Coronavirus Employees' Help
Full info on sick pay, WFH tax relief, and the now-closed furlough scheme
After a year and a half the furlough scheme – where employees could receive up to 80% of their wage subsidised by state funds if they couldn't work because of the pandemic or lockdown – has now closed. For your reference, we've kept information in this guide about how furlough worked whilst it was running. The guide also sets out what help is STILL available for employees, such as statutory sick pay and working-from-home tax support.
We're no longer updating this guide as the furlough scheme has now ENDED
The furlough scheme came to a close on 30 September. All of the information throughout this guide about how the scheme worked whilst it was running – between March 2020 and September 2021 – has been kept in place for reference.
For other support for employees affected by coronavirus, including your rights if you are ill with coronavirus or need to take time off to look after relatives who catch it, see our Sick Pay guide.
Need more help? We've got other useful guides...
Now CLOSED. Furlough ended on 30 Sept – how the scheme worked
Update Fri 1 Oct 2021. Please note that the furlough scheme HAS NOW ENDED. All of the information below on how the furlough scheme worked whilst it was still up and running, including the frequently asked questions at the bottom of this section, has however been kept in place for your reference. The tenses used haven't been changed, which is why the section reads as if the scheme is ongoing.
- The furlough scheme will run until 30 September 2021. The scheme's duration had been extended a number of times, but furlough will finally come to a close at the end of this month.
- Employees on furlough continue to get 80% of their salary for hours not worked, up to £2,500/month. This will remain the case until the scheme ends.
- Until July an employee's furloughed wage was covered entirely by the state. Employers only needed to cover any pension and National Insurance costs.
- Since August employers have needed to contribute more to the scheme. Since 1 August, the state will only cover 60% of an employee's wage for hours not worked, capped at £1,875/month, with employers required to top this up to 80%, capped at £2,500/month. Employers also continue to cover any pension and National Insurance costs.
- Employers across the UK can use the scheme – even if they haven't before. So those in Wales, Scotland and Northern Ireland should also be able to apply. It's open to small, medium and large employers, and those which are charitable or not-for-profit – and crucially your employer doesn't previously need to have used the furlough scheme.
- You DON'T need to have been furloughed before to take part. However, depending on what period you're claiming for you need to have been on your employer's payroll at a certain date to take part:
- For any furlough claims up until 30 April you need to have been on your employer's PAYE payroll on or before 30 October 2020 to be eligible. To be precise, your employer must have made a Real Time Information payroll submission on your behalf on or before 30 October 2020.
- For any furlough claims from 1 May until the end of September you need to have been on your employer's PAYE payroll on 2 March 2021 to be eligible. To be precise, your employer must have made a Real Time Information payroll submission on your behalf on or before 2 March 2021.
- You WILL be able to work part-time while on furlough. Your employer can either put you on furlough full-time, or you'll be able to work part-time and be furloughed for the hours you don't work. Your employer will have to cover your wages at the normal rate for any hours you do work. For more information, see below.
- You can't work for your employer during the hours you're furloughed. This includes your normal work obligations and anything beyond your usual remit. However, you can work for another employer while furloughed (if your contract allows this) or volunteer elsewhere.
- Employees on all types of contract can take part. This includes those on zero-hours contracts and fixed-term contracts, as well as agency workers (including those employed by umbrella companies) and supply teachers. This was confirmed by the Treasury in guidance it published on 10 November 2020.
- Those who are 'clinically extremely vulnerable' to coronavirus can continue to be furloughed. As of April, people who have been classified as 'clinically extremely vulnerable' are no longer being advised to shield, and to not travel into the workplace. However, your employer can still furlough you if you remain unwilling to travel into the workplace but you're unable to work from home, even though the official shielding advice now ended. This is at the employer's discretion though.
For furlough claims relating to the period 1 May and onwards, employees need to have been on their employer's payroll on 2 March 2021 to be eligible.
This presents an issue if you were rehired by your old employer in March or April 2021. That's because while you might've been successfully furloughed at the time of your rehiring (for any furlough claims up until 30 April, employees had to have been on their employer's payroll on or before 30 October 2020), you might find that you're suddenly ineligible for furlough from 1 May – as for any claims relating to the period 1 May and onwards employees need to have been on their employer's payroll on 2 March 2021.
Your employer can have you work for it on a part-time basis, while furloughing you for the remaining hours or weeks. Your employer will have to pay your wage for any hours that you are in work.
Here's how being on furlough for some hours but working your other hours happens in practice...
- There's no limit on the number of hours you can work. For example, if you work a 40-hour week and your employer wants to, it can get you to work 39 hours and then furlough you for the remaining hour. The amount of time you work each week can also vary over the month, with employers varying it week by week.
- When you are working, you should be paid your normal wage for those hours. For the hours you're not working, you'll be covered by furlough pay, so you'll get at least 80% of your normal wage. Let's run through an example of how work and furlough pay could interact:
Let's assume you work a 40-hour week, and you earn £1,000 a month for that. On furlough, you don't work and you get £800 a month.
Yet if you went back to work for 10 hours a week, that's a quarter of your normal working time, so you'd earn £250 a month for the work you do. Yet you're still furloughed for 30 hours a week, so you get three quarters of your monthly furlough pay – that's £600.
Adding it up, you'd get a total of £850 a month working those 10 hours, compared with £800 on full furlough.
Can I work one hour on and one hour off?
Of course, for some customer-facing workers who are paid per client, such as hairdressers, the workplace restrictions imposed because of coronavirus might mean reduced customer footfall when you actually restart work.
This will likely make the transition back to work financially challenging for many of these workers, as for the hours you're physically at work you won't be able to claim furlough pay – you can't, for instance, claim furlough pay for three hours of work that you've 'lost' through being at work but having to make the workplace Covid-safe, rather than seeing clients.
Businesses are able to claim either shortly before, during or after running payroll.
Claims relating to each month should be submitted by day 14 of the following month, to ensure prompt claims following the end of the month which is the subject of the claim.
Being on furlough guarantees 80% of your usual pre-tax monthly salary, as it was in your last pay period before 19 March 2020 (this will likely be February's pay). For those who weren't employed by their current employer in March 2020 and haven't been furloughed by them at any point, the 80% will be based on your last pay period before 30 October 2020.
If your pay varies from month to month – for example, because you're employed on a 'zero-hour' contract – the 80% will be calculated based on the higher of:
- Your earnings in the same month of the previous year.
- OR your average monthly earnings from the 2019/20 tax year.
If you've worked for your employer for less than a year, it'll be calculated based on your average monthly earnings while you've worked there. And if you only started with your employer in the last month, your employer will pro-rata your earnings so far and furlough will be 80% of that.
What parts of my pay are included in the calculation?
The grant paid to your employer will be calculated based on your regular, contractual pay. It will include:
- Regular wages. These are the normal wages or salary set out in your contract for doing your job.
- Non-discretionary overtime. This applies to guaranteed overtime set out in your contract.
- Non-discretionary fees. These are fees your employer has contractually agreed to pay for you, eg, chartered membership fees if your role requires you to be part of a professional association.
- Non-discretionary commission. This is commission that your employer is obliged to pay you due to the terms of your contract, eg, a certain proportion of a car's sale price for motor dealers.
- Piece-rate payments. This applies if you're paid for your output rather than your time, eg, a jeweller paid per ring or a journalist paid per article.
What's not included in the calculation?
Not all the pay and benefits you get as part of your job will be included. The following things won't be used to work out your furlough pay:
- Discretionary commission. This applies where the commission is not part of your contract, eg, tips/tronc for waiters, or tips for hairdressers.
- Discretionary bonuses. These are bonuses that your employer can choose to pay, eg, if the company is doing well, but has no legal obligation to pay.
- Non-cash payments. Any payment you accept that isn't monetary, eg, accommodation included with the job.
- Benefits-in-kind. These are non-monetary parts of your benefits package, eg, medical insurance or a company car.
But currently annual leave is a stumbling block for many employers as it's not covered under furlough. For some employers, this can mean the difference between keeping an employee on or making them redundant.
We've checked to see if employees can waive their right to annual leave – HMRC said the "employer and employee can agree to vary within the furlough agreement".
Yet we've checked with employment lawyers, and they say you're entitled to the equivalent of 28 days a year (20 days holiday + eight bank holidays), which CAN'T legally be waived. HMRC have also confirmed that this minimum can't be waived.
But if you have extra annual leave allowance above this, you can agree to waive it – and it could be a good choice if it makes the difference between that and redundancy. Again, it's best to speak to your employer.
Yes, you can be placed on furlough more than once.
Sadly, despite the Government's Job Retention Scheme, we are seeing some companies, both large and small, unable to continue trading.
If your employer goes into administration, the administrator (the company now overseeing your employer's affairs) is able to put you on furlough – so long as you were on your employer's payroll on 30 October 2020. However, the administrator can only do this if there is a reasonable likelihood of you being re-employed by the company, for example, if the administrator thinks it can sell your employer's business as a "going concern".
Those on fixed-term contracts can be furloughed, but you need to have been on your employer's PAYE payroll on 2 March 2021 to be eligible. To be precise, your employer must have made a Real Time Information payroll submission on your behalf on or before 2 March 2021.
If you are on a fixed-term contract and you've been furloughed, your employer is allowed to renew or extend your contract. However, your employer must do this WHILE your contract is still running, ie, it can't be extended once your contract has ended (so any renewal must come before the contract's natural conclusion).
Yes. The national minimum wage or national living wage only applies when you are working or doing training that your employer requires you to do.
Furloughed workers who, by definition, aren't working can be furloughed at 80% of their normal wage, even if that takes their wages below the relevant minimum wage.
If you've been furloughed by your employer, then it MUST pay you the FULL 80% of your wage up to the maximum of £2,500/month (if 80% of your salary is more than that) – it can't pay you any less.
If your employer does try to pay you less than 80% of your normal wage, or it asks you to carry on working while being furloughed (though you can be asked to go for training), speak to your employer and politely remind it of the rules.
Failing this, you can anonymously report your employer to HMRC's fraud department online. However, it may simply be a case of your employer being unaware of the rules.
For those in England, all three and four year-olds get some free childcare, and for many working parents this can be worth up to 30 hours a week. Separately, parents of children up to 11 years old (17 if they've a disability) can also apply for tax-free childcare, worth up to £2,000 per child, per year.
Both are dependent on you (and your partner, if you have one) earning a minimum income equivalent to 16 hours a week at the national minimum wage. But rules introduced by the Government mean if you're temporarily earning less because of coronavirus, but would normally earn enough to qualify, you'll still be able to get free childcare and tax-free childcare as normal.
For critical workers who are now earning above the maximum income threshold because they're working overtime due to coronavirus, they will also remain eligible for both schemes.
What if I live in Wales, Scotland or Northern Ireland?
The measure also applies if you're applying for tax-free childcare and you're in Wales, Scotland or Northern Ireland.
However, free childcare is a devolved issue, and the number of hours of free childcare you can get varies depending on which country you live in. We're checking to see whether the Scottish, Welsh and Northern Irish governments have introduced similar coronavirus-related measures regarding free childcare.
For more information about childcare and what's on offer, see our Tax-Free Childcare guide.
We've heard from lots of MoneySavers whose employers have told them they need to take a certain amount of annual leave during furlough – with some unhappy that their leave entitlement will be reduced when they return to work.
According to the Government and employment body ACAS, your employer CAN require you to take annual leave while you're furloughed.
Yet crucially it'll need to give you notice, generally of at least twice the amount of time you're being asked to take as leave. So if your employer says you need to take a week's leave, it has to tell you at least two weeks before (unless your contract specifies a different notice period).
Your employer should also speak to you and explain why it needs you to take the leave, and should consider whether you'll be able to use your leave for relaxation. If you won't, for example if you're caring for a vulnerable family member, or you're ill, then you should be able to challenge your employer. We've more information on what to do if your employer challenges this back in the dropdown question below.
Vitally, both the Government and ACAS say that while you're on annual leave, you'll need to be paid your FULL holiday pay. If your usual holiday pay would be worth more than your wage during furlough – for example, if you're only receiving 80% of your usual salary while you're furloughed – your employer will need to top up your wages so that you're receiving your usual holiday pay for the period you're on annual leave.
There's full guidance on using annual leave while on furlough on the ACAS website – show this to your employer if it's not following the rules, plus see the help below.
Eligibility for SMP or MA, and the amount you receive, is normally dependent on your average earnings, meaning employees furloughed at only 80% of their wage were initially at risk of being adversely affected.
However, the rules mean that any qualifying employee who went on or is going on maternity leave on or after 25 April 2020 (including if you're still working but have applied for maternity leave) will get their SMP or MA based on 100% of their salary rather than 80%, which would have been their furlough pay.
For SMP, this means you will still get 90% of your FULL pay for the first six weeks – and not 90% of 80% furloughed pay.
However, if you went on maternity leave before 25 April 2020 and you had previously been furloughed on less than 100% pay, this may have affected how much maternity pay you received.
Note. This only refers to your statutory entitlements. Some employers offer much more generous maternity benefits – if your employer if struggling and furloughing staff, speak to them to see how that might affect any enhanced maternity benefits they're offering.
In normal times, supply teachers working for agencies and umbrella companies in England and Wales (it doesn't work this way in Scotland or Northern Ireland) often have their pay structured as 'minimum wage plus discretionary bonuses'. This is done to allow continuity of employment, but different pay rates depending on the job that is being done.
However, this structure causes a problem under the furloughing rules. Discretionary bonuses are not included in furlough pay, so many umbrella agencies (not all – we've heard reports of some who simply aren't contacting staff, and some who have always paid the full amount) who are furloughing teachers are basing the 80% of salary when furloughing on just the minimum wage – meaning very low incomes.
Yet HMRC did change its guidance – you can see it in situ on the Government's 'Work out 80% of your employees' wages' page. The key paragraphs are:
"When you're working out if a payment is non-discretionary, only include payments which you have a contractual obligation to pay and to which your employee had an enforceable right.
"When variable payments are specified in a contract and those payments are always made, then those payments may become non-discretionary. If that is the case, they should be included when calculating 80% of your employees wages."
This hopefully clears up the big issue for supply teachers in England and Wales. Now we hope all firms are furloughing at the right amounts.
Can bonus payments under furlough be backdated?
We've checked, and sadly past furlough pay can't currently be backdated (though HMRC tells us it's working on changing this).
How should supply teachers use this information?
The agencies' nervousness will have come from the fact that while they can claim for the higher amount to be paid to furlough staff, it is later subject to an audit if it was done incorrectly, so they will want comfort that they're doing the right thing based on their salaries. The new guidance should hopefully give them the confidence to go ahead and furlough the higher amount. So it's worth asking them again in light of this (and having the guidance to hand).
But ultimately furloughing isn't compulsory, it's up to the firm. Yet even if we ignore the fact it's the right thing to do, rather than leaving employees with no income – there is an argument that treating supply teachers (ie, their product) well is, over the long run, good for business once we start to move back to normal. That's an argument teachers may want to politely use.
Note. The above applies to supply teachers in England and Wales.
In Scotland, supply teachers on temporary fixed-term assignments/contracts will suffer no detriment in regards to pay, whereas those on short-term assignments between 1 January 2020 to 31 March 2020 will have their pay based on an average over the three-month period.
In Northern Ireland, supply teachers are directly employed by the Department for Education, which has agreed to keep paying its substitute teachers separately to the Coronavirus Job Retention Scheme.
If your employer has asked you to take leave while you're furloughed, but hasn't given you the correct notice or hasn't taken into account that you won't be able to use the leave for relaxation, you should first gather your evidence and start a conversation with your manager.
Ruby Dinsmore, employment lawyer at Slater and Gordon, said: "If, as an employee, you are facing adverse situations during Covid-19, such as caring for a vulnerable family member or self-isolating and would not be able to benefit from the fundamental purpose of taking a break, then you would be within your rights to dispute a request to take holiday.
"You should however discuss this with your employer and provide them with reasonable proof that you are self-isolating, sick or that you are looking after a family member who is ill. If you also feel the request is unfair or has not been implemented in the correct way, for example, by not receiving enough notice, raise your concerns with your manager and see if you can agree a way forward.
"If you feel uncomfortable approaching your manager or are struggling to come to an agreement, it is advised to speak with HR, and if no agreement is reached, consider raising a formal complaint. When raising any issue with your employer, it is important that you keep a record of the problems that you are facing in relation to the issue, whether in work or in your personal life, and provide proof where possible to your employer to support your claim."
Previously an employer could furlough you even if you were on a redundancy notice. This changed on 1 December 2020, and now employers can no longer furlough employees who are on a redundancy notice.
If you are made redundant, any redundancy pay that you're due should be based on your normal salary – not your furloughed salary.
Apprentices can be furloughed like normal employees. Apprentices can continue to train while they're furloughed, but they must be paid at least the relevant minimum wage for any hours spent training.
You can still get statutory sick pay from day one
If you need to take time off work due to becoming unwell from coronavirus, you'll be entitled to your usual sick leave and sick pay. For those whose employers don't offer sick pay, you might be eligible for statutory sick pay (SSP) instead. You MAY ALSO be entitled to SSP if you need to self-isolate and are unable to work from home. This includes if you've been instructed to isolated under the coronavirus contact tracing schemes – for example, after having been 'pinged' by the NHS Covid-19 app.
- How much is statutory sick pay? Statutory sick pay (SSP) currently stands at £95.85 a week. NOTE: Your employer may also offer sick pay which is worth more than the statutory amount if this is outlined in your contract.
- How do I qualify and when can I claim? To qualify, you must be employed and earn an average of at least £120 a week to be entitled to it (see full eligibility criteria). If you earn under £120/week and you already claim universal credit, log in to your online journal, update your details and your universal credit award should be boosted in line with your drop in earnings. If you're not already claiming, apply for universal credit and if you need cash urgently, request an 'advance' payment. Remember, you'll only be eligible for SPP if you're unable to work.
- SSP is payable from DAY ONE where you're ill with coronavirus and unable to work. If you are off sick for any other reason (ie, not coronavirus-related), standard rules apply and SSP will kick in from day four of being ill, not day one.
- SSP is also payable from DAY ONE if you're self-isolating and unable to work – but this must be for an official coronavirus-related reason. This includes if you have coronavirus but feel fine, or you or someone in your household has coronavirus symptoms. It also includes being told to self-isolate by a doctor, NHS 111 or via the contact tracing schemes – for example, being 'pinged' by the NHS Covid-19 app in England.
- How do I claim? SSP is paid through your employer, so you must notify them. You can claim from day one of coronavirus illness or self-isolation – though if your work normally offers more generous sick pay, you may be able to get that. If you then proceed to develop Covid-19 symptoms, or if you're unwell with another illness, you can continue to get SSP for 28 weeks.
Employers should also be flexible about requiring evidence for sick leave from employees, for example, if you're unable to provide a doctor's note due to being in self-isolation. If you're not unwell or in quarantine, but your employer asks you not to come to work, you should receive your full pay. For full help on your employment rights during the coronavirus outbreak, see the ACAS website.
Self-isolating ahead of surgery? You could also qualify for SSP. If you're told to self-isolate by a healthcare professional ahead of surgery, then you might also be eligible for SSP. It's payable from day one, but you'll need to self-isolate for at least four days prior to surgery to qualify (or three days, with surgery taking place on the fourth). The other SSP eligibility rules will also apply (ie, employed and earning at least £120/week).
The Government's no longer advises people deemed 'clinically extremely vulnerable' to coronavirus to shield and not travel into the workplace. The effect of this is that you can't use the need to shield as a reason to claim statutory sick pay - even if you still don't want to travel into the workplace but you're unable to work from home.
Looking after children and your rights at work
With schools open for the autumn term, many frazzled parents are breathing a sigh of relief. However, for those still juggling or having to deal with temporary sporadic closures due to coronavirus, here's what your rights are:
- By law, employees have the right to take time off work to help someone who depends on them in an unexpected event. However, you DON'T have a legal right to be paid for this time, though some employers may offer paid time off in this situation depending on your contract or your workplace's policy.
- There's no official limit on how much time you're allowed to take off. It just must be "reasonable" for the situation.
- Look at other options, including taking annual leave or unpaid parental leave. If you do need to spend a longer period away from work, you may also be able to book the time off as holiday, or take unpaid parental leave. Parental leave is available for employed parents who have been with their company for more than a year, and is usually limited to four weeks' leave per year, per child – though it could be extended at your employer's discretion. It's important to note that it's unpaid though.
- See if flexible working can help. You also have the legal right to ask to work flexibly as long as you've worked for your employer for at least 26 weeks, and it must consider your request and deal with it "in a reasonable manner". This could include asking to change or reduce your hours so you can look after your children.
Other employee rights during the pandemic
While it's not part of the now-closed furlough scheme, there are a few other things you need to know about your rights as an employee that are relevant, including annual leave and a tax break that's available if you need to work from home...
Normally, businesses need to make sure that their employees take at least the statutory minimum 28 days of annual leave (made up of 20 discretionary days, and time equivalent to the eight UK bank holidays).
However, the Department for Business, Energy and Industrial Strategy released emergency legislation in March 2020, temporarily allowing businesses to let employees take less than the statutory minimum number of days of leave in 2020. This is aimed at employers on the front line of coronavirus (like hospitals, supermarkets and pharmacies), to make sure they have enough staff working each day to keep providing the services the country most needs during this crisis.
The alternative would be the employer forcing its employees to take the leave they're owed because they're required to do so by law, potentially leaving them short-staffed at a crucial time.
Technically, the legislation allows all employers to let workers carry leave over into the following two years. However, just like the furlough scheme further up this guide, it doesn't force employers to do it. Your employer will decide whether it wants or needs to be more flexible with its leave policy. If you've not heard anything from your employer, ask it if it's planning to make any changes.
If your employer requires you to work at home you can claim for increased costs due to working from home, eg, heating and electricity (one estimate suggests bills are up £30/week). Clearly, right now millions are required to work at home, so this applies.
In practice, apportioning the cost is tough, so instead you can claim a £6/week rate. You can make a claim in two ways:
- Employers can pay you £6/week extra, free of tax. Yet right now, with many firms struggling, asking may be bad timing, so...
- If not, you can claim tax relief on £6 of income per week, which for basic 20% taxpayers is £1.20/week (about £60/year), and higher 40% taxpayers £2.40/week (about £125/year). You can apply directly to HMRC for this tax relief – and as long as you're claiming relief on the equivalent of £6/week for the period you worked from home, you won't have to provide evidence of the extra spending.
Sounds complicated? Don't worry, there's full info on how to claim in Martin's Working from home due to coronavirus? Claim tax back on extra costs blog – or if you're ready to claim, then you can do so via the Gov.uk website.More than TWO MILLION people have successfully claimed this tax relief since Martin first blogged about it back in October 2020.
- Required to work from home, even for ONE DAY, since 6 April 2021? You can claim tax relief from HMRC for the WHOLE TAX YEAR. It may sound too good to be true, but it's perfectly legitimate. So one day of working from home could be worth £60 or £125.
Plus, if you worked from home, even for ONE DAY, in the 2020/21 tax year, then you can backdate claim for that entire year whilst claiming for 2021/22 (so you claim for both tax years in one sitting).
- Employers can pay you £6/week extra, free of tax. Yet right now, with many firms struggling, asking may be bad timing, so...
Sadly, many have been laid off as a result of the ongoing coronavirus crisis. Unfortunately, it is likely to be difficult for many to find alternative employment, and this situation will likely get worse now that furlough has ended.
If you are (or may be) made redundant, it's vital to know your rights and to get a survival plan in place. This could include sorting your finances and making a debt audit, and making sure you're receiving all the help you're entitled to.
It's also important to know that being on furlough SHOULDN'T impact your normal statutory redundancy rights (eg, any entitlement to redundancy pay or notice). Our Redundancy Help guide takes you through all this and more, step by step.