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Markel Insurances

23 Oct 2020

Job Support Scheme: What are the facts?

From November 2020, the Coronavirus Job Retention Scheme (furlough) will be replaced by the Job Support Scheme (JSS). The JSS will remain in place for six months, until May 2021.

As with the current flexible furlough scheme introduced by the Government in July 2020, under the new JSS, where employers are able to offer employees some work, but reduced working hours, employers will receive a grant from the Government towards employees’ wages in respect of their normal hours which are unworked, with the employer topping up a percentage of the unworked hours.

In response to the economic impact on businesses of increased coronavirus restrictions, on 22 October, the Chancellor announced significant changes to the JSS and increased financial support for impacted employers. These announced changes will apply when the JSS commences in November.  When the JSS was originally announced on 24 September, the JSS required employees to work a minimum of 33% of their normal hours. This minimum threshold has now been reduced to 20% of normal hours.

Additionally, the required minimum employer contribution to the unworked hours has been significantly reduced from 33% (as originally announced) to 5%, with the Government JSS grant now increased to 61.67% of wages for normal hours not worked, rather than restricted to a third of unworked hours, as previously announced. The cap to the Government grant towards unworked hours has been increased to £1541.75 per month, based on UK median income (previously, the cap on the Government grant for unworked hours was £697.92 per month). 

The Government has published a factsheet, outlining the key elements of the JSS for businesses that remain open (‘the Job Support Scheme Open’). The factsheet contains 2 worked examples where an employee is working 20% of their normal hours under the JSS. The Government has published a another factsheet outlining the extension to the JSS announced on 9 October for businesses that are temporarily required to close due to local or national coronavirus restrictions in any of the four UK nations (this extension to the JSS has now been renamed as ‘Job Support Scheme Closed’).

HMRC has also published a policy paper explaining the details of the JSS.

Key features of the Job Support Scheme Open (JSS Open)

The outline of the JSS Open is as follows:

  • Employees must be working at least 20% of their normal hours and must be paid for that work, by their employer.  The Government has said it will consider whether to increase this minimum hours threshold after January 2021.

  • The Government will reimburse employers 61.67% of the employee’s unworked hours based on their “usual wages” (up to a capped amount of £1541.75 per month) via the JSS grant.  The employer will pay 5% of the employee’s unworked hours which they would otherwise normally work (capped at capped at £125 per month), in addition to paying the employee for their worked hours. Employers can top up employee’s wages above the 5% contribution, should they wish to do so.   Employees will receive at least 73% of their normal wages under the JSS (or the capped amount, if lower) if working the minimum amount of 20% of their usual hours, with the Government grant set at a maximum of 48% of the employee’s wages in this scenario, reducing on a sliding scale depending on the percentage of normal hours an employee works (with the cap applying). 

  • The JSS grant will not cover Class 1 employer NICs or pension contributions.  These contributions remain payable by the employer.

  • Employees can be taken on and off the JSS. Employees do not have to be working the same pattern each month, but each short-time working (reduced hours) arrangement must cover a minimum period of seven days.

  • The JSS grant will not cover any notice pay for the employee’s contractual or statutory notice period or redundancy pay.

  • Employers using the JSS will also be able to claim the Job Retention Bonus, which is a one-off bonus of £1,000 for each previously furloughed employee who is still employed as of 31 January 2021, where they meet the eligibility criteria.

Reference salary

Under JSS Open, employers can claim the JSS grant towards their employees’ wages up to a maximum of £1,541.75 per month, depending on how many hours they work.   Employers cannot claim for employees’ wages for any time they spend working for the employer.  Claims are subject to a maximum reference salary of £3,125 per calendar month. 

The following guidance sets out how the employee’s reference salary should be calculated for claiming the JSS grant. The method for calculating the reference salary varies depending on whether the employee has fixed or variable pay and fixed hours or variable hours under their original employment contract.

As with the previous Coronavirus Job Retention Scheme, the wage elements employers should include in the employees’ reference salary is made up of the regular payments the employer is contractually obliged to make, including:

  • regular wages

  • non-discretionary payments for hours worked, including overtime

  • non-discretionary fees

  • non-discretionary commission payments

  • piece rate payments

The reference salary cannot include:

  • payments made at the discretion of the employer or a client, where the employer or client was under no contractual obligation to pay them, including:

  • any tips, including those distributed through troncs

  • discretionary bonuses

  • discretionary commission payments

  • non-cash payments

  • non-monetary benefits like benefits in kind (such as a company car) and salary sacrifice schemes (including pension contributions) that reduce an employees’ taxable pay

Reference salary for employees with fixed pay

For employees who are paid a fixed salary, the reference Ssalary is the greater of:

  • the wages payable to the employee in the last pay period ending on or before 23 September 2020

  • the wages payable to the employee in the last pay period ending on or before 19 March 2020.  This may be the same salary calculated under the CJRS scheme

Reference salary for employees with variable pay

For employees whose pay is variable, the reference salary is the greater of:

  • the wages earned in the same calendar period in the tax year 2019 to 2020

  • the average wages payable in the tax year 2019 to 2020

  • the average wages payable from 1 February 2020 (or the employee’s start date if later) until 23 September 2020

Usual hours

There are different calculations for working out an employee’s usual hours depending on whether these are fixed or variable hours:

Employees who work fixed hours

For employees contracted for a fixed number of hours and whose pay does not vary according to the number of hours they work, usual hours are calculated based upon the greater of:

  • the hours that the employee was contracted for at the end of the last full pay period ending on or before 23 September 2020

  • the hours that the employee was contracted for at the end of the last full pay period ending on or before 19 March 2020.  This may be the same number of hours calculated under the Coronavirus Job Retention scheme

The Reference Salary should include hours paid as annual leave and statutory leave.

Claim Periods

Employers will be able to make a claim for the JSS grant online through from 8 December 2020.  Claim periods can start from 1 November 2020 onwards.  The JSS grant payment will be made in arrears.   Agents who are authorised to submit PAYE online for employers will be able to claim the JSS grant on their behalf. The whole of the grant must be used to cover employee costs.  Employees will be able to check if their employer has made a JSS claim relating to them via their Personal Tax Account via

HMRC guidance states that claims should commence from the later of the date that the employee starts working reduced hours or the date when working reduced hours (i.e. the short time working agreement under the JSS) is confirmed in writing, not the date from when the decision is made to place the employee on reduced hours under the JSS.

The Job Support Scheme Closed (JSS Closed)

On 9 October, the Chancellor announced an extension to the Job Support Scheme, to begin on 1 November and to remain in place for six months (with a review in January 2021). The extension to the JSS, now renamed, ‘the Job Support Scheme Closed’ to distinguish it from the ‘Job Support Scheme Open’, which applies to businesses which are not required to close, will apply across the UK.

The extension applies to any business legally required to close their premises due to local or national coronavirus restrictions that apply in the UK, whose employees primary work place is at the premises that have been legally required to close  and includes premises restricted to delivery or collection-only services from their premises. In that situation, the Government will pay a grant equating to two-thirds (67%) of their eligible employees’ normal pay, up to a maximum of £2,100 per month. Under the ‘Job Support Scheme Closed’, employers are not required to contribute towards employees’ wages during the claim period and will only be required to pay employee National Insurance Contributions and automatic enrolment pension contributions.

Businesses will only be eligible to claim the grant while they are subject to local or national coronavirus restrictions, which require their businesses to temporarily close. For this reason, businesses will not be eligible for the JSS grant where a business chooses to temporarily close, but where there is no legal requirement to do so, or where the business temporarily closes as required by local public health authorities due to a coronavirus outbreak.  To be eligible for the Job Support Scheme Closed, employees must be instructed to temporarily cease all work due to the restrictions and must remain off work for a minimum of seven consecutive days.  In other words, this extension to the JSS does not apply to employees who are carrying out some, but reduced work due to coronavirus restrictions.  Those employees may be eligible for the Job Support Scheme Open set out above.

In line with the rest of the JSS, payments to eligible businesses will be made monthly in arrears through the online portal from 8 December 2020.  Businesses that have been required to close by law in the period prior to 1 November may be eligible for a grant towards their furloughed employees’ wages via the Coronavirus Job Retention Scheme (CJRS) where those employees have been previously furloughed for at least the three-week minimum period prior to July 2020 and meet the other eligibility requirements of the CJRS. 

Who will be eligible for the JSS?


Employers with a UK bank account and a UK PAYE scheme can claim the JSS grant. The employer does not need to have previously used the Coronavirus Job Retention Scheme, i.e. furloughed staff.

All small and medium-sized businesses are eligible to apply. They do not need to show that their income has fallen. Larger businesses  (with 250 or more employees)  are eligible only where they are able to demonstrate to HMRC via a Financial Impact Test, based on their VAT returns (if VAT registered), that their turnover has fallen due to the coronavirus pandemic.  The Government has stated that it “would expect” that large employers using the JSS will not be making capital distributions, such as dividend payments or share buybacks, whilst accessing the grant, although it will not make this a condition of using the JSS.

Government guidance states that, as was the case with the Coronavirus Job Retention Scheme, fully publicly funded organisations are “not expected” to use the JSS, but partially publicly funded organisations are eligible where their private revenues have been disrupted and may claim the JSS grant for the proportion of their revenue disrupted due to coronavirus.


An individual is an employee for the purposes of the JSS if they are treated as an employee for Income Tax purposes.

Employees can be on any type of contract, including zero hours or temporary contracts.  Employees will need to have been employed and on the employer’s PAYE payroll as of 23 September 2020.   A Real Time Information (RTI) submission notifying payment to that employee to HMRC must have been made at some point between 6 April 2019 and 23 September 2020. New staff who were recruited or paid for the first time after 23 September 2020 will therefore be ineligible for the JSS. If employees ceased employment after 23 of September 2020 and were subsequently rehired, then employers can claim for them.

The employee must not be on a redundancy notice. In other words, employees who are already serving their redundancy notice period will be ineligible for the JSS.  Employees who are made redundant whilst the employer is claiming the JSS grant will presumably need to be taken off the JSS for the redundancy notice period and the employer will need to pay the notice pay.

How should employers prepare for the JSS?

Where the JSS is suitable for the employer’s and employee’s circumstance, employers should consider moving any staff who are currently furloughed under the Coronavirus Job Retention Scheme to the new JSS in November. 

This is likely to require a further temporary variation of contract (given, for example, that under the JSS employees are entitled to receive the slightly reduced minimum amount of 78% of their normal pay (as capped) (or 73% if working the minimum 20% of normal hours) in contrast to the existing furlough scheme, whereby employees are entitled to receive at least 80% of their normal salary (capped). 

Accordingly, it is likely that employees will need to be issued with new amended temporary terms and conditions of employment where they will receive reduced salary under the JSS, or where there is a change to any other terms and conditions. 

The Treasury factsheet states that employees should be notified of any contractual changes as a result of short-time working under the JSS in writing. The temporary agreement must cover at least seven consecutive days. The employer must keep a written record of the agreement for five years in case HMRC requires sight of it. Employers using the JSS must also keep records of how many hours employees work and the number of usual hours they are not working.  HMRC will publish further guidance on what to include in the written agreement by the end of October.  A template ‘Short Time Working Agreement under the Job Support Scheme’ based on the JSS details published to date is available on Law Hub.

What if employers cannot guarantee employees at least 20% of their normal hours of work, or cannot contribute the minimum 5% of wages for unworked hours?

Employers may need to consider redundancies where there is no work available, or where the JSS is not suitable for their circumstances, either due to the requirement to provide employees with a minimum of 20% of their normal working hours during the JSS claim period, or because employers are not in a financial position or do not wish to pay the employee 5% of their unworked hours, in addition to paying their salary for their worked hours (albeit that the employer contribution towards unworked hours is significantly reduced compared to the JSS as originally announced).

Where employers wish to retain their staff in employment in these circumstances, employers may be able to agree with their staff periods of unpaid leave, or short-term working (i.e. working on reduced hours for reduced salary), or part-time working outside the JSS.

Will employees be entitled to pay for annual leave based on their normal hours of work, rather than reduced hours worked under the JSS?

Yes, in respect of statutory holiday pay (and contractual holiday pay, unless renegotiated) where the employee is employed on a contract with guaranteed minimum hours, in contrast to a contract with no fixed hours (such as a ‘zero-hour’ contract).  This is because statutory holiday pay is generally based on the employee’s “normal remuneration” i.e. their normal working hours, rather than reduced working hours under the JSS. 

For further advice about furlough and the government’s economic response to COVID-19, please contact Hannah Thomas or call us on 0371 705 4006.

Our COVID-19 Hub contains a range of information and resources to best support our clients during this difficult time. To receive the latest news and insights by email sign-up here.

This page will be regularly updated as new information becomes available.

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