As furlough ends, Job Support Scheme complicates payroll even more

payroll outsourcing
By Alan Gregory | 8th October 2020 | 14 min read

Furlough has created a cluster of new complexities for businesses in the way they handle their payroll, but its sequel, the Job Support Scheme is set to add further challenges.

UK businesses have had to grapple with the rather alien concept of furlough, which arose from the Government’s Coronavirus Job Retention Scheme.

While many may have been expecting some breathing space when furlough ends on 31 October, they now have a whole new scheme to learn, understand, and implement.

Chancellor Rishi Sunak’s new Job Support Scheme has been compared to European-style wage subsidy schemes and, like its predecessor, aims to prevent or minimise redundancies.

But again, it’s a whole new programme for organisations to get to grips and comply with.

How will the Job Support Scheme work?

Employers can scale down the time an employee works all the way to one third of their normal hours. The employer pays for the time worked. 

The Government will pay a third of hours not worked up to a £697.92 monthly cap, with the employer also contributing a third. This will ensure employees earn a minimum of 77% of their normal wages, where the Government contribution has not been capped.

How do firms make a claim?

The Government will issue grant payments in arrears, reimbursing the employer for the Government’s contribution. The grant will not cover Class 1 employer NICs or pension contributions, although these will remain payable by the employer.

Firms will be able to make a claim online through from December 2020. They will be paid on a monthly basis.

Is there a Job Support Scheme calculator?

Many business leaders will feel the scheme is another compliance headache. There is a substantial amount of detail to digest, and then many subsequent decisions to make and tasks to execute, in order to be ready in time. Yet, it’s only weeks away.

The good news is IRIS has launched a Job Support Scheme calculator.

This helps businesses find out how much they can claim back based on the Government’s scheme. Simply input your employees’ regular monthly gross wage, their regular monthly hours, and the hours they will now be working.

The calculator will show the amount the employers will need to pay for the reduced hours worked and the Government contribution.

Time to turn to outsourcing for your payroll?

With the Job Support Scheme and so many changes to payroll legislation this year, many finance and HR directors may be reconsidering how they run their payroll right now, with the added weight of this new scheme.

IRIS can help by taking the strain while you focus on your business. With over 40 years of experience in running payroll, IRIS can help transform your business operations with IRIS Managed Payroll.

Visit our calculator to get greater insight. There you will also be able to request a no obligation quote for payroll outsourcing and see how much you can save.