The Job Retention Bonus is a £1,000 one-off taxable payment to you (the employer), for each eligible employee that you furloughed and kept continuously employed until 31 January 2021.

You will be able to claim the bonus between 15 February 2021 and 31 March 2021.

You do not have to pay this money to your employee. 

HMRC will issue updated guidance by the end of January 2021 with details on how to access the online claim service on GOV.UK.

You cannot claim the Job Retention Bonus until 15 February 2021.

Who Can Claim?

You can claim the bonus if you have furloughed employees and made an eligible claim for them through the Coronavirus Job Retention Scheme (CJRS). Your employee must have been eligible for the CJRS grant for you to be eligible for the bonus. You can still claim the bonus if you make a claim for that employee through the Job Support Scheme. Guidance on the Job Support Scheme will be published soon.

Employees you can claim for

You can claim for employees that:

  • you made an eligible claim for under the CJRS
  • was continuously employed from the end of the claim period of your last CJRS claim for them, until 31 January 2021
  • are not serving a contractual or statutory notice period for you on 31 January 2021 (this includes people serving notice of retirement)
  • you paid enough an amount in each relevant tax month and enough to meet the Job Retention Bonus minimum income threshold
  • If HMRC are still checking your CJRS claims, you can still claim the Job Retention Bonus. However your payment may be delayed until those checks are completed.

HMRC will not pay the bonus if you made an incorrect CJRS claim and your employee was not eligible for the Coronavirus Job Retention Scheme.

Claiming for an individual who’s not an employee 

You can claim the Job Retention Bonus for individuals who are not employees, such as office holders or agency workers, as long as you claimed a grant for them under the CJRS and the other
Job Retention Bonus eligibility criteria are met.

The minimum income threshold

To be eligible for the bonus you must make sure that your employees have been paid at least the minimum income threshold. To meet the minimum income threshold you must pay your employee a total of at least £1,560 (gross) throughout the tax months:

  • November 6 to December 5 2020
  • December 6 2020 to January 5 2021
  • January 6 to February 5 2021

You must pay your employee at least one payment of taxable earnings (of any amount) in each of the relevant tax months.

The minimum income threshold criteria apply regardless of:

  • how often you pay your employees
  • any circumstances that may have reduced your employee’s pay in the relevant tax periods. Such as being on statutory leave or unpaid leave.

What payments are included in the minimum income threshold?

Only payments recorded as taxable pay will count towards the minimum income threshold. Taxable pay is reported to HMRC as a single figure through Full Payment Submissions via Real Time Information (RTI).

If you make redundancies, you must comply with the normal rules for redundancy, which include using fair redundancy criteria. These rules apply even if this means that fewer of your employees are eligible for the Job Retention Bonus.

Preparing to Make a claim

You must:

  • still be enrolled for PAYE online
  • comply with your PAYE obligations to file PAYE accurately and on time under Real Time Information (RTI) reporting for all employees between 6 April 2020 and 5 February 2021
  • keep your payroll up to date. Ensure you report the leaving date for employees that stop working for you before the end of the pay period
  • use the irregular payment pattern indicator in Real Time Information (RTI) for any employees not being paid regularly
  • comply with all requests from HMRC to provide any employee data for past CJRS claims

Tax Treatment of the Job Retention Scheme

You must include payments you receive under the scheme as income when you calculate your taxable profits for Income Tax and Corporation Tax purposes. Businesses can deduct employment costs as normal when calculating taxable profits for Income Tax and Corporation Tax purposes.

Individuals with employees that are not employed as part of a business (such as nannies or other domestic staff) will not have to pay tax on grants received under the scheme.

When will the scheme end?

You will have until 31 March 2021 to make a Job Retention Bonus claim after which the scheme will close. No further claims will be accepted after this date.

You will not be able to claim until 15 February 2021. Guidance will be updated by the end of January 2021 with details on how to access the online claim service.

If we do your payroll we will be able to claim the Job Retention Bonus on your behalf. Please contact us for more information.