If you are worried about your current or future financial situation due to the Coronavirus read our guide and learn how to protect your income through furlough.

On 1 March 2020, the UK Government introduced the Coronavirus Job Retention Scheme to support employers and employees where the business operations suffered due to pandemic. Presumably, you will be familiar with the terms “Furlough” or “Furloughing” by now.

In this article, we will present an easy to follow guide to furlough.

What is furlough?

A furlough is a temporary leave of employees due to special needs of a company or employer, which may be due to economic conditions at the specific employer or in the economy as a whole.

Source: Wikipedia

In simple terms even if the business cannot operate (or operations are reduced), you are still kept on the payroll and get the salary paid.

Is furlough guaranteed for all employees?

Furloughing is a non-mandatory decision taken by employers and employees. While you may want to get on furlough, it is down to your employer to decide. Furlough is not guaranteed.

How much money can I get?

This is the tricky bit. Here are the facts.

The UK Government will pay 80% of Your salary if you have been furloughed. The payment cap is set at £2,500 per month before tax.

Your employer can pay the remaining part of your salary, but this is voluntary.

So how much precisely the UK Government will pay?

If you earn £3,125 per month (before tax) or more, you will get a fixed sum of £2,500 per month. In other words, if your annual salary is £37,500 or more will get £2,500 per month when on furlough.

If you earn less than £3,125 per month (before tax), then your salary will get less then £2,500. The exact figure will be calculated as 80% of your salary. Example: If your monthly salary equals £2,000 that the UK Government will pay you £1,600 per month.

What about the contract type or the work I do?

You can benefit from the furlough as long as you are on the PAYE payroll. Contract type or the job itself, is irrelevant.

Is there anything I have to do to get paid?

It is your employer who needs to claim. There is nothing you can or should do. From the employee’s perspective, the salary (likely to be reduced) will continue to get paid as long as the employee is on furlough.

What are the key dates?

1 March 2020

Coronavirus Job Retention Scheme is effective from 1 March 2020.

3 months

As it stands today, the Scheme will run for three months. It may be extended if necessary.

28 February 2020

You can only benefit from the furlough is you were on the payroll on or before 28 February 2020.

3 weeks

You can be furloughed multiple times. However, every time you start a furlough, it must be for a minimum period of 3 consecutive weeks.

If you have any questions regarding furlough, please write in the comments section below.

Due to the Coronavirus information provided in this post may change over time. Remember to visit www.gov.uk to check the latest update on the Coronavirus.