pay.

This is a temporary scheme that was initially put in place for 4 months starting from 1 March 2020 and will continue in its current form until the end of July. Employers can use the scheme anytime during this period.

From 1 July, employers can bring back to work employees that have previously been furloughed for any amount of time and any shift pattern, while still being able to claim CJRS grant for their normal hours not worked. When claiming the CJRS grant for furloughed hours employers will need to report and claim for a minimum period of a week.

This will run for three months from August through to the end of October. Employers will be asked to pay a percentage towards the salaries of their furloughed staff. The employer payments will substitute the contribution the government is currently making, ensuring that staff continue to receive 80% of their salary, up to £2,500 a month. More specific details and information around its implementation will be made available by the end of May.

The scheme is designed to help employers whose operations have been severely affected by coronavirus (COVID-19) to retain their employees and protect the UK economy. However, all employers are eligible to claim under the scheme and the government recognises different businesses will face different impacts from coronavirus.

The scheme closed to new entrants from 30 June. From this point onwards, employers will only be able to furlough employees that they have furloughed for a full 3 week period prior to 30 June.

This means that the final date by which an employer can furlough an employee for the first time was 10 June, in order for the current 3 week furlough period to be completed by 30 June. Employers will have until 31 July to make any claims in respect of the period to 30 June.

The Government has confirmed that there will be an exemption to the 30 June cut-off. Parents on statutory maternity and paternity leave who return to work in the coming months after a long period of absence will be permitted to be furloughed. This will only apply where they work for an employer who has previously furloughed employees.

The first time you will be able to make claims for days in July will be 1 July, you cannot claim for periods in July before this point.

31 July is the last day that you can submit claims for periods ending on or before 30 June.

Check if you can claim for your employees' wages through the Coronavirus Job Retention Scheme

If you cannot maintain your workforce because your operations have been affected by coronavirus (COVID-19), you can furlough employees and apply for a grant to cover a portion of their usual monthly wage costs where you record them as being on furlough.

From 1 July, employers can bring furloughed employees back to work for any amount of time and any work pattern, while still being able to claim the grant for the hours not worked. From this date, only employees that you have successfully claimed a previous grant for will be eligible for more grants under the scheme. This means they must have previously been furloughed for at least 3 consecutive weeks taking place any time between 1 March and 30 June 2020. For the minimum 3 consecutive week period to be completed by 30 June, the last day an employee could have started furlough for the first time was 10 June. This may differ if you have an employee returning from statutory parental leave.

From 1 August 2020, you will be asked to contribute towards the cost of your furloughed employees’ wages. Find out more information on how the Coronavirus Job Retention Scheme is changing.

Who can claim

You can claim for any employees you have furloughed if you have:

For employees that meet the criteria above, the number of you claim for in any single claim period starting from 1 July cannot exceed the maximum number of employees you claimed for under any claim ending by 30 June.

For example, an employer had previously submitted three claims between 1 March 2020 and 30 June, in which the total number employees furloughed in each respective claim was 30, 20 and 50 employees. Then the maximum number of employees that employer could furlough in any single claim starting on or after 1 July would be 50.

There are some exceptions explained in this guidance for employees returning from parental leave where this cap may not apply.

If you receive public funding

If you have staff costs that are publicly funded (even if you’re not in the public sector), you should use that money to continue paying your staff, and not furlough your staff.

Organisations can use the scheme if they are not fully funded by public grants and they should contact their sponsor department or respective administration for further guidance.

If you’re an administrator

Where a company is being taken under the management of an administrator, the administrator can furlough and claim for employees who have been furloughed for at least 3 consecutive weeks taking place any time between 1 March 2020 and 30 June by their previous employer.

Administrators should only use the scheme if there is a reasonable likelihood of rehiring the workers. For instance, this could be as a result of an administration and pursuit of a sale of the business.

Employees you can claim for

You can claim for employees on any type of employment contract, including full-time, part-time, agency, flexible or zero-hour contracts. Foreign nationals are eligible to be furloughed. Grants under the scheme are not counted as ‘access to public funds’, and you can furlough employees on all categories of visa.

You can only claim for furloughed employees that were employed on 19 March 2020 and who were on your PAYE payroll on or before 19 March 2020. This means a Real Time Information (RTI) submission notifying payment in respect of that employee to HMRC must have been made on or before 19 March 2020. If you had employees that were employed on 28 February 2020 but not on 19 March 2020, please see the section below on employees who were made redundant or stopped working for you after 28 February 2020.

Was the employee employed with you as of this date?Date RTI submission notifying payment was made to HMRCEligible for CJRS?
28 February 2020On or before 28 February 2020Yes
28 February 2020On or before 19 March 2020Yes
28 February 2020On or after 20 March 2020No
19 March 2020On or before 19 March 2020Yes
19 March 2020On or after 20 March 2020No
On or after 20 March 2020On or after 20 March 2020No

From 1 July, only employees that you have successfully claimed a previous Coronavirus Job Retention Scheme grant for will be eligible for further grants under the scheme. This means they must have previously been furloughed for at least 3 consecutive weeks taking place any time between 1 March 2020 and 30 June. The last day an employee could have started furlough for the first time was 10 June.

Employers will have until 31 July to make any claims for claim periods up to 30 June.

The number of employees you can claim for in any claim period starting from 1 July 2020 cannot exceed the maximum number of employees you claimed for under any claim ending by 30 June 2020. This may differ where you have an employee returning from statutory parental leave.

If you made employees redundant or they stopped working for you on or after 28 February

If you made employees redundant, or they stopped working for you on or after 28 February 2020, you would have been eligible to re-employ them and put them on furlough as long as you did this by 10 June. You can claim for their wages from the date on which you furloughed them, even if you did not re-employ them until after 19 March 2020.

This applies as long as the employee was on your PAYE payroll as at 28 February 2020, which means an RTI submission notifying payment in respect of that employee to HMRC must have been made on or before 28 February 2020.

From 1 July an employee is eligible to be claimed for under the scheme, if you have previously submitted a claim for them in relation to a furlough period of at least 3 consecutive weeks taking place any time between 1 March 2020 and 30 June.

If your employee stopped working for you and was on a fixed term contract, you should also refer to the section ‘If your employee is on a fixed term contract’ below.

If you made employees redundant or they stopped working for you on or after 19 March 2020

If you made employees redundant, or they stopped working for you on or after 19 March 2020, you would have been eligible to re-employ them and put them on furlough as long as you did this by 10 June. You can claim for their wages through the scheme from the date on which you furloughed them.

This applies as long as the employee was on your PAYE payroll on or before 19 March 2020. This means an RTI submission notifying payment in respect of that employee to HMRC must have been made on or before 19 March 2020.

From 1 July an employee is eligible to be claimed for under the scheme, if you have previously submitted a claim for them in relation to a furlough period of at least 3 consecutive weeks taking place any time between 1 March 2020 and 30 June.

If your employee stopped working for you and was on a fixed term contract, you should also refer to the section ‘If your employee is on a fixed term contract’ below.

If your employee is on a fixed term contract

For an employee on a fixed term contract, you would have been able to re-employ them and put them on furlough as long as you did this by 10 June, and if either:

If the employee’s fixed term contract has not already expired, it can be extended, or renewed. You can claim for them as long as an RTI payment submission for the employee was notified to HMRC on or before 19 March 2020.

From 1 July an employee is eligible to be claimed for under the scheme, if you have previously submitted a claim for them in relation to a furlough period of at least 3 consecutive weeks taking place any time between 1 March 2020 and 30 June.

Employees that started and ended the same contract between 28 February 2020 and 19 March 2020 will not qualify for this scheme. This is not specific to employees on fixed-term contracts, the same would apply to employees on all other contracts.

If your employee had multiple employers over the last year

If an employee has had multiple employers over the past year, has only worked for one of them at any one time, and is being furloughed by their current employer, their former employer/s should not re-employ them, put them on furlough and claim for their wages through the scheme.

If your employees are working reduced hours

For claim periods up to 30 June if an employee is working, but on reduced hours, or for reduced pay, they will not be eligible for this scheme.

For claim periods starting after 1 July, employers can bring furloughed employees back to work for any amount of time and any shift pattern, while still being able to claim Coronavirus Job Retention Scheme grant for the hours not worked. This only applies where you have previously submitted a claim for the employee in relation to a furlough period of at least 3 consecutive weeks taking place any time between 1 March 2020 and 30 June.

If your employee has more than one job

If your employee has more than one employer they can be furloughed for each job. Each job is separate, and the cap applies to each employer individually.

Employees can be furloughed in one job and receive a furloughed payment but continue working for another employer and receive their normal wages.

If you employ apprentices

Apprentices can be furloughed in the same way as other employees and they can continue to train whist on furlough.

However, you must pay your Apprentices at least the Apprenticeship Minimum Wage/National Living Wage/National Minimum Wage (AMW/NLW/NMW) as appropriate for all the time they spend training. This means that for time spent training you must cover any shortfall between the amount you can claim for their wages through this scheme and their appropriate minimum wage.

Guidance is available for changes in apprenticeship learning arrangements because of coronavirus (COVID-19) in:

If your employee does volunteer work

A furloughed employee can take part in volunteer work during hours which you record your employee as being on furlough as long as it is for another employer or organisation.

If your employee does training

Furloughed employees can engage in training during hours which you record your employee as being on furlough, as long as in undertaking the training the employee does not provide services to, or generate revenue for, or on behalf of their organisation or a linked or associated organisation. Furloughed employees should be encouraged to undertake training.

Where training is undertaken by furloughed employees during hours which you record your employee as being on furlough, at the request of their employer, they are entitled to be paid at least their appropriate national minimum wage for this time. In most cases, the furlough payment of 80% of an employee’s regular wage, up to the value of £2,500, will provide sufficient monies to cover these training hours. However, where the time spent training attracts a minimum wage entitlement in excess of the furlough payment, employers will need to pay the additional wages (see National Minimum Wage Section for more details).

If your employee has returned from maternity, shared parental, adoption, paternity or parental bereavement leave after 10 June

You can furlough an employee returning from statutory parental leave after 10 June even if you are furloughing them for the first time. You may do this provided that:

When calculating the maximum number of employees you can claim for, the number of employees you are furloughing for the first time due to them returning from parental leave should be added to any previous maximum. This means the maximum number of employees you can claim for in these circumstances, is the maximum you claimed for in any one claim before 30 June, plus any employees that you are furloughing for the first time due to them returning from parental leave.

This means the maximum number of employees you can claim for in these circumstances, is the maximum you claimed for in any one claim before 30 June, plus any employees that you are furloughing for the first time due to them returning from parental leave.

Information is also available on what you can claim if your employee is still on maternity leave, adoption leave, paternity leave, shared parental leave or parental bereavement leave.

Furloughed employees working as union or non-union representatives or as pension trustees

During hours which you record your employee as being on furlough, employees who are union or non-union representatives may undertake duties and activities for the purpose of individual or collective representation of employees or other workers. However in doing this, they must not provide services to or generate revenue for, or on behalf of your organisation or a linked or associated organisation.

During hours which you record your employee as being on furlough, employees who are pension scheme trustees or trustee directors of a corporate trustee may undertake trustee duties in relation to the pension scheme. However, a professional, independent pension scheme trustee who has been furloughed by the independent trustee company cannot undertake trustee work that would provide services to or generate revenue for, or on behalf of, the independent trustee company or any organisation linked or associated with that independent trustee company during hours which you record them as being on furlough.

If your employee’s health has been affected by coronavirus (COVID-19) or any other conditions

If your employee is shielding

Employees who are unable to work because they are shielding in line with public health guidance (or need to stay home with someone who is shielding) can be furloughed. Such an employee can continue to be furloughed from 1 July so long as you have previously submitted a claim for them in relation to a furlough period of at least 3 consecutive weeks taking place any time between 1 March 2020 and 30 June.

If your employee has caring responsibilities

Employees who are unable to work because they have caring responsibilities resulting from coronavirus (COVID-19) can be furloughed. For example, employees that need to look after children can be furloughed. Such an employee can continue to be furloughed from 1 July so long as you have previously submitted a claim for them in relation to a furlough period of at least 3 consecutive weeks taking place any time between 1 March 2020 and 30 June.

If your employee becomes sick while furloughed

Furloughed employees retain their statutory rights, including their right to Statutory Sick Pay. This means that furloughed employees who become ill, due to Coronavirus or any other cause, must be paid at least Statutory Sick Pay. Subject to eligibility this includes those self-isolating or shielding because of Coronavirus. It is up to employers to decide whether to move these employees onto Statutory Sick Pay or to keep them on furlough, at their furloughed rate.

If a furloughed employee who becomes sick is moved onto SSP, employers can no longer claim for the furloughed salary. Employers are required to pay SSP themselves, although may qualify for a rebate for up to 2 weeks of SSP if the sickness is related to coronavirus.

If employers keep the sick furloughed employee on the furloughed rate for the period that they are sick, they remain eligible to claim for these costs through the furloughed scheme. Such an employee can continue to be furloughed from 1 July so long as you have previously submitted a claim for them in relation to a furlough period of at least 3 consecutive weeks taking place any time between 1 March 2020 and 30 June.

If your employee is on leave

If your employee is on unpaid leave

If an employee started unpaid leave after 28 February 2020, you would have been eligible to put them on furlough instead as long as you did this by 10 June for a minimum period of at least 3 consecutive weeks taking place any time between 1 March 2020 and 30 June. If you put them on furlough then you should pay them at least 80% of their regular wages for hours which you record them as being on furlough, up to the monthly cap of £2500.

If an employee went on unpaid leave on or before 28 February, you cannot furlough them until the date on which it was agreed they would return from unpaid leave. The final date by which an employer could furlough an employee for the first time was 10 June.

If your employee is self-isolating or on sick leave

If your employee is on sick leave or self-isolating as a result of Coronavirus, they’ll be able to get Statutory Sick Pay, subject to other eligibility conditions applying. The Coronavirus Job Retention Scheme is not intended for short-term absences from work due to sickness.

Short term illness/self-isolation should not be a consideration in deciding whether to furlough an employee. If, however, employers want to furlough employees for business reasons and they are currently off sick, they are eligible to do so, as with other employees. In these cases, the employee should no longer receive sick pay and would be classified as a furloughed employee. Such an employee can continue to be furloughed from 1 July so long as you have previously submitted a claim for them in relation to a furlough period of at least 3 consecutive weeks taking place any time between 1 March 2020 and 30 June.

Employers are also entitled to furlough employees who are being shielded or off on long-term sick leave. It is up to employers to decide whether to furlough these employees. Such an employee can continue to be furloughed from 1 July so long as you have previously submitted a claim for them in relation to a furlough period of at least 3 consecutive weeks taking place any time between 1 March 2020 and 30 June.

You can claim back from both the Coronavirus Job Retention Scheme and the SSP rebate scheme for the same employee but not for the same period of time. When an employee is on furlough, you can only reclaim expenditure through the Coronavirus Job Retention Scheme, and not the SSP rebate scheme. If a non-furloughed employee becomes ill due to coronavirus, needs to self-isolate or be shielded, then you might qualify for the SSP rebate scheme, enabling you to claim up to two weeks of SSP per employee.

If your employee is on maternity leave, adoption leave, paternity leave, shared parental leave or parental bereavement leave

The normal rules for maternity and other forms of parental leave and pay apply.

Although, you may need to calculate your employee’s average weekly earnings differently, if your employee was furloughed and then started leave on or after 25 April 2020 for:

You can claim through the scheme for enhanced (earnings related) contractual pay for employees who qualify for either:

If your employee gets Maternity Allowance

If your employee is getting Maternity Allowance while they’re on maternity leave, they should not get furlough pay at the same time.

If your employee has agreed to be put on furlough, tell them to contact Jobcentre Plus to stop their Maternity Allowance payments.

If your employee agrees to be put on furlough and end their maternity leave early, they will need to give you at least 8 weeks’ notice and they will not be eligible for furlough pay until the end of the 8 weeks.

Individuals you can claim for who are not employees

As well as employees, the grant can be claimed for any of the following groups, if they are paid via PAYE: office holders (including company directors), salaried members of Limited Liability Partnerships (LLPs), agency workers (including those employed by umbrella companies), and limb (b) workers.

The guidance below sets out specific considerations for those individuals who are paid via PAYE, but who are not necessarily employees in employment law. Such individuals can continue to be furloughed from 1 July so long as you have previously submitted a claim for them in relation to a furlough period of at least 3 consecutive weeks taking place any time between 1 March 2020 and 30 June.

Office holders

Office holders can be furloughed and receive support through this scheme. The furlough, and any ongoing payment during furlough, will need to be agreed between the office holder and the party who operates PAYE on the income they receive for holding their office. Where the office holder is a company director or member of a Limited Liability Partnership (LLP), the furlough arrangements should be adopted formally as a decision of the company or LLP.

Company directors

As office holders, salaried company directors are eligible to be furloughed and receive support through this scheme. Company directors owe duties to their company which are set out in the Companies Act 2006. Where a company (acting through its board of directors) considers that it is in compliance with the statutory duties of one or more of its individual salaried directors, the board can decide that such directors should be furloughed. Where one or more individual directors’ furlough is so decided by the board, this should be formally adopted as a decision of the company, noted in the company records and communicated in writing to the director(s) concerned.

Where furloughed directors need to carry out particular duties to fulfil the statutory obligations they owe to their company during hours which they are recorded as being on furlough, they may do so provided they do no more than would reasonably be judged necessary for that purpose, i.e. they should not do work of a kind they would carry out in normal circumstances to generate commercial revenue or provides services to or on behalf of their company.

This also applies to salaried individuals who are directors of their own personal service company (PSC).

Company directors with an annual pay period

Those paid annually are eligible to claim, as long as they meet the relevant conditions. This includes being notified to HMRC on an RTI submission on or before 19 March 2020, which relates to a payment of earnings in the 19/20 tax year. The requirement for there to be payment of earnings in the 19/20 tax year applies for any employee being claimed for under the scheme, irrespective of how frequently they are paid (e.g. weekly, fortnightly or monthly). This will be relevant for those on an annual pay period if the last payment notified to RTI was before 5 April 2019 and no further payments were notified until after 19 March 2020.

An employer can make their claim in anticipation of an imminent payroll run, at the point they run their payroll or after they have run their payroll.

Salaried members of Limited Liability Partnerships (LLPs)

Members of LLPs who are designated as employees for tax purposes (‘salaried members’) under the Income Tax (Trading and Other Income) Act (ITTOIA) 2005 are eligible to be furloughed and receive support through this scheme.

The rights and duties of a member of an LLP are set out in an LLP agreement and in the absence of an agreement, default provisions in the LLP Act 2000, based upon company and partnership law. Such an agreement may include separate agreement between the LLP and an individual member setting out the terms applicable to that member’s relationship with the LLP.

To furlough a member, the terms of the LLP agreement (or any such agreement between the LLP and the member) may need to be varied by a formal decision of the LLP, for example to reflect the fact that the member will perform no work in the LLP for the period of furlough, and the effect of this on their remuneration from the LLP. For an LLP member who is treated as being employed by the LLP (in accordance with s863A of ITTOIA 2005), the reference salary for this scheme is the LLP member’s profit allocation, excluding any amounts which are determined by the LLP member’s performance, or the overall performance of the LLP.

Agency Workers (including those employed by umbrella companies)

Where agency workers are paid through PAYE, they are eligible to be furloughed and receive support through this scheme, including where they are employed by umbrella companies.

Furlough should be agreed between the agency, as the deemed employer, and the worker, though it would be advised to discuss the need to furlough with any end clients involved. As with employees, agency workers should perform no work for, through or on behalf of the agency that has furloughed them during hours which you record them as being on furlough, including performing such work through or on behalf of the agency for the agency’s clients.

Where an agency supplies clients with workers who are employed by an umbrella company that operates the PAYE, it will be for the umbrella company and the worker to agree whether to furlough the worker or not.

Limb (b) Workers

Where Limb (b) Workers are paid through PAYE, they can be furloughed and receive support through this scheme.

Those who pay tax on their trading profits through Income Tax Self-Assessment, may instead be eligible for the Self-Employed Income Support Scheme (SEISS), announced by the Chancellor on 26 March 2020.

Read more information on the Self-Employed Income Support Scheme, including eligibility criteria and how to claim.

Contingent workers in the public sector

The Cabinet Office has issued guidance on how payments to suppliers of contingent workers impacted by COVID-19 should be dealt with where the party receiving the contingent worker’s services is a Central Government Department, an Executive Agency of a Central Government Department or a Non-Departmental Public Body.

Read more information on contingent workers impacted by COVID-19. This guidance applies to agency workers paid through PAYE, as well as those paid through umbrella companies on PAYE and off-payroll workers supplying their services through a Personal Service Company (PSC).

Contractors with public sector engagements in scope of IR35 off-payroll working rules (IR35)

Public sector bodies will follow the Crown Commercial Services guidance in the vast majority of cases. In a small number of cases, for example where organisations are not primarily funded by the government and whose staff cannot be redeployed to assist with the coronavirus response, it may be appropriate to claim under the CJRS. Contractors who are deemed employees according to the off-payroll working rules might be eligible for this scheme.

In this scenario, if the public sector organisation wished to furlough a contractor, they would have to confirm this with both the contractor’s Personal Service Company (PSC) and the fee-payer (as set out in the off-payroll working rules, usually the agency paying the contractor’s PSC). It should be formally agreed between these parties that the contractor is to do no work for the public sector organisation during their period of furlough. The fee-payer would be able to apply for the furlough payment of 80% of the monthly contract value, up to a maximum of £2,500, as well as the employer NICs on that subsidised wage. The fee-payer would then pay at least the amount of wage-grant received to the PSC, and report the payment via PAYE using the contractor’s details, making the usual tax and National Insurance contributions (NICs) deductions for contracts in scope of the off-payroll rules. The PSC would then be required to report the amount it pays to the contractor as deemed employment income via PAYE using box 58A on the PAYE Real Time Information return.

Where a contractor is continuing to receive payments from a public sector client (including through the CJRS or other any other scheme), income from this client should be excluded from any calculation of the reference pay for the purposes of the CJRS if the contractor also decides to furlough themselves as an employee or director of their own company.

If you’ve consolidated your payroll and have new employees on it

Where a group of companies have multiple PAYE schemes and there is a transfer of all employees from these schemes into a new consolidated PAYE scheme after 28 February 2020, the new scheme will be eligible to furlough those employees and claim the grants available under the CJRS. In order to claim in these circumstances, the new employer needs to have previously submitted a claim for them in relation to a furlough period of at least 3 consecutive weeks taking place any time between 1 March 2020 and 30 June.

In addition, where a group of companies have multiple PAYE schemes and there is a transfer of all employees from these schemes into a new consolidated PAYE scheme after 10 June 2020, the new scheme will be eligible to continue to furlough and claim for employees that have previously had a claim submitted for them in relation to a furlough period of at least 3 consecutive weeks taking place any time between 1 March 2020 and 30 June.

In these circumstances the maximum number of employees that an employer can claim for under the consolidated scheme will be the total of the maximum numbers of employees under a single claim in each scheme that is being consolidated.

Employee transfers under TUPE and on a change in ownership

A new employer is eligible to claim under the CJRS in respect of the employees of a previous business transferred after 28 February 2020 if either the TUPE or PAYE business succession rules apply to the change in ownership. A new employer is also eligible to claim under CJRS in respect of the employees associated with a transfer of a business after 28 February 2020 from the liquidator of a company in compulsory liquidation where TUPE would have applied were it not for the company being in compulsory liquidation. In order to claim in these circumstances, the new employer needs to have previously submitted a claim for the employees in relation to a furlough period of at least 3 consecutive weeks taking place any time between 1 March 2020 and 30 June.

A new employer is also eligible to claim under the CJRS in respect of the employees of a previous business transferred after 10 June 2020 as long as:

In these circumstances, the maximum number of employees that the new employer can claim for will be the total of both:

A new employer is also eligible to claim under CJRS in respect of the employees associated with a transfer of a business after 10 June 2020 from the liquidator of a company in compulsory liquidation where:

In these circumstances, the maximum number of employees that the new employer can claim for will be the total of both:

Agreeing to furlough employees

Employers should discuss with their staff and make any changes to the employment contract by agreement. When employers are making decisions in relation to the process, including deciding who to offer furlough to, equality and discrimination laws will apply in the usual way.

To be eligible for the grant, employers must have confirmed to their employee (or reached collective agreement with a trade union) in writing that they have been furloughed. You must:

The employee does not have to provide a written response and you do not need to place all your employees on furlough.

Prior to 1 July 2020, employees on furlough cannot undertake any work for you other than training. From 1 July, you will be able to:

If you flexibly furlough employees, you’ll need to agree this with the employee (or reach collective agreement with a trade union) and keep a new written agreement that confirms the new furlough arrangement. You’ll need to:

You do not need to place all your employees on furlough and you can continue to fully furlough employees if you wish. Employees cannot undertake any work for you during time that you record as them being on furlough.

Using minimum furlough periods

Until 1 July, any employees you place on furlough must be furloughed for a minimum of 3 consecutive weeks. When they return to work, they must be taken off furlough. Employees can be furloughed more than once, but they must be furloughed for a minimum of 3 consecutive weeks each time they are furloughed.

From 1 July, agreed flexible furlough agreements can last any amount of time. Employees can enter into a flexible furlough agreement more than once.

Where a previously furloughed employee starts a new furlough period before 1 July this furlough period must be for a minimum of 3 consecutive weeks. This is the case regardless of whether the 3 consecutive week minimum period ends before or after 1 July.

For example, a previously furloughed employee can start a new furlough period on 22 June which would have to continue for at least 3 consecutive weeks ending on or after 12 July. After this the employee can they can then be flexibly furloughed for any period. However, after 1 July, employers cannot make claims that cross calendar months, so the employer will need to make a seperate claim for the period up to 30 June.

Although flexible furlough agreements can last any amount of time, unless otherwise specified the period that you claim for must be for a minimum claim period of 7 calendar days.

When your employees are on furlough

During hours which you record your employee as being on furlough, you cannot ask your employer to do any work for you that:

Your employee can:

Paying employee taxes and pension contributions

Your employees will still pay the taxes they normally pay out of their wages. This should be done through PAYE using the normal rules.

This includes pension contributions (both employer contributions and automatic contributions from the employee), unless the employee has opted out or stopped saving into their pension. Until 31 July you can continue to claim for these costs for the hours the employee is on furlough. From 1 August employers will be required to pay all employer NICs and pension contributions.

Keeping employee rights

Employees still have the same rights at work, including:

Grants cannot be used to substitute redundancy payments. HMRC will continue to monitor businesses after the scheme has closed.

Holiday pay

Furloughed employees continue to accrue leave as per their employment contract. The employer and employee can agree to vary holiday entitlement as part of the furlough agreement, however almost all workers are entitled to 5.6 weeks of statutory paid annual leave each year which they cannot go below. Employees can take holiday whilst on furlough. Working Time Regulations require holiday pay to be paid at the employee’s normal rate of pay or, where the rate of pay varies, calculated on the basis of the average pay received by the employee in the previous 52 working weeks. Therefore, if a furloughed employee takes holiday, the employer should pay their usual holiday pay in accordance with the Working Time Regulations. Employers will be obliged to pay employees who are on holiday additional amounts over the grant, though will have the flexibility to restrict when leave can be taken if there is a business need and the correct notice is given. This applies for both the furlough period and the recovery period. If an employee usually works bank holidays then the employer can agree that this is included in the grant payment. If the employee usually takes the bank holiday as leave then the employer would either have to top up their usual holiday pay, or give the employee a day of holiday in lieu. Find out more information on holiday pay during furlough.

Employees working for a different employer

If contractually allowed, your employees are permitted to work for another employer whilst you have placed them on furlough.

For any employer that takes on a new employee, the new employer should ensure they complete the starter checklist form correctly. If the employee is furloughed from another employment, they should complete Statement C.

Deciding the length of your claim period

Before you can calculate how much you can claim from the Coronavirus Job Retention Scheme you’ll need to work out your employees’ wages. To do this you must work out:

Your claim period is made up of the days you are claiming a grant for. The start date of your first claim period is the date your first employee was furloughed. You can backdate your claim to 1 March 2020 where employees have already been furloughed from that date.

There is no maximum length for claim periods that end on or before 30 June. However, claims for any periods starting before 1 July must end on or before 30 June. This is the case even where an employee furloughed in June continues to be furloughed full time in July. Separate claims will need to be submitted to cover the days in June and the days in July that you want to claim for, even if employees are furloughed continuously. This may mean that your claim periods will differ from the pay periods you use.

Claims for periods ending on or before 30 June 2020 must be made by 31 July 2020.

Claim periods starting on or after 1 July must start and end within the same calendar month and must last at least 7 days unless you’re claiming for the first few days or the last few days in a month. You can only claim for a period of fewer than 7 days if the period you are claiming for includes either the first or last day of the calendar month, and you have already claimed for the period ending immediately before it.

You should match your claim period to the dates you process your payroll, if you can. You can only make one claim for any period so you must include all your furloughed or flexibly furloughed employees in one claim even if you pay them at different times. If you make more than one claim, your subsequent claim cannot overlap with any other claim that you make. Where employees have been furloughed or flexibly furloughed continuously (or both), the claim periods must follow on from each other with no gaps in between the dates.

You can claim before, during or after you process your payroll; you can usually make your claim up to 14 days before your claim period end date and do not have to wait until the end of a claim period to make your next claim. Claims for periods after 30 June can be made from 1 July.

When claiming for employees who are flexibly furloughed you should not claim until you are sure of the exact number of hours they will have worked during the claim period. This means that you should claim when you have certainty about the number of hours your employees are working during the claim period. If you claim in advance and your employee works for more hours than you have told us about, then you will have to pay some of the grant back to HMRC. If you make an error in your claim, you can find out how to correct it.

Payments will be made 6 working days after you make your claim.

If the pay period you are claiming for includes days in more than one month

From 1 July, the scheme rules will change each month. This means that claim periods starting on or after 1 July must start and end within the same calendar month.

If your pay period includes days in more than one month, you’ll need to submit separate claims covering the days that fall into each month. You should calculate each of those claims separately. Claim periods cannot overlap, so you will need to make sure you include all of the employees you want to claim for in each claim you make.

Find an example of a pay period spanning June and July.

Find an example of a pay period spanning July and August.

What to include when calculating wages

The amount you should use when calculating 80% of your employees’ wages for hours not worked, is made up of the regular payments you are obliged to make, including:

You cannot include the following when calculating wages:

The entirety of the grant received to cover an employee’s subsidised furlough pay must be paid to them in the form of money. No part of the grant should be netted off to pay for the provision of benefits or a salary sacrifice scheme.

Where the employer provides benefits to furloughed employees, including through a salary sacrifice scheme, these benefits should be in addition to the wages that must be paid under the terms of the Job Retention Scheme.

Normally, an employee cannot switch freely out of most salary sacrifice schemes unless there is a life event. HMRC agrees that COVID-19 counts as a life event that could warrant changes to salary sacrifice arrangements, if the relevant employment contract is updated accordingly.

Non-discretionary payments

When you’re working out if a payment is non-discretionary, only include payments which you have a contractual obligation to pay and to which your employee has an enforceable right.

When variable payments are specified in a contract and those payments are always made, then those payments may become non-discretionary. If that is the case, they should be included when calculating 80% of your employees’ wages.

Non-discretionary overtime payments

If your employee has been paid variable payments due to working overtime, you can include these payments when calculating 80% of their wages as long as the overtime payments were non-discretionary.

Payments for overtime worked are non-discretionary when you are contractually obliged to pay the employee at a set and defined rate for the overtime that they have worked.

Apprenticeship Levy and Student Loans

You should continue to pay the Apprenticeship Levy as usual. Grants from the Job Retention Scheme do not cover the Apprenticeship Levy.

You should also continue to make Student Loan deductions from the wages you pay to employees.

National Minimum Wage

Individuals are entitled to the National Living Wage, National Minimum Wage or Apprentices Minimum Wage for the hours they are working or treated as working under minimum wage rules.

At least minimum wage rates must be paid for all hours worked. Furloughed workers who are not working can be paid the lower of 80% of their wages or £2,500 even if, based on their usual working hours, this would be below their appropriate minimum wage.

However, time spent training whilst furloughed is treated as working time for the purposes of the minimum wage calculations and must be paid at the appropriate minimum wage rate. As such, employers will need to ensure that the wages and furlough payment provide sufficient monies to cover all working time including these training hours. Where the pay is less than the appropriate minimum wage entitlement, the employer will need to pay additional amounts to ensure at least the appropriate minimum wage is paid for both working time and 100% of the training time whilst furloughed.

Where a furloughed worker is paid close to minimum wage levels and asked to complete training courses for a substantial majority of their usual working time, employers are recommended to seek independent advice or contact Acas.

If you’re claiming for a member of a Limited Liability Partnership (LLP)

If a member of an LLP is treated as an employee (because of salaried members rules), you must only include payments that are either:

Holiday Pay

Furloughed employees continue to accrue leave as per their employment contract.

The employer and employee can agree to vary holiday entitlement as part of the furlough agreement, however almost all workers are entitled to 5.6 weeks of statutory paid annual leave each year which they cannot go below.

Employees can take holiday whilst on furlough. Working Time Regulations require holiday pay to be paid at the employee’s normal rate of pay or, where the rate of pay varies, calculated on the basis of the average pay received by the employee in the previous 52 working weeks. Therefore, if a furloughed employee takes holiday, the employer should pay their usual holiday pay in accordance with the Working Time Regulations.

Employers will be obliged to pay additional amounts over the grant, though will have the flexibility to restrict when leave can be taken if there is a business need. This applies for both the furlough period and the recovery period.

If an employee usually works bank holidays then the employer can agree that this is included in the grant payment. If the employee usually takes the bank holiday as leave then the employer would either have to top up their usual holiday pay, or give the employee a day of holiday in lieu.

During this unprecedented time, HMRC are keeping the policy on holiday pay during furlough under review. Read further guidance on holiday pay during furlough.

Employees returning from family-related statutory leave

Family-related statutory leave includes maternity leave, paternity leave, shared parental leave, adoption leave, parental bereavement leave and unpaid parental leave.

For employees on fixed pay, claims for full or part time employees furloughed on return from family-related statutory leave should be calculated against their salary, before tax, not the pay they received whilst on family-related statutory leave. The same principles apply where the employee is returning from a period of unpaid statutory family-related leave.

Claims for those on variable pay, returning from statutory leave should be calculated using the higher of either:

Employees returning to work after being on sick pay

For employees on fixed pay, claims for full or part time employees furloughed on return to work after time off sick should be calculated against their salary, before tax, not the pay they received whilst off sick.

Claims for those on variable pay, returning to work after time off sick should be calculated using the highest of either:

Unpaid sabbatical or unpaid leave

If your employee has been on unpaid sabbatical or unpaid leave, you’ll need to use the amount they would have been paid if they were on paid leave when calculating 80% of their wages.

Work out your employee’s usual hours and furloughed hours

If your employee is fully furloughed, you do not need to work out their usual and furloughed hours and you should work out the maximum wage amount. An employee is fully furloughed if they do not do any work for you during the claim period.

If your employee is flexibly furloughed, you’ll need to work out your employee’s usual hours and record the actual hours they work as well as their furloughed hours for each claim period.

There are two different calculations you can use to work out your employee’s usual hours, depending on whether they work fixed or variable hours.

You should work out work out usual hours for employees who work variable hours, if either:

If neither of these apply, you should work out your employee’s usual hours for an employee who is contracted for a fixed number of hours.

The employee’s working pattern does not have to match their pay period (for example, an employee could be contracted to 40 hours a week, but be paid monthly).

Work out your employee’s usual hours for an employee who is contracted for a fixed number of hours and whose pay does not vary according to the number of hours they work

You need to calculate the usual hours for each pay period, or part of a pay period, that falls within the claim period.

To calculate the number of usual hours for each pay period (or partial pay period):

  1. Start with the hours your employee was contracted for at the end of the last pay period ending on or before 19 March 2020.
  2. Divide by the number of calendar days in the repeating working pattern, including non-working days.
  3. Multiply by the number of calendar days in the pay period (or partial pay period) you are claiming for.
  4. Round up to the next whole number if the outcome isn’t a whole number.

If an employee with fixed hours was on annual leave, off work sick or on family related statutory leave at any time during the last pay period ending on or before 19 March, the usual hours should be calculated as if the employee had not taken that leave.

Find examples of how to work out usual hours for employees who are contracted for a fixed number of hours.

Work out your employee’s usual hours for an employee who works variable hours
Where the pay varies by the amount of time worked, you will have shown the number of hours worked on your employees’ payslips in line with legislation introduced by BEIS in April 2019 (Employment Rights Act 1996, section 8). You are therefore likely to have records of the number of hours worked.

The ‘usual hours’ in this case will be calculated based on the higher of either:

You need to calculate the usual hours for each pay period, or part of a pay period, that falls within the claim period.

When you calculate the usual hours, you should include:

To work out the usual hours for each pay period (or partial pay period) based on the average number of hours worked in the tax year 2019 to 2020:

  1. Start with the number of hours worked (including paid leave) in the tax year 2019 to 2020 before the employee was furloughed, or the end of the tax year if earlier.
  2. Divide by the number of calendar days the employee was employed by you in the tax year 2019 to 2020, up until the day before they were furloughed, or the end of the tax year if earlier.
  3. Multiply by the number of calendar days in the pay period (or partial pay period) you are claiming for.
  4. Round up to the next whole number if the outcome isn’t a whole number.

Find examples of how to work out the average number of hours worked in the tax year 2019 to 2020 for an employee who works variable hours.

To work out the usual hours for a pay period or partial pay period based on the corresponding calendar period in the tax year 2019 to 2020:

  1. Identify the pay periods in the 2019 to 2020 tax year that correspond to at least one calendar day in the pay period (or partial pay period) you are claiming for.
  2. If the pay period (or partial pay period) you are claiming for starts and ends on the same calendar days as the identified pay period in the 2019 to 2020 tax year - use the number of hours they worked in that pay period.
  3. If the pay period (or partial pay period) you are claiming for does not start and end on the same calendar days as the identified pay periods in the 2019 to 2020 tax year – you’ll need to add together a proportion of the hours worked in each of the pay periods you’ve identified.

Find an example of how to work out the usual hours worked in the same period last year for an employee who works variable hours and the pay period (or partial pay period) being claimed for starts and ends on the same calendar days as the identified pay period.

If you have to work out the usual hours based on the hours worked in more than one pay period in the tax year 2019 to 2020:

  1. Start with the number of hours worked in the first pay period identified in the tax year 2019 to 2020.
  2. Multiply by the number of calendar days in that pay period which correspond to at least one calendar day in the pay period (or partial pay period) you are claiming for.
  3. Divide by the total number of calendar days in the pay period in the tax year 2019 to 2020.
  4. Repeat steps 1, 2 and 3 for each subsequent identified pay period in the tax year 2019 to 2020.
  5. Add them all together.
  6. Round up to the next whole number if the outcome is not a whole number.

Find an example of how to work out the usual hours based on the hours worked in more than one pay period in the tax year 2019 to 2020.

Work out your employee’s usual hours if they are paid per task or piece of work done

You should work out the usual hours for these employees in the same way as for other employees who work variable hours, if possible.

If you do not know what hours the employee worked, you can estimate the hours based on the number of ‘pieces’ they produced and the average rate of work per hour (which you should already have worked out to comply with National Minimum Wage rules).

Calculating the number of working and furloughed hours for each employee

You will have agreed how many hours your flexibly furloughed employee is going to work in the claim period. They will be furloughed for the rest of their usual hours.

To calculate the number of furloughed hours:

  1. Start with your employee’s usual hours.
  2. Subtract the number of hours they actually worked in the claim period – even if this is different to what you agreed.

If you claim in advance and your employee works for more hours than you agreed, then you’ll have to pay some of the grant back to HMRC. This means that you should not claim until you have certainty about the number of hours your employees are working during the claim period. If you make an error in your claim, you can find out how to correct it.

You must pay the employee their contractually agreed rate for any hours they work. Check the latest National Minimum Wage rates.

Find an example for calculating the number of furloughed hours.

Calculate how much you can claim using the Coronavirus Job Retention Scheme

If you furlough employees because you cannot maintain your current workforce, and your operations have been affected by coronavirus (COVID19), you can apply for a grant under the Coronavirus Job Retention Scheme.

Prior to 1 July 2020, employees on furlough cannot undertake any work for you other than training. From 1 July, you will:

From 1 August, the level of the grant will be slowly reduced. No grant will be available for Class 1 employer NICs or pension contributions from 1 August although these contributions will remain payable by the employer.

From September 1, you will also be asked to contribute towards the cost of your furloughed employees’ wages to ensure they continue to receive at least 80% of their wages for the time they’re on furlough. Find out more information on how the amount of grant available through Coronavirus Job Retention Scheme is changing.

You’ll still need to pay employer National Insurance and pension contributions on furloughed employees’ pay. For claims ending before 1 August 2020 you can claim for these costs too.

You cannot claim for:

You can choose to top up your employees’ wages above the minimum furlough pay amount but you do not have to. Employees must not work or provide any services for the business during hours which they are recorded as being on furlough, even if they receive a top-up wage.

Record keeping requirements

You must keep a copy of all records for 6 years, including:

Use the calculator

This calculator can currently be used to work out what you can claim for in a claim ending on or before 30 June. It can be used for most employees who are paid either regular or variable amounts each pay period (for example, weekly or monthly).

The calculator can also be used to work out what you will be able to claim for claim periods starting on or after 1 July and ending on or before 31 July.

The calculator cannot be used if employees:

If you are claiming for an employee who is flexibly furloughed, you will need to work out their usual hours before you use the calculator.

Use HMRC Calculator

If you cannot use this calculator, you’ll need to work out what you can claim manually using the calculation guidance or by seeking professional advice from an accountant or tax adviser.

HMRC will continue to improve their online services on a frequent basis, including supporting more employment situations with this calculator.

It’s your responsibility to check that the amount you’re claiming for is correct.

Work out the maximum wage amount

The maximum wage amount is £2,500 a month, or £576.92 a week.

Before 1 July this was the maximum amount you could claim for wages under the scheme. From 1 July, the calculations are changing, so this isn’t necessarily the amount you can claim, but you still need to work this out to allow you to calculate how much your employee should be paid and the amount of grant you can claim towards their wages. You will also need to work out 80% of your employee’s usual wage.

If the length of time you’re claiming for is not one week or one month, you’ll need to use the daily maximum wage amounts to work out the maximum amount for each employee.

To work out the maximum amount you can claim, multiply the daily maximum wage amount by the number of calendar days your employee is furloughed for in your claim.

MonthDaily maximum wage amount
March 2020£80.65 per day
April 2020£83.34 per day
May 2020£80.65 per day
June 2020£83.34 per day
July 2020£80.65 per day
August 2020£80.65 per day
September 2020£83.34 per day*
October 2020£80.65 per day*

*In September and October, this is the maximum amount you will have to pay a furloughed employee. The amount that you can claim for will be lower.

If your claim period includes dates from two or more calendar months, you’ll need to calculate the maximum amount for each calendar month and add them together. This will only apply to claim periods ending on or before 30 June, as periods from 1 July onward cannot cover more than one calendar month.

If you’re claiming for multiple pay periods in one claim, you can calculate the total maximum using a mixture of:

Find an example of working out the maximum wage amount for part of a pay period.

Work out 80% of your employee’s usual wage

You will need to work out 80% of your employee’s usual wages to determine:

You can use the calculator to help you work out how much you can claim, though there are some cases where this may not be suitable – it is your responsibility to check that the amount you are claiming for is correct.

You will need to identify the number of furlough days in the period. A furlough day means every calendar day within a period where the employee was either:

The way you should work out 80% of your employee’s usual wages is different depending on the way they’re paid. You must check what you can include as wages first.

Choose the calculation you think best fits the way your employee is paid. For example, if you pay your employee a fixed regular salary, use the calculation for fixed pay amounts. HMRC will not decline or seek repayment of any grant based solely on the particular choice of pay calculation, as long as a reasonable choice of approach is made.

Where a claim covers multiple pay periods, this calculation should be done for each and then added together.

Work out 80% of wages for employees on a fixed salary

To work out 80% of your employee’s wage:

  1. Start with your employee’s wages, which is their last pay period before 19 March - if you’re claiming for a full pay period, skip to step 4.
  2. Divide by the total number of days in the pay period.
  3. Multiply by the number of furlough days in the pay period.
  4. Multiply by 80%.

Find an example of working out 80% of wages for fixed rate, full or part time employees on a salary.

Find an example of working out 80% of wages for fixed rate full or part time employee who returns to working their usual hours during the claim period.

If you calculated your claim based on the employee’s wages as of 28 February 2020, and this differs from their wages in their last pay period prior to 19 March 2020, you can choose to still use this calculation for your first claim.

If your employee has not been paid for a full pay period up to 19 March 2020

If your employee has not been paid for a full pay period up to 19 March 2020, you’ll need to work out what their usual wages are and then calculate 80%. To do this:

  1. Start with amount they’ve been paid in their last pay period before 19 March.
  2. Divide by the number of days in that pay period (including non-working days).
  3. Multiply by the total number of days that would have been in a full pay period.
  4. Divide by the total number of days in the pay period you are claiming for.
  5. Multiply by the number of furlough days in the pay period you are claiming for.
  6. Multiply by 80%.

Find an example for working out 80% of your employees wages if they have not been paid for a full pay period up to 19 March 2020.

Employees whose pay varies

You should calculate 80% of the higher of either:

To calculate 80% of the wages from the corresponding calendar period in the tax year 2019 to 2020:

  1. Start with the amount they earned in the same period last year.
  2. Divide by the total number of days in this pay period - including non-working days.
  3. Multiply by the number of furlough days in this pay period.
  4. Multiply by 80%.

If your employee did not work for you in the corresponding calendar period in the tax year 2019 to 2020, you can only use the averaging method to calculate 80% of their wages.

Find an example of claiming for the same period last year.

To work out 80% of the average monthly wages for tax year 2019 to 2020:

  1. Start with the amount they earned in the tax year up to the day before they were furloughed.
  2. Divide it by the number of days from the start of the tax year – including non-working days (up to the day before they were furloughed, or 5 April 2020 – whichever is earlier).
  3. Multiply by the number of furlough days in this pay period.
  4. Multiply by 80%.

Find an example of working out 80% of average monthly wages for the last tax year.

If your employee started working for you on or after 6 April 2019, you should not include the days before their employment started in your calculation.

To work out 80% of your employee’s average earnings for an employee who started working for you on or after 6 April 2019:

  1. Start with the amount they earned in the tax year up to the day before they were furloughed.
  2. Divide it by the number of days they’ve been employed since the start of the tax year – including non-working days (up to the day before they were furloughed or 5 April 2020 – whichever is earlier).
  3. Multiply by the number of furlough days in this pay period.
  4. Multiply by 80%.

Every day after the employee commenced employment with you is counted in making this calculation. This includes non-working days.

Find an example of working out 80% of average wages for the last tax year if employment started after 6 April 2019.

Work out your employee’s minimum furlough pay

The minimum furlough pay is the lesser of either:

If your employee is flexibly furloughed the minimum furlough pay depends on their working and furloughed hours.

  1. Start with the lesser of:
    • 80% of their usual wages
    • the maximum wage amount
  2. Multiply by the employee’s furloughed hours.
  3. Divide by the employee’s usual hours.

This is the minimum amount you must pay your employee for the time they are recorded as being on furlough. You can choose to pay more than this but you do not have to.

If any of the furlough hours are taken as paid holiday or annual leave, you need to top up the pay for these hours to the employee’s full contracted rate.

Find an example of how to calculate minimum furlough pay for an employee who is flexibly furloughed.

Work out how much you can claim for your employee’s furlough pay

For periods ending on or before 31 August 2020 you can claim a grant for the full amount of the minimum furlough pay.

For periods starting on or after 1 September you will need to calculate the grant amount as follows:

  1. Start with the amount of minimum furlough pay.
  2. Divide by 80.
  3. Depending on which month you’re claiming for, multiply by:
    • 70 for September
    • 60 for October

Find an example of how to work out how much of the minimum furlough pay you can claim for.

Work out how much you can claim for employer National Insurance contributions (NICs)

You should calculate and pay Class 1 employer NICs in the normal way.

For periods ending on or before 31 July, you can claim for Class 1 employer NICs you’ve paid on the grant for your employee’s wages.

If you choose to top up your employees’ wages, you cannot claim for employer NICs on the amount you’ve topped them up by.

For periods starting on or after 1 August you will not be able to claim a grant towards the employer Class 1 NICs you’ve paid on the grant for your employees’ wages.

If you’re claiming Employment Allowance

To make sure you do not claim too much from the scheme, you must adjust for the Employment Allowance.

Working out what you can claim for claims ending on or before 30 June 2020

You can use either the direct percentage method or the tables method to calculate employer NICs. The difference between the results will be just a few pence. The examples in this guidance use the direct percentage method.

The amount you can claim is calculated differently depending on whether the employee was furloughed for the whole pay period and whether you topped up your employee’s pay.

The grant you claim should not be more than the employer NICs that you are due to pay. If you have no employer NICs to pay, then you cannot claim for them.

The amount of employer NICs you claim for should not be higher than 13.8% of the grant for that employee’s wages.

If your employee is furloughed for the whole pay period, and you do not top up their pay (claims ending on or before 30 June 2020)

To work out how much you can claim to cover employer NICs:

  1. Start with the grant you’re claiming for employee’s wages.
  2. Deduct the relevant secondary NICs threshold.
  3. Multiply this amount by 13.8%.

If you claim the Employment Allowance, you must make sure you do not claim too much from the scheme.

Tax yearNational Insurance contribution thresholds
2019 to 2020£166 per week, £719 per month or £8,632 per year
2020 to 2021£169 per week, £732 per month or £8,788 per year

Find an example of working out employer NICs for an employee that’s furloughed for a whole pay period with no topped up wages.

If your employee is not furloughed for the whole pay period or you top up their pay (claims ending on or before 30 June 2020)

If your employee is not furloughed for the whole of the pay period, or you top up your employee’s pay over the amounts covered by the grant, then the following steps will help you calculate the amount of employer NICs you can claim for each employee:

  1. Start with the employee’s total pay.
  2. Deduct the relevant secondary NICs threshold.
  3. Multiply by 13.8%.
  4. Divide by the number of calendar days in the pay period.
  5. Multiply by the number of furlough days in the pay period.
  6. Divide by the employee’s total pay for the furlough days in the pay period.
  7. Multiply by the amount of grant for employee wages.

Check that the result of this calculation is not more than the maximum that can be claimed for employer NICs. The following steps will show you how to calculate the maximum employer NICs you can claim for each employee:

  1. Start with the amount of grant for that employee.
  2. Multiply by 13.8%.

You must not claim more than the maximum amount for each employee.

If you claim the Employment Allowance, you must make sure you do not claim too much from the scheme.

Find an example of working out employer NICs for an employee furloughed part way through a pay period and employer does not top up employee’s wages.

Find an example of working out employers NICs for an employee furloughed for part of the pay period and employer tops up employee’s pay.

Working out what you can claim – for claims between 1 July and 31 July 2020

From 1 July 2020, your employees will be able to return to work part-time and be furloughed for the rest of their usual hours. You should calculate the employer NICs that you need to pay in the normal way.

For claim periods between 1 July 2020 and 31 July 2020, you’ll need to work out how much you can claim towards these costs. You should do this calculation separately for each pay period that falls into your claim period. You cannot claim a higher amount than the employer NICs that is due.

Before you calculate the amount you can claim, you will first need to adjust the amount of the relevant secondary NICs threshold.

Tax yearNational Insurance contributions thresholds
2020 to 2021£169 per week, £732 per month or £8,788 per year

To adjust the amount of the relevant secondary NICs threshold:

  1. Start with the relevant secondary NICs threshold that corresponds to the pay period.
  2. Divide by the number of days in the pay period.
  3. Multiply by the number of days in the furlough or flexible furlough claim.

If your employee is flexibly furloughed, you must also:

  1. Divide by the number of usual hours in the flexible furlough claim.
  2. Multiply by the number of furloughed hours in the flexible furlough claim.

Next you will need to use the adjusted secondary NICs threshold to calculate the amount of your grant.

  1. Start with the amount you’re claiming for the employee’s wages.
  2. Deduct the relevant adjusted secondary NICs threshold.
  3. Multiply by 13.8%.

If you claim the Employment Allowance, you must make sure you do not claim too much for Class 1 NICs from the scheme.

Find an example of calculating the grant for employer NICs costs for an employee who is fully furloughed (for claims between 1 July and 31 July 2020).

Find an example of calculating the grant for employer NICs costs for an employee who is flexibly furloughed (for claims from 1 July to 31 July 2020).

Find an example of calculating the grant for employer NICs costs for an employee who is flexibly furloughed where the flexible furlough claim period does not match the employee’s pay period.

Working out what you can claim – for claim periods starting on or after 1 August 2020

From 1 August 2020, you will no longer be able to claim a grant towards the employer NICs that you pay.

Adjusting your claim because of Employment Allowance

You may be eligible to claim the Employment Allowance.

The rules for claiming and applying the Employment Allowance are not different because you are claiming a Job Retention Scheme grant for your Class 1 employer NICs costs. You can claim for a grant towards your Class 1 employer NICs costs in claims up to 31 July 2020.

Eligible employers can use the Employment Allowance to pay less employer NICs, until the allowance runs out or until the end of the tax year, whichever comes first. The Employment Allowance cannot be manually spread out over the tax year if it would otherwise be used up sooner.

When working out how much employer NICs you can claim back from the scheme, you should subtract any Employment Allowance you have used in that pay period.

If you’ve claimed the Employment Allowance and you do not have to pay any employer NICs in a pay period, you should not claim for any employer NICs costs through the scheme.

If the amount of Employment Allowance you can claim will not cover the total employer NICs due, the grant you can claim is the lower of:

Eligible employers can claim the Employment Allowance at any point in the tax year they are claiming for, or for 4 years afterwards. If you have claimed or will claim the grant for employer NICs, you must ensure that you do not receive relief for the same employer NICs costs twice. To do this, you can either:

Employers who delay their Employment Allowance claim and have unused Employment Allowance available at the end of the tax year can use this to reduce other tax costs. Employers who have received a grant for employer NICs costs through the scheme should deduct the amount of grant they have received from the amount of Employment Allowance they have left before they use it, if not doing so would result in receiving relief for the same cost twice. Attempting to get relief for the same costs twice is a fraud and may result in claims being investigated.

If your employee is a company director

There are two methods for calculating a director’s Class 1 NICs.

The method you use may affect how much you can claim under the scheme.

For example, if you use the annual cumulative method, and you don’t have to pay employer NICs for the director by the time you make your claim through the scheme, then you cannot claim a grant towards employer NICs costs.

Work out how much you can claim for employer’s pension contributions

You’ll still need to pay pension contributions on behalf of your furloughed employees. Until 1 August 2020 you can claim for these up to the level of the mandatory employer contribution, even if it’s not an auto-enrolment pension.

You cannot claim for any pension contributions:

You’ll need to work out how much you can claim for employer’s pension contributions.

Calculate your claim for pension contributions – claim periods up to and including 30 June 2020

Grants for pension contributions can be claimed up to this cap provided the employer pays the whole amount claimed to a pension scheme for the employee as an employer contribution.

Find an example of working out pension contributions if an employee is furloughed for the whole pay period and you do not top up their pay (for claim periods up to and including 30 June 2020).

Find an example of working out pension contributions if an employer makes contributions above the minimum level of contributions for an auto-enrolment pension (for claim periods up to and including 30 June 2020).

Find an example of how to calculate the grant towards employer pension contributions where the employee is furloughed during the pay period (for claim periods up to and including 30 June 2020).

Calculate your claim for pension contributions – claim periods from 1 July to 31 July 2020

From 1 July 2020, your employees will be able to return to work part-time and be furloughed for the rest of their usual hours.

For claims between 1 July 2020 and 31 July 2020, you’ll be able to claim towards pension contributions you make on the gross pay grant for the hours they are furloughed. You should do this calculation separately for each pay period that falls into your claim period. You cannot claim for more than you actually contribute to your employee’s pension.

Before you can claim, you will need to adjust the amount of the relevant Lower Level of Qualifying Earnings (LLQE).

Tax yearLower Level of Qualifying Earnings
2020 to 2021£120 per week, £520 per month or £6,240 per year

To adjust the amount of the LLQE:

  1. Start with the relevant LLQE that corresponds to the pay period.
  2. Divide by the number of days in the pay period.
  3. Multiply by the number of days in the furlough or part-time furlough claim.

If your employee is flexibly furloughed you must also:

  1. Divide by the number of usual hours in the flexible furlough claim.
  2. Multiply by the number of furloughed hours in the flexible furlough claim.

Next you will need to use the adjusted LLQE to calculate the amount of your grant.

  1. Start with the amount you’re claiming for the employee’s wages.
  2. Deduct the adjusted LLQE.
  3. Multiply by 3%.

You must not claim more towards pension contributions than you have paid into your employee’s pension.

Find an example of calculating the grant for employer pension contributions for an employee who is fully furloughed (for claims from 1 July 2020 to 31 July 2020).

Find an example of calculating the grant for employer pension contributions for an employee who is flexibly furloughed (for claims from 1 July 2020 to 31 July 2020).

Find an example of calculating the grant for employer pension contributions for an employee who is flexibly furloughed where the flexible furlough claim period does not align with the employee’s pay period (for claims from 1 July 2020 to 31 July 2020).

Calculate your claim for pension contributions – claim periods from 1 August 2020

From 1 August 2020 you will no longer be able to claim towards contributions you make into your employees’ pensions.

How to claim

To make a claim, you will need:

You also need to provide either:

If you’re claiming for employees who are flexibly furloughed, you’ll need to have agreed the furlough arrangement with the employee (or reached a collective agreement with a trade union) and keep a written agreement that confirms the furlough arrangement.

For the claim period you’ll also need:

Using an agent to do PAYE online

If you use an agent who is authorised to do PAYE online for you, they will be able to claim on your behalf.

If you would like to use an agent, but do not have one authorised to do PAYE online for you, you can do that by accessing your HMRC online services and selecting ‘Manage Account’.

You must be enrolled in PAYE online for employers to do this and will need to ask your agent for their agent ID. Your agent can get this from their HMRC online service for agents by selecting ‘authorise client.’

You can also use this service to remove authorisation from your agent if you do not want it to continue after they have submitted your claim(s).

If an agent makes a claim on your behalf you will need to tell them which bank account you would like the grant to be paid into. You must only provide bank details where a BACS payment can be accepted.

If you’re putting 100 or more employees on furlough

If you’re claiming for 100 or more furloughed employees, you’ll need to upload a file containing the following for each employee:

If you’re flexibly furloughing any of these employees, you’ll also need to include:

You’ll need to ensure that you:

For claim periods starting on or after 1 July, you can download a template if you’re claiming for 100 or more employees and upload this when you claim.

How to claim

You’ll need the Government Gateway user ID and password you got when you registered for PAYE online.

If you do not finish your claim in one session, you can save a draft. You must complete your claim within 7 days of starting it.

Online services may be slow during busy times. Check if there are any problems with this service.

Make a claim using HMRC online claim portal

After you’ve claimed

Once you’ve claimed, you’ll get a claim reference number. HMRC will then check that your claim is correct and pay the claim amount by BACs into your bank account within 6 working days.

You must:

You must pay the full amount you are claiming to your employee and pay the associated employee tax and National Insurance Contributions, even if your company is in administration. If you’re not able to do that, you’ll need to repay the money back to HMRC. The same applies in relation to employer NICs and pension contributions you claim regarding your employee. The full amount you claim in respect of these must be paid or you will need to repay the money back to HMRC.

Employers cannot enter into any transaction with the worker which reduces the wages below the amount claimed. This includes any administration charge, fees or other costs in connection with the employment. Where an employee had authorised their employer to make deductions from their salary, these deductions can continue while the employee is furloughed provided that these deductions are not administration charges, fees or other costs in connection with the employment.

If you make an error when claiming

If you have made an error in a claim that has resulted in an overclaimed amount, you must pay this back to HMRC.

You can now tell us about an overclaimed amount as part of your next claim. You will be asked when making your claim whether you need to adjust the amount down to take account of a previous error. Your new claim amount will be reduced to reflect this. You do not need to take further action but should keep a record of this adjustment for six years.

If you have made an error that has resulted in an underclaimed amount, you should contact HMRC to amend your claim. As you are increasing the amount of your claim, HMRC need to conduct additional checks.

If you have made an error in a claim and do not plan to submit further claims, HMRC are working on a process that will allow you to let us know about your error and pay back any amounts that you have overclaimed. HMRC will update guidance when this is available.

When the government ends the scheme

When the scheme closes on October 31, you must decide, depending on your circumstances, as to whether employees can return to their normal hours. If not, it may be necessary to consider reducing their hours, or a termination of employment (redundancy). Normal redundancy rules apply to furloughed employees.

Tax Treatment of the Coronavirus Job Retention Grant

Payments received by a business under the scheme are made to offset these deductible revenue costs. They must therefore be included as income in the business’s calculation of its taxable profits for Income Tax and Corporation Tax purposes, in accordance with normal principles.

Businesses can deduct employment costs as normal when calculating taxable profits for Income Tax and Corporation Tax purposes.

Individuals with employees that are not employed as part of a business (such as nannies or other domestic staff) are not taxable on grants received under the scheme. Domestic staff are subject to Income Tax and NICs on their wages as normal.

How to report grant payments in Real Time Information

Find out how to report Coronavirus Job Retention Scheme grant payments on Real Time Information submissions.

Contacting HMRC

HMRC are receiving very high numbers of calls. Contacting HMRC unnecessarily puts their essential public services at risk during these challenging times.

Do not contact HMRC unless it has been more than 10 working days since you made the claim and you have not received it in that time.

Pay Coronavirus Job Retention Scheme grants back

If you’ve overclaimed through the Coronavirus Job Retention Scheme, you can either:

What you’ll need

You’ll need your 14 or 15 digit payment reference number that begins with X.

You must contact HMRC to get your payment reference number.

How to pay

Bank details for online or telephone banking, CHAPS and Bacs

You can pay by Faster Payments, CHAPS or Bacs to HMRC’s account.

Sort codeAccount numberAccount name
08 32 1012001039HMRC Cumbernauld

Payments by:

Your payment may be delayed if you use the wrong reference number.

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