Pay when on furlough
Up until 30 September 2021, employers could use the Coronavirus Job Retention Scheme (CJRS) to claim a percentage of each employee or worker's usual wages while they were on furlough.
Staff on furlough got 80% of their usual wages up to £2,500 per month – or more if that had been agreed with the employee or worker.
Pay during furlough was taxable in the same way as someone's usual pay would be.
How much employers can claim
The financial support available to employers under the scheme was reduced, but they had to continue to pay furloughed employees 80% of their wages, up to a cap of £2,500 per month for the time they spent on furlough.
From 1 August to 30 September 2021:
- employers could claim 60% of wages, up to £1,875 per month
- employers needed to pay 20% of wages, up to £625 per month
Employers could not include in their claim to HMRC any:
- employer contributions to the employee or worker's pension
- employer National Insurance (NI) or tax contributions
Topping up wages to 100%
The employer could decide whether they'd top up employees' or workers' wages to 100% when they were on furlough, but they did not have to. If the employer decided not to top up the wages, they should have explained why.
When someone who was on furlough took paid holiday, they should have received holiday pay based on what they would usually earn if they were working.
Redundancy pay and notice pay
When calculating statutory redundancy pay or statutory notice pay for staff who have been on furlough, the employer must use the employee's full normal pay, not their reduced furlough rate.
Find out more about:
Minimum wage during furlough
If staff on furlough were paid 80% of their wages, this might mean they got less than the minimum wage. This was allowed as long as they were not working or doing work-related training. For example, training that made money or provided a service for their employer or an organisation linked to their employer.
If someone did work-related training while on furlough
If someone did work-related training, the employer must have paid them at least the National Minimum Wage or the National Living Wage during their pay period. In most cases, furlough pay would be sufficient for these hours. If not, the employer must top up their furlough pay.