The Furlough Job Retention Scheme is changing this month as businesses will need to pay towards the wages of staff on furlough as of the 1st September 2020.
The government will be reducing their contributions from 80% to 70% of an employee’s wage up to the value of £2,187.50 a month. Employers will need to pay the 10% difference.
Since 1st August 2020, employers have also had to pay National Insurance Contributions and pension contributions for staff.
Did you know Employees are required to pay tax, National Insurance and pension contributions on the money they receive through the furlough scheme?
From October, the scheme will change again, with only 60% of the wage being funded by the government and a new law has been introduced regarding redundancy pay, meaning redundancy will not be based upon furloughed wages but full earnings.
An estimated 1.14 million employers have benefited from the furlough scheme that has so far cost the government over £34 billion. For employers there have been benefits – payments of £1,000 will be made for each member of staff who remains employed from November 2020 to the end of January 2021.
