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Updated: Coronavirus Job Retention Scheme

The government has provided further guidance for employers on how the Coronavirus Job Retention Scheme (CJRS) will operate, how much can be claimed and the eligibility criteria.  The information below is based on facts as we know it and is subject to change.

Job Retention Scheme

  • CJRS for employers (businesses and charities), so that 80% of salaries are covered via HMRC grants with effect from 1 March 2020 for individual salaries of up to £2,500 per month
  • The grants service will initially last for three months. There is no limit on the amounts the government will provide to support jobs. The Chancellor appealed to employers to keep their workers on and use the grants, rather than laying them off
  • The government expects the scheme to be up and running by the end of April 2020.

How to access the Coronavirus Job Retention Scheme

To access the scheme, employers will need to:

  • Agree with relevant employees who will be furloughed, and notify employees of this change
  • Change the status of employees – this remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation
  • Submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal

How much will be reimbursed?

HMRC will reimburse 80% of furloughed workers usual monthly wage costs, up to a cap of £2,500 per month plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that wage. Employers can use this scheme anytime during his period.

Who can claim?

Any UK organisation with employees can apply, including:

  • businesses
  • charities
  • recruitment agencies (agency workers paid through PAYE)
  • public authorities

The employer must have created and started a PAYE payroll scheme on or before 28 February 2020 and have a UK bank account.

Employees you can claim for

Any employee that is furloughed must have been on the employer’s PAYE payroll on 28 February 2020, and can be on any type of contract, including:

  • full-time employees
  • part-time employees
  • employees on agency contracts
  • employees on flexible or zero-hour contracts

The scheme also covers employees who were made redundant since 28 February 2020, if they are reemployed by their former employer.

To be eligible the employee can not undertake work for the employer while furloughed. This includes providing services or generating revenue. While on furlough, the employee’s wage will be subject to usual income tax and other deductions.

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

Employees on unpaid leave cannot be furloughed, unless they were placed on unpaid leave after 28 February.

Employees on Sick Leave, Cocooned, Volunteering or Training

Employees on sick leave or self-isolating should get Statutory Sick Pay, but can be furloughed after this.

Employees who are shielding in line with public health guidance can be placed on furlough

A furloughed employee can take part in volunteer work or training, if it does not provide services to or generate revenue for, or on behalf of their employer.

However, if workers are required to complete online training courses whilst 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.

Employees on Family Leave

If an employee is eligible for Statutory Maternity Pay (SMP) or Maternity Allowance, the normal rules apply, and they are entitled to claim up to 39 weeks of statutory pay or allowance.

Employers are eligible to recover 92% of Statutory Maternity Pay / Adoption Pay (103% for small employers)

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

How much can an employer claim?

Employers will receive a grant to cover the relevant furloughed workers wage costs as follows;

  • the lower of either 80% of an employee’s regular wage or £2,500 per month
  • plus, the associated Employer National Insurance
  • plus, Minimum Automatic Enrolment Employer pension contributions

At a minimum, employers must pay their employee the lower of 80% of their regular wage or £2,500 per month.  An employer can choose to top up an employee’s salary if they desire but it is not reclaimable under the CJRS grant, neither is any employer pension contribution that higher than the auto enrolment minimum.

*Based on Employers National Insurance is 13.8% of earnings over £719 a month and minimum automatic enrolment pension contributions of 3% of earnings between £512 and £4167 a month.

Full time and part time employees

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.

Employees whose pay varies

If an employee has been employed for a full twelve months prior to the claim, employers can claim for the higher of either:

  • the same month’s earning from the previous year
  • average monthly earnings from the 2019-20 tax year

If the employee has been employed for less than a year, employers can claim for an average of their monthly earnings since they started work.

If the employee only started in February 2020, employers should use a pro-rata for their earnings so far to claim.

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

Employer National Insurance and Pension Contributions

All employers remain liable for associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on behalf of their furloughed employees

National Living Wage/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.

Workers who are required to complete online training courses for instance whilst furloughed, 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 by the government.

How to make a claim

Employers should discuss with their staff and make any changes to the employment contract by agreement. Employers may need to seek legal advice on the process. If sufficient numbers of staff are involved, it may be necessary to engage collective consultation processes to procure agreement to changes to terms of employment.

To claim, you will need:

  • your employer’s PAYE reference number
  • the number of employees being furloughed
  • the claim period (start and end date)
  • amount claimed (per the minimum length of furloughing of 3 weeks)
  • employer bank account number and sort code
  • employer contact name
  • employer phone number

Employers will need to calculate the amount you are claiming.

HMRC will retain the right to retrospectively audit all aspects of your claim.
Employers 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.

Once HMRC have received an employer’s claim and you are eligible for the grant, HMRC will pay it via BACS payment to a UK bank account.
Employers should make their claim in accordance with actual payroll amounts at the point at which they run their payroll or in advance of an imminent payroll.

Employers must pay the employee all the grant they receive for their gross pay, no fees can be charged from the money that is granted. Employers can choose to top up the employee’s salary, but they do not have to.

When will employer be able to make a claim?

The government expect the scheme to be up and running by the end of April.  There is no mechanism for claiming CJRS before the scheme is up and running.


While this updated guidance (26th March 2020) has provided employers with more details of how the scheme will operate, it is likely that the earliest that grants will be paid to employers will not be until May 2020.

However, what is clear is that claims are not automated through the payroll system, and employers will be required to build claims around calculating national insurance and workplace pension contributions.

As the PAYE system requires regular submissions to HMRC each pay day, the government will already have details of those workers employed at 28 February and a record of their usual pay. This will give government a way of evaluating the accuracy of claims.

At this point, employers will require further detail around what to do with workers who have entered a salary sacrifice arrangement.

There will also be anxious company directors of micro businesses hoping for additional support from the government.

The full release is available at

This guidance will be updated when more information is announced.