Everything you need to know about the new vacation rules for September 1 – and how it affects your pay

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Business owners across the UK are bracing for big holiday changes next month. The government said it was cutting its contributions for the first time since March, which experts say could trigger another round of layoffs.

The Mirror reports that the move goes into effect on September 1 and will see Treasury contributions drop from 80% to 70% per employee.

This means that employers will have to pay a minimum of 10% of the salary, bringing the worker’s total monthly salary to at least 80% of his salary.

The changes follow part-time work in July and a new 5% contribution from August which includes national insurance and pension contributions.

“The job retention program was put in place to support employers who were unable to function normally due to the pandemic,” explained Alan Price, employment law expert and CEO of BrightHR .

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

“But as September approaches, employers and employees need to be aware of some additional changes to the job retention program,” he added.

Until August 1, employers could claim 80% of wages, as well as national insurance contributions and employers’ pension contributions from the treasury.

However, this month all employers were urged to start paying 5% contributions for pensions and other salary plans.

From September, the government subsidy will drop to 70% of salary, down to the value of £ 2,187.50.

“Employers will also have to continue paying employers’ national insurance and pension contributions not only for August, but also for September and October,” Price added.

“Another important detail that employers should be aware of is that once government contributions start to decline in September, employers should top up that amount to ensure that employees on leave still receive 80% of their pay until they are paid. at £ 2,500.

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

“The leave program may end on October 31, but employers still need to keep up to date with changes in its structure. “

Return to work bonus

As part of a new back-to-work bonus, the government says it will also pay employers £ 1,000 for every staff member they bring back from leave.

Speaking during his coronavirus mini-budget in July, Chancellor Rishi Sunak said companies that maintain employers until January could pocket a bonus of £ 1,000.

Sunak called the program a “job retention bonus”.

But there will be no cash bonus for the people on leave themselves.

To be eligible, employees must be paid at least £ 520 per month on average each month from November to January – the equivalent of the lower National Insurance pay limit.

Changes from September 1

From September 1, the government will pay 70% of wages up to a cap of £ 2,190.

Employers will have to pay national insurance, pension contributions and 10% of salary to bring the total to 80% (up to a ceiling of £ 2,500).

Changes from October 1

From October, the government will pay 60% of wages up to a cap of £ 1,875. Employers will have to pay national insurance contributions, pension contributions and 20% of salary to bring the total to 80% (or £ 2,500).

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