PAYE - Job Retention Scheme

The below has been written from the point of view of an employer

If you are an employee and have any questions regarding your own status or furlough related issues, please call us and we will help explain the process and answer any specific questions you may have


Both you and your employee must agree to the furlough of their position. Once agreed you must write to your employee confirming they have been furloughed to be eligible to claim.

Employees must have been on your PAYE payroll on 28 February 2020. They can be on any type of contract, including a zero-hour contract or a temporary contract.

This scheme does not apply if you are self-employed or to any income from self-employment.

The grant will start on the day staff were placed on furlough and this can be backdated to 1 March.

If your staff member currently has more than one employer

Employees can be put on furlough by one employer and continue to work for another, if it is permitted within their employment contract.

If they’re put on furlough by more than one employer, they’ll receive separate payments from each employer. The 80% of their normal wage up to a £2,500 monthly cap applies to each job.

If staff are on Maternity Leave, contractual adoption pay, paternity pay or shared parental pay

At least 2 weeks Maternity Leave (4 weeks if you work in a factory or workshop) must be taken immediately following the birth of their baby. This is a health and safety requirement. In practice, most women start their Maternity Leave before they give birth.

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

If they qualify for SMP, they will still be eligible for 90% of ytheir average weekly earnings in the first 6 weeks, followed by 33 weeks of pay paid at 90% of your average weekly earnings or the statutory flat rate (whichever is lower). The statutory flat rate is currently £148.68 a week, rising to £151.20 a week from April 2020.


How much they’ll get

You will get a grant to cover 80% of your staffs monthly earnings, up to a maximum of £2,500. You will be eligible for the grant once your staff members have been furloughed, from 1 March.


  • will pay staff at least 80% of their usual monthly earnings, up to a maximum of £2,500, as their wage
  • can claim for a minimum of 3 weeks and for up to 3 months - but this may be extended
  • can choose to pay you more than the grant - but you do not have to

They’ll still pay Income Tax, National Insurance contributions and any other deductions from their wage.

How their monthly earnings are calculated

If they’ve been employed (or engaged by an employment business in the case of agency workers) for a full year, you will claim for the higher of either:

  • the amount they earned in the same month last year
  • an average of their monthly earnings from the last year

If they’ve been employed for less than a year, you will claim for an average of their monthly earnings since they started work. The same arrangements apply if their monthly pay varies such as if they are on a zero-hour contract.

If they started work in February 2020, you will pro-rata their earnings from that month.

Bonuses, commissions and fees are NOT included as part of their monthly earnings.

While they’re on furlough

You will need to notify staff before putting them on furlough.

Once they are on furlough they will not be able to work for you, but they can undertake training or volunteer subject to public health guidance, as long as they’re not:

  • making money for you
  • providing services to you

If workers are required to for example, complete 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.

Any activities undertaken while on furlough must be in line with the latest Public Health guidance during the COVID-19 outbreak.

You can still make staff redundant while they’re on furlough or afterwards.

Their rights as an employee are not affected by being on furlough, including redundancy rights.

If you choose to place your staff on furlough, they will need to remain on furlough for a minimum of 3 weeks. However, you can place staff on furlough more than once, and one period can follow straight after an existing furlough period, while the scheme is open. The scheme will be open for at least 3 months.

If staff do not want to go on furlough

If you ask staff to go on furlough and they refuse, they may be at risk of redundancy or termination of employment, depending on the circumstances of your business as a going concern. However, this must be in line with normal redundancy rules and protections.

Get in touch

If you'd like any further information or have a question about the services we offer, please call us on 01621 874590 or email us