Furlough Scheme: what's the latest?

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There's a new "F-word"...yes, you guessed it—furlough.

At the start of 2020, it is highly unlikely that the average Brit had ever come across the term. However, since the furlough scheme – officially known as the Coronavirus Job Retention Scheme (CJRS) – was introduced in March 2020, almost 10 million jobs have been supported.

Equally, since its inception, the scheme has undergone more than one makeover. In fact, it has been extended on no fewer than five different occasions.

All this can mean that staying up to date with the latest regulations can be extremely complicated.

To help ease the burden and prevent you from hours of unnecessary research, we've decided to produce this short article containing all of the latest rules and regulations relating to the furlough scheme.

So, what's the latest?

In Chancellor Rishi Sunak's Budget announcement on 3 March 2021, it was announced that furlough would be extended until 30 September.

It was also announced that the employer contributions would gradually increase during the last three months of the scheme.

From the beginning of July, employers will be required to contribute 10% of their furloughed employees' salary, meaning government contributions will reduce to 70%.

This goes up to 20% in August and September with government contributions reducing to 60%.

Who is eligible for the CJRS?


All employers with a UK bank account and UK PAYE schemes can claim for the grant. The employer does not have to have previously used the CJRS to be eligible.


To be eligible for the CJRS for periods up to 30 April 2021, employees must have been on an employer's PAYE payroll on 30 October 2020. This means that an RTI submission for that employee must have been made between 20 March and before 30 October 2020. 

Employees can be furloughed regardless of whether they have or have not been previously furloughed. If an employee is being furloughed for the first time and was not employed on 19 March 2020, the updated calculations and reference period must be used. 

For fixed salary employees, this will mean 80% of the wages payable in the last pay period ending on or before 30 October. Those on variable pay will receive 80% of the average payable between the start date of their employment or 6 April (whichever is later) and the day before their extension furlough period begins.

Any employee who has been previously furloughed or employed since 19 March 2020, will have their pay calculated based on the previous pay reference period. For fixed salary employees, this will relate to 80% of the last pay period ending on or before 19 March.

For periods on or after 1 May 2021, an employer can claim for an employee if they were employed on 2 March 2021, and as long as they have made a PAYE RTI submission to HMRC between 20 March 2020 and 2 March 2021.

All employees on variable pay will be eligible to receive the higher of either 80% of the wages earned in the corresponding calendar period in the tax year 2019 to 2020 or the average wages payable in the tax year 2019/20.

Employees on all types of contract are eligible and employers will need to agree to any working arrangements with employees.

Timeline of the furlough scheme

March 2020

CJRS launched on 20 March and backdated to 1 March. Government contributions begin at 80% of a furloughed employees' wage, capped at £2,500 per month. Government contributions include employer National Insurance (NI) and pension contributions. The CJRS is initially planned to last just three months—March to May.

April 2020

Following the extension of a country-wide lockdown, the CJRS is extended until the end of June.

May 2020

On 12 May, the CJRS is extended until the end of October; however, it is also announced that government contributions will decrease month-on-month from August. Finally, it is confirmed that companies will be unable to furlough an employee for the first time beyond 10 June.

July 2020

Flexible furloughing is introduced from the start of July. Furloughed employees are allowed to return to work on a part-time basis; however, employers become responsible for paying the entirety of an employee's wage for the hours they work. Government contributions remain at 80% for all unworked hours.

August 2020

Employers are required to begin paying NI and pension contributions for furloughed employees. Businesses continue to receive 80% of a furloughed employee's wage from government contributions.

September 2020

Government wage contributions reduce to 70% and employers have to pay 10% of their furloughed employees' wage to meet the minimum 80% mark.

October 2020

The wage contribution is reduced again, this time to 60%. Employers must now contribute a minimum of 20% of furloughed employees' wages.

November 2020

On 31 October, the day the CJRS was due to end, Prime Minister Boris Johnson announces that it will be extended until December. Government contribution returns to 80% (capped at £2,500 per month); however, employers remain responsible for NI and pension contributions. It is also announced that employees, for the first time since mid-June, can be furloughed for the first time.

5 November 2020

Chancellor Rishi Sunak announces that the furlough scheme will be extended until the end of March.

17 December 2020

Chancellor Rishi Sunak announces that the furlough scheme will be extended for a further month until the end of April 2021.

3 March 2021

In his Budget announcement, Chancellor Rishi Sunak announces that furlough will be extended until the end of September 2021.

27 May 2021

From 27 May, employers claiming between 16-99 employees will need to download and complete a new template rather than manually upload a claim for each employee.

1 July 2021

From the beginning of July, employer contributions will increase from 0% to 10%. Government contributions will decrease from 80% to 70%. The minimum amount a furloughed employee receives will remain at 80%.

1 August 2021

Employer contributions increase from 10% to 20%. Government contributions will decrease from 70% to 60%. The minimum amount a furloughed employee receives will remain at 80%. These rates will remain the same until furlough ends on 30 September 2021.

30 September 2021

Furlough ends.

14 October 2021

Final claim date.

Flexible furlough

Under flexible furlough, employers can only claim for the hours that an employee does not work. The claimable amount can be calculated by reference to their usual working hours in a claim period. Naturally, employers will be responsible for paying employees for all hours worked. 

Employer furlough grant claims should cover a minimum period of seven consecutive calendar days. Employers will need to report the hours worked and the usual hours an employee would be expected to work in a claim period to HMRC. 

Employers remain entitled to top-up employee wages should they wish.

Can employees that have been made redundant be brought back?

An employee who has been made redundant or stopped working can be re-employed and placed on furlough provided that they meet one of two conditions:

  • the employee was on an employer’s payroll on 23 September and a PAYE Real Time Information (RTI) submission including them, was sent on or before this date;
  • they were made redundant or stopped working for their company on or after 23 September.

How does an employer claim?

Employers will need their Government Gateway user ID and password they received when they registered for PAYE online.

They can claim before, during or after they process their payroll, providing the claim is submitted by the relevant claim deadline. They are not allowed to claim more than 14 days before the claim period end date.

When making a claim an employer:

  • does not have to wait until the end date of the claim period for a previous claim before making their next claim;
  • can make a claim more than 14 days in advance of the pay date—e.g. if an employer pays their employees in arrears.

If an employer does not finish their claim in one session, they can save it as a draft. However, an employer must complete their claim within seven days of starting it.

Claims must be submitted by 11.59 PM, 14 calendar days after the month being claimed for. If this time falls on a weekend or bank holiday, then claims should be submitted on the next working day.

If an employer wants to delete a claim in the online service, they must do so within 72 hours of starting it.

From 27 May 2021, employers claiming between 16-99 employees will need to download and complete a template when processing their claims. This system has previously existed only for claims of 100 or more employees. 

It has been introduced to help reduce errors and make the claim process simpler and more efficient as employers will no longer have to manually enter information for each employee they are claiming for. 

To ensure that the template is accepted, employers will need all of the following information for each employee. 

  • Employee’s full name
  • National Insurance number (or payroll reference number if not accessible)
  • payroll reference number (sometimes called a pay identify or staff number)
  • furlough start and end date (using the format DD/MM/YYYY)
  • full amount claimed (pounds and pence)
  • normal hours (using decimals, e.g. 5.5)
  • actual hours worked (using decimals)
  • furloughed hours (using decimals)
  • if an employee has returned from statutory leave and has then been placed on furlough

A template may be rejected if the correct information is not provided in the right format. Should this happen, a message will be displayed saying that a claim has not been processed. 

To find out more about this process, employers can visit this link for more information.

PayFit & furlough

We understand and appreciate that furloughing employees is a decision that no employer takes lightly. Consequently, we are committed to helping and supporting our customers through building features within our software, as well as providing advice and guidance.

Our furlough feature has been designed and built specifically to support customers with any employee furlough they implement.

What can the PayFit app do?

  • Provide support with furloughing
  • Automatically calculate the cost of furlough
  • Provide a report for all pay related to furloughed leave
  • Facilitate flexible furlough

"During COVID, PayFit reacted quickly to new rules and went above and beyond to make sure our payroll would run on time. It was during this time I discovered I'd been recording holiday the wrong way in the app, which meant the pay totals were wrong for furlough. PayFit's customer support team helped identify this, worked out how to resolve it and then did the corrections for me. Truly first class payroll software."

Steve Root, Partner @ Roots Kitchens Bedrooms Bathrooms

Unsure about furlough or concerned that your current payroll provider is not able to meet your demands? 

Why not book a demo with one of our product specialists today?

PayFit disclaimer

The information contained in this document is purely informative. It is not a substitute for legal advice from a legal professional.

PayFit does not guarantee the accuracy or completeness of this information and therefore cannot be held liable for any damages arising from your reading or use of this information. Remember to check the date of the last update.

PayFit blog author

PayFit blog author


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