Coronavirus Job Retention Scheme

Back to results

This article is for financial advisers only. It mustn’t be distributed to, or relied on by, customers. It is based on our understanding of legislation at the date of publication.

Many businesses across the UK have seen some effect on their operations because of coronavirus and the restrictions it’s placed on all our lives.

Government support

For those businesses adversely affected, the Government has provided support in several different ways. To provide financial assistance and to protect jobs, it introduced the Coronavirus Job Retention Scheme (CJRS) for employers and their employees and the Self-Employment Income Support Scheme (SEISS) for self-employed people.

The CJRS and SEISS both took effect from 1 March 2020 and were due to close on 31 October 2020, with the financial support available from the CJRS tapering off from 1 August 2020. However, ongoing spikes in coronavirus cases across the UK and the necessity to introduce further lockdown measures to combat these resulted in the Government reviewing the support it provides. Both the CJRS and the SEISS were extended for a further six months from 1 November 2020 with the Government indicating that levels of support will be reviewed early in 2021.

The rest of this article looks at the support provided from the CJRS.

CJRS support 

The following table summarises the levels of support available from the CJRS since it was introduced:

  1/3/2020 to 31/7/2020 1/8/2020 to 31/8/2020 1/9/2020 to 30/9/2020 1/10/2020 to 31/10/2020 1/11/2020 to 30/4/2021
JRS wages claim 80% up to £2,500pm 80% up to £2,500pm 70% up to £2,187.50pm 60% up to £1,875pm 80% up to £2,500pm
Associated employer NI Claim from JRS Employer pays Employer pays Employer pays Employer pays
3% pension contribution Claim from JRS Employer pays their pension contributions Employer pays their pension contributions Employer pays their pension contributions Employer pays their pension contributions
Employer wages cost Nil Nil 10% up to £312.50 pm 20% up to £625 pm Nil
Employee wages 80% up to £2,500pm 80% up to £2,500pm 80% up to £2,500pm 80% up to £2,500pm 80% up to £2,500pm

Employers can continue to claim for periods ending on or before 31 October 2020 until the deadline on 30 November 2020. Employers claiming for a period that starts on or after 1 November 2020 can only claim for furloughed employees that were employed and on payroll on 30 October 2020, although this may differ where employees have been made redundant, or stopped working and been re-employed. 

Since 1 July 2020, employers have been able to bring furloughed employees back to work part-time. If an employee has some part-time work and some time on furlough, their employer can only claim for their usual hours that they are still furloughed for from the CJRS. In other words, if an employee is working part-time for 3 days and on furlough for 2 days of their usual working hours, the CJRS claim would be calculated based on 2/5ths of their normal gross salary. Although CJRS claims are restricted to a percentage of normal wages (currently 80%), an employer can top up an employee’s wages at their own discretion. 

Example calculations

The example calculations below assume an employee is on full-time furlough with an annual salary of £37,500, who is paid £3,125 monthly and benefits from an employer pension contribution of 3% of qualifying earnings. 

2019/20 tax year

  Monthly
Gross salary £3,125
80% of gross salary £2,500
Employers NI (£2,500 - £719) x 13.8% = £245.78
3% of qualifying earnings (£2,500 - £512) x 3% = £59.64
Maximum claim £2,805.42

The maximum an employer could have claimed from the JRS is £2,805.42 per month. 

2020/21 tax year – up to 31 July 2020

  Monthly
Gross salary £3,125
80% of gross salary £2,500
Employers NI (£2,500 - £732) x 13.8% = £243.98
3% of qualifying earnings (£2,500 – £520) x 3% = £59.40
Maximum claim £2,803.38

The maximum an employer could have claimed from the JRS is £2,803.38 per month. 

2020/21 tax year – 1 August to 31 August 2020

  Monthly
Gross salary £3,125
80% of gross salary £2,500
Maximum claim £2,500
Employers NI (£2,500 - £732) x 13.8% = £243.98
3% of qualifying earnings (£2,500 – £520) x 3% = £59.40
Employer cost £303.38

The maximum an employer could have claimed from the JRS is £2,500 per month. They would be liable to pay the additional employer cost of £303.38.

2020/21 tax year – 1 September up to 30 September 2020

  Monthly
Gross salary £3,125
70% of gross salary £2,187.50
Maximum claim £2,187.50
10% of gross salary £312.50
Employers NI (£2,500 - £732) x 13.8% = £243.98
3% of qualifying earnings (£2,500 – £520) x 3% = £59.40
Employer cost £615.88

The maximum an employer could have claimed from the JRS is £2,187.50 per month. They would be liable to pay the additional employer cost of £615.88. 

2020/21 tax year – 1 October to 31 October 2020

  Monthly
Gross salary £3,125
60% of gross salary £1,875
Maximum claim £1,875
20% of gross salary £625
Employers NI (£2,500 - £732) x 13.8% = £243.98
3% of qualifying earnings (£2,500 – £520) x 3% = £59.40
Employer cost £928.38

The maximum an employer could have claimed from the JRS is £1,875 per month. They would be liable to pay the additional employer cost of £928.38.

2020/21 tax year – 1 November 2020 to 5 April 2021

  Monthly
Gross salary £3,125
80% of gross salary £2,500
Maximum claim £2,500
Employers NI (£2,500 - £732) x 13.8% = £243.98
3% of qualifying earnings (£2,500 – £520) x 3% = £59.40
Employer cost £303.38

The maximum an employer could claim from the JRS is £2,500 per month. They would be liable to pay the additional employer cost of £303.38. 

Assumptions 

These figures are based on the maximum possible claim. Gross salary is based on actual salary before tax including past overtime, fees and any compulsory commission but excluding dividends, discretionary commission, bonuses, tips, non-cash payments or non-monetary benefits. Where a salary sacrifice arrangement is in place for a furloughed employee, the post-sacrifice salary should be used in the calculation. 

If an employee’s salary is below £37,500 annually (or £3,125 monthly), their actual salary should be used in place of these figures to work out the amount that can be claimed. Note, it may be necessary to proportion amounts paid in different pay periods to calculate the amount that can be claimed. 

Further information

At this point in time, it’s expected that the CJRS will end on 30 April 2021. Much will depend, though, on the successful easing of lockdown restrictions, the ability of various sectors in the economy to weather the storm the restrictions have created and the prospects of one or more vaccines being approved and rolled-out to help combat the pandemic. More information relating to the CJRS can be found online at:

Pensions Technical Services