The Job Retention Bonus
Make sure your employees are paid the minimum income threshold to be eligible for the £1,000 Job Retention Bonus.
For employers to claim the £1,000 Job Retention Bonus for each employee that is still employed since being furloughed, they must be paid at least £1,560 of taxable pay in the three tax months between 6 November and 5 February. They must also be paid at least one payment of taxable earnings in each of those three periods.
What is The Job Retention Bonus?
The Job Retention Bonus is a £1,000 one-off payment that will be made to employers for each eligible employee that was furloughed and then kept continuously employed until 31 January 2021.
The bonus can be claimed between 15 February and 31 March 2021 and does not need to be paid to the employee.
Can I claim the bonus?
You can claim the bonus if you made an eligible claim under the Coronavirus Job Retention Scheme for any of your employees that were furloughed and are still in your employment.
If you make a claim for the same employee through the new Job Support Scheme you can still claim the bonus.
Which employees can I make a claim for?
You can make a claim for all employees that you made an eligible claim for under the CJRS and you kept continuously employed from the last claim you made for them until 31 January 2021.
They must not be serving a notice period on 31 January 2021 – including anyone serving a notice of retirement.
Finally, they must have been paid enough taxable earnings in each relevant tax month to meet the minimum income threshold.
What is the minimum income threshold?
Your employees must be paid a total of at least £1,560 (gross) for the tax months to 5 December 2020, 5 January 2021 and 5 February 2021.
This total is taxable pay, in other words, the amount that is subject to tax after any relief for salary sacrifice schemes or pension contributions.
Employees must have received a taxable payment in each of the three tax periods from 6 November to 5 February.
The minimum income threshold applies despite how often you pay your employees and also applies if your employee’s income has reduced in the tax periods due to circumstances such as being on statutory leave.
HMRC will check the minimum income threshold has been met by checking the Real Time Information (RTI) submitted through the Full Payment Submissions.
How do I know if an employee’s pay counts towards the minimum income threshold?
Only taxable payments will count towards the minimum income threshold. Taxable pay can include, amongst others, payments such as:
- Wages and salaries
- Statutory pay
- Bonuses and commissions
- Holiday pay
- Payments for time spent travelling
- Medical and maternity suspension payments
The payments included in the minimum income threshold are those after salary sacrifice schemes, for example, childcare vouchers, cycle to work schemes, or additional pension contributions.
Minimum Income Threshold Examples
|Bob usually earns around £1,800 each month but was off sick and receiving Statutory Sick Pay (SSP) for several weeks, including the whole of December. His pay in the relevant tax periods was:|
· 6 November to 5 December 2020 – £1,500
· 6 December 2020 to 5 January 2021 – £383.40
· 6 January to 5 February 2021 – £1,750
SSP counts as taxable earnings, so Bob received a payment of taxable earnings in each relevant tax period. The total taxable pay was £3,633.40. This exceeds the minimum income threshold of £1,560. The company can claim the Job Retention Bonus in respect of Bob.
|Charlotte works part time variable hours for £10 per hour, paid on the last day of each month. She is a member of the company pension scheme and makes 5% contributions under a net pay arrangement. Charlotte was paid for 50 hours in November and 55 hours in December and January.|
The total gross pay was £1,600 across the relevant tax periods, however the effect of the pension deductions mean that her pay in those periods was:
· 6 November to 5 December 2020 – £475
· 6 December 2020 to 5 January 2021 – £522.50
· 6 January to 5 February 2021 – £522.50
Charlotte received a payment of taxable earnings in each relevant tax period but the total taxable pay is £1,520. This is less than the £1,560 minimum income threshold so the company cannot claim the Job Retention Bonus in respect of Charlotte.
|Frans works full time, with a monthly salary of £4,000 paid on the last day of each month, he takes a month of unpaid leave every December to visit family overseas. His pay in the relevant tax periods was:|
· 6 November to 5 December 2020 – £4,000
· 6 December 2020 to 5 January 2021- £0
· 6 January to 5 February 2021 – £4,000
Frans did not receive a payment of taxable earnings in each of the relevant tax periods even though the total taxable pay was £8,000 and exceeds the minimum income threshold of £1,560. The company cannot claim the Job Retention Bonus in respect of Frans.