NEWS

Coronavirus: Job Retention Scheme Update

In a further update to the Coronavirus Job Retention Scheme, the Government has announced that it will now cover employer National Insurance (NI) and employer auto-enrolment costs for furloughed staff. The Treasury says this latest move could save businesses an extra £300 a month for each employee under the scheme.

Most employers use pension schemes that from April 2019 require a total minimum of 8% contribution to be paid. The calculation for this type of scheme is based on a specific range of earnings. For the 2019/20 tax year this range is between £6,136 and £50,000 a year (£512 and £4,167 a month, or £118 and £962 a week). These figures are reviewed each year by the government.

Under the Coronavirus Job Retention Scheme, employers can claim a grant covering 80% of the wages for a furloughed employee, subject to a cap of £2,500 a month. Fees, commission and bonuses should not be included. This gives a maximum cap of £2,500 +£245 (employers’ NIC) + £59 (auto-enrolment pension contribution) = £2,804 of total possible grant that can be applied for per employee per month.

The new guidance also confirmed that those made redundant after 28 February 2020 can be re-employed and placed on furlough. Also, those on furlough will be permitted to volunteer without risking their pay.

31/03/2020