As information around the Coronavirus Job Retention Scheme (CJRS) and furlough is constantly changing, this fact sheet includes the latest guidance.

This is a temporary scheme which is open to all UK employees, starting from 1 March 2020 and currently running until the end of October. The scheme has been designed to support employers whose operations have been severely affected by coronavirus. You can access the scheme via the HMRC portal. 

The timeline for the scheme is now as follows:

  • Employers can use an HMRC portal to claim for 80% of furloughed employees’ gross monthly wage costs, up to £2,500 per month, PLUS the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that wage until July.
  • 10 June was the last date that employers could put employees on furlough.
  • From 1 July, ‘flexible furlough’ is being introduced. This means employees can work part-time and either remain on or be placed on furlough leave part-time. Employers will need to notify employees on how the time will be split.
  • From 1 August, employers will be required to pay employee’s national insurance and pension contributions. This will no longer be claimed through the CJRS.
  • From 1 September, the CJRS will only reimburse 70% of salaries (up to a maximum of £2,190). This means employers will be required to top up to 80% (or more depending on what has previously been agreed).
  • From 1 October, the government will reimburse 60% of salary (maximum cap of £1,875) – requiring employers to continue the top up to 80%.
  • The scheme is scheduled to close on 31 October 2020.

You are not able to claim for non-monetary benefits (for example, the value of health insurance or a company car).

It is open to all UK employers that had created and started a PAYE payroll scheme on 28 February 2020. It is only available to employees who were already on the payroll at the 28th February, any new joiners beyond that date are not entitled to a furlough payment.


A furloughed employee is an employee who is not required to undertake any work of any kind for the employer and who would otherwise have been ‘laid off’.

To clarify the term ‘furlough’ is not a legal term, it is the label the government has given to employees that an employer wishes to retain, but is unable to currently provide any work of any kind for them to undertake.

Who can claim?

Any UK organisation with employees can apply, including:

  • Businesses
  • Charities
  • recruitment agencies (agency workers paid through PAYE)
  • public authorities

You must have created and started a PAYE payroll scheme on or before 28 February 2020 and have a UK bank account. Where a company is being taken under the management of an administrator, the administrator will be able to access the Job Retention Scheme.

If you have Employees who transferred under TUPE and on a change in ownership a new employer is eligible to claim under the Coronavirus Job Retention Scheme in respect of the employees of a previous business transferred after 28th February 2020 if either the TUPE or PAYE business succession rules apply to the change in ownership.

Which employees can you claim for?

Furloughed employees must have been on your PAYE payroll on or before 28 February 2020 and have been notified to HMRC on an RTI submission on or before 19 March 2020.

Employees that were employed as of 28 February 2020 and on payroll (i.e. notified to HMRC on an RTI submission on or before 28 February) and were made redundant or stopped working for the employer after that and prior to 19 March 2020, can also qualify for the scheme if the employer re-employs them and puts them on furlough.

Employees can be on any type of contract, including:

  • full-time employees
  • part-time employees
  • employees on agency contracts provided you are the employer
  • employees on flexible or zero-hour contracts provided you are the employer.
  • employees on a visa (the job retention scheme is not classed as public funds and therefore visa holders are eligible).

If you made employees redundant, or they stopped working for you on or after 28 February 2020, you can re-employ them, put them on furlough and claim for their wages through the scheme. This applies to employees that were made redundant or stopped working for you after 28 February, even if you do not re-employ them until after 19 March. This applies as long as the employee was on your payroll as at 28 February and had been notified to HMRC on an RTI submission on or before 28 February 2020. This means an RTI submission notifying payment in respect of that employee to HMRC must have been made on or before 28 February 2020.

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.

Furlough payments

Employers will need to make a claim for wage costs through the scheme, and will receive a grant.

Currently at a minimum, employers must pay their employee the lower of 80% of their regular wage or £2,500 per month. An employer can also choose to top up an employee’s salary beyond this but is not obliged to under this scheme.

How does it work?

The employer is required to pay the employee the 80% in the usual way and claim this amount back from HMRC each month. For example, the employee is paid the 80% furlough amount in the March payroll, following which the employer claims back the March payment from HMRC. This process must be followed for each month that the furlough payments are made. Employers can claim the 80% for all employment costs including employee NI and pension payments.

The current scheme will run unchanged until the end of July with the government paying 80% of wages, up to a maximum of £2,500 per month. The scheme will continue in August, September and October but businesses will be asked to start sharing the cost (as detailed at the start of the fact sheet).

How do you calculate full time and part time employees’ wages?

For full time and part time salaried employees, the employee’s actual salary before tax, as of 28 February should be used to calculate the 80%. Fees, commission and bonuses should not be included.

Please speak to your HR Consultant if you want to consider flexi-furlough and how to calculate the payments.

Employees with varied pay

If the employee has been employed (or engaged by an employment business) for a full twelve months prior to the claim, you can claim for the higher of either:

  • If the employee has been employed for less than a year, you can claim for an average of their monthly earnings since they started work.
  • If the employee only started in February 2020, use a pro-rata for their earnings so far to claim.

Once you’ve worked out how much of an employee’s salary you can claim for, you must then work out the amount of Employer National Insurance Contributions and minimum automatic enrolment employer pension contributions you are entitled to claim.

Employer National Insurance and Pension Contributions

All employers remain liable for these on behalf of furloughed staff. You can claim a grant from HMRC to cover wages for a furloughed employee, equal to the lower of 80% of an employee’s regular salary or £2,500 per month, plus the associated Employee National Insurance contributions and minimum automatic enrolment employee pension contributions on paying those wages. The reclaimable NI and pension elements are on the furlough salary, not the normal salary.

You can choose to provide top-up salary in addition to the grant. Employee National Insurance Contributions and automatic enrolment contribution on any additional top-up salary will not be funded through this scheme. Nor will any voluntary automatic enrolment contributions above the minimum mandatory employee contribution of 3% of income above the lower limit of qualifying earnings (which is £512 per month until 5th April and will be £520 per month from 6th April 2020 onwards).

National Living Wage and National Minimum Wage

Individuals are only entitled to the National Living Wage (NLW)/National Minimum Wage (NMW) for the hours they are working. Therefore, furloughed workers, who are not working, must be paid the lower of 80% of their salary, or £2,500 even if, based on their usual working hours, this would be below NLW/NMW.

However, if workers are required to for example, complete online training courses whilst they are furloughed, then they must be paid at least the NLW/NMW for the time spent training, even if this is more than the 80% of their wage that will be subsidised.

How to claim

You will need to calculate the amount you are claiming. HMRC will retain the right to retrospectively audit all aspects of your claim. You can only submit one claim at least every 3 weeks, which is the minimum length an employee can be furloughed for. Claims can be backdated until the 1 March if applicable. No deductions should be made from the grant and the total amount should be paid to the employee. You can access the portal here.

What happens next?

Once HMRC have received your claim and you are eligible for the grant, they will pay it via BACS payment to a UK bank account. You should make your claim in accordance with actual payroll amounts at the point at which you run your payroll or in advance of an imminent payroll. You must pay the employee all the grant you receive for their gross pay, no fees can be charged from the money that is granted. You can choose to top up the employee’s salary, but you do not have to.

What happens at the end of the scheme?

Once the scheme closes, you must decide whether your employees can return to their positions. If not, you may have to consider redundancy.

How do you furlough an employee?

Employees can only be furloughed by mutual agreement. Therefore, both parties, the employer and the employee must agree to the employee being furloughed. In the absence of a short term or lay off clause in the employment contract, employees must give their consent to being furloughed.

Employees must be notified that they have been selected to be furloughed and this must be confirmed in writing as a change to their terms and conditions of employment via a furlough agreement. This is an important document and must be must retained securely for five years.

How do you bring back furloughed employees part-time?

From July you will need to mutually agree on the terms, and this will need to be documented with updated change of terms letter. You will also need to calculate the overall cost to your business taking into consideration the government reimbursement and the employer contribution required. We recommend working with an HR Consultant to plan this.

Employees hired after 28 February 2020 cannot be furloughed or claimed for in accordance with this scheme.

Can commission be reclaimed?

Employers can reclaim compulsory commission (contractual) from HMRC as well as basic salary (however, this only applies to past commission as those furloughed would not be able to generate commission whilst on furlough).

Can employees who resigned or who were made redundant be furloughed?

Yes, you can re-hire employees and then furlough them, provided they were on the payroll on or after the 28 February.

Can company directors be furloughed?

Yes, the latest guidance advises that they can whilst still performing their statutory duties, for more information contact your HR Consultant.

Can apprentices be furloughed?

Yes, the same rules apply to apprentices as to other employees. For more information contact your HR Consultant for further advice on supporting your apprentice and continuing their learning during this time.

Can furloughed employees continue to work for the organisation?

Yes, from 1 July you can now bring back employees on a part-time basis (or flexible furlough).

Can you furlough employees who have already been made redundant?

If an employee who was made redundant since 28 February 2020, they can be considered rehired by their employer. However, this is at employer discretion.

Can you furlough some employees and make others redundant?

You may choose to furlough some employees and make some employees redundant, whilst requiring other employees to continue to work.  Employees can be made redundant either during or at the end of the furlough period.

Employers need to be mindful that employees with less than two years’ service who are furloughed, may cross the two-year threshold during this period and therefore become entitled to a redundancy consultation process and payment. Continuous service will apply during the furlough period.

Employees who are currently facing redundancy, or have been confirmed as redundant but are not yet in receipt of their P45, can consent to being furloughed. This has the potential of delaying the redundancy decision.

Employers are able to commence redundancy consultation with employees during the furlough period, if the company’s financial situation worsens.

Can employees on statutory sick pay (SSP) be furloughed?

HMRC has provided guidance on this, it is dependent on the specific situation and you should discuss this with your HR consultant.

Does it apply to employees with more than one job?

Yes, if your employee has more than one employer they can still be furloughed for each job. The cap would apply separately to each job and employer.

Maternity leave, contractual adoption pay, paternity pay or shared parental pay

If you offer enhanced (earnings related) contractual pay to women on Maternity Leave, this is included as wage costs that you can claim through the scheme. The same principles apply where your employee qualifies for contractual adoption, paternity or shared parental pay.

What are employees’ rights whilst furloughed?

Employees that have been furloughed have the same rights as they did previously. This would include Statutory Sick Pay entitlement, maternity rights, other parental rights, rights against unfair dismissal and to redundancy payments. Once the scheme has been closed by the government, HMRC will continue to process remaining claims before terminating the scheme.

Holiday leave and furlough

Can you take holiday whilst on furlough leave?

Currently legislation is silent on this point and HMRC may provide clearer guidance in the future. However, in the absence of clear guidance it is reasonable to assume that an employee can take annual leave whilst furloughed, and employers can claim the 80% for employees who are on annual leave and furlough.

It is recommended that employers pay holiday at 100% for the 5.6 weeks and claim 80% of salary from HMRC. This is because employees can’t contract to be paid less than their normal remuneration whilst on holiday and the furlough period is not a long enough reference period to fairly calculate normal remuneration.

Do employees have to use holiday within the holiday year?

You should refer to your normal holiday carry over policy rules. If you do not have a carry over policy  the government rules may be adopted but this is at the discretion of the business.  during the coronavirus period it is recognised that this may be more difficult and employees may be getting to the end of their leave year with holiday still left to take.

In what circumstances are employees now allowed to carry over holiday due to the impact of the corona virus?

The potential circumstances which may create a need for holiday to be carried over are:

  • they’re self-isolating or are too sick to take holiday before the end of their leave year
  • they’ve had to continue working and could not take paid holiday.

Do employees whose employment is terminated have the right to receive payment for any accrued but untaken holiday?

Under the Working Time Regulations 1998 an employee is entitled to receive payment for any untaken holiday on termination.  This would include any carry forward holiday.

Do you have to alter the holiday entitlement for those members of staff who contractually changed their hours in response to the corona virus pandemic?

Yes. If you have workers who change their contracted hours of work, you must look at each period separately to work out how much holiday they are entitled to receive.

What about bank holidays during furlough leave?

Bank holidays should be taken as holiday leave as normal, where possible and should be paid at 100% of salary. If employees and workers cannot take bank holidays off due to coronavirus, they should use the holiday at a later date in their leave year. If this is not possible, bank holidays can be included in the 4 weeks’ paid holiday that can be carried over. This holiday can be taken at any time over a 2-year period.

What happens to previously booked holiday?

If an employee no longer wants to take time off which they had previously booked, for example because their travel plans have been cancelled, their employer may still require them to take the time off. If the employee wants to change their holiday dates, they will need to gain agreement from their employer.

Get in touch with our team if you would like more guidance around this. Information correct as of 15 June 2020. 


You can also download this information as a Furlough-fact-sheet-15-June.pdf (55 downloads)