All the new furlough rules from September 1 including how your pay is changing

Bosses across the UK are preparing for new furlough changes as the Government starts scaling back contributing to employee wages.

The furlough scheme is still supporting millions of Brits having peaked at propping up 8.9m workers.

But next month Downing Street is reducing its contribution in a move which could trigger a fresh round of redundancies.

From September 1, the Treasury’s contribution will fall by 10% meaning employers will have to start paying more.

The Job Retention scheme was introduced to support firms who could not operate normally during lockdown.

Major changes are set to be introduced next month as the Government starts paying less towards workers' wages.

From September 1

From September the Government will pay 10% less than it has been, totalling 70% of wages capped up to £2,190.

And employers will have to pay national insurance, pension contributions, and 10% of wages to take the total up to 80%.

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From October 1

From October the scheme will be wound down even further.

The Government will pay 60% of a workers wages, capped up to a total of £1,875.

Bosses will have to pay national insurance, pension contributions and 20% of an employees wages to take their pay packet to 80% – or up to £2,500.

Alan Price, employment law expert and chief executive of BrightHR, told the Daily Mirror : “The Job Retention Scheme was put in place to support employers who were not able to operate as normal due to the pandemic.

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“Since 20 March 2020, thousands of employers have furloughed all, or part, of their workforce and claimed 80% of employee wage costs, to a maximum of £2,500 per employee per month. The scheme has supported 9.6 million employees thus far.

"But as we approach September, employers and employees need to be aware of some further changes to the Job Retention Scheme.”

Until August 1, workers had been able to claim 80% of their wages along with national insurance and employer pension contributions from the Treasury.

But the system will change in September and again in October as the Government begins winding down its input into workers' wages.

Mr Price said: "Employers will also need to continue paying employer national insurance contributions and pension contributions for not only August but September and October as well.

“Another important detail that employers should be aware of is that once Government contributions begin to decrease in September, employers must top this up to ensure that furloughed employees still receive 80% of their wages up to £2,500.

"For example, a 70% grant up to £2,187.50 will attract a 10% top up from employers to a maximum of £312.50.

"The furlough scheme may be coming to an end on 31 October, but employers still need to keep up to date with its changing structure."

The number of furloughed workers continue to fall as Britain edges closer to normality.

But millions of employees still rely in the scheme, with a study from the Resolution Foundation suggesting around three million people are on it.

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