The Treasury has today announced that it will gradually withdraw its job retention scheme over the next five months, with businesses meeting 20% of the wage bill for their furloughed staff by October.
What are the key milestones?
June and July
The government will pay 80% of wages up to a cap of £2,500 plus employer national insurance (ER NICs) and pension contributions. Employers are not required to pay anything.
The scheme will close to new entrants on 30 June, new entrants need to be furloughed by 10 June. In July, businesses can start bringing furloughed staff back part-time and employers will pay their wages for hours worked.
The taper starts. The government still pays 80% of wages up to £2,500, but employers must now pay ER NICs and pension contributions. For an average employer this represents 5% of employment costs had an employee not been furloughed.
Government pays 70% of wages up to a cap of £2,187.50 Firms must contribute 10% of wages plus ER NICs and pension contributions – about 14% of gross employment costs pre-furlough.
Government pays 60% of wages up to a cap of £1,875. Employers contribute 20% plus ER NICs and pension – about 23% of gross employment costs pre-furlough.
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