Furlough: The 20% Solution

Published:  01 October, 2020

 From Today (Thursday 1 October), garages that have taken advantage of the Coronavirus Job Retention Scheme will need to pay 20% of wages so employees still receive 80% of their pay under furlough.

As part of a progressive withdrawal of the furlough, the government’s salary contribution has dropped from 70% to 60%.The government  is paying up to a total of £1,875 per worker, with employers topping up the national insurance, pension contributions and 20% of wages to make sure staff still get 80%.

Since Saturday 1 August, businesses that have put staff on furlough have been required to pay National Insurance and pension contributions for their workers. Up until then, the government had been paying up to 80% of wages, up to a maximum of £2,500 per month. At that point, the government was still paying 80% of wages. This was dropped to 70% on Tuesday 1 September.

The furlough will end on  Saturday 31 October. It will then be replaced by the Job Support Scheme from Sunday 1 November. Through this, eligible staff will be able to  receive up to 77% of their salaries for six months. The Scheme is designed to offer firms the option of keeping employees on the payroll on shorter hours, instead of making them redundant.

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