Do employers have to pay national insurance contributions for furloughed employees?

Yes, employers must pay national insurance contributions (NICs) on the wages that they pay to furloughed employees.

Employers can make a claim to HM Revenue and Customs (HMRC) under the Coronavirus Job Retention Scheme to recover 80% of the wage costs of furloughed employees, up to £2,500 per month. Until 1 August 2020, the employer could also claim for the NICs it pays on this reduced wage.

If an employer tops up an employee's wages from the 80% or £2,500 per month, it cannot include the NICs paid on the additional amount in its claim to be reimbursed by HMRC.

For claim periods starting on or after 1 August 2020, employers can no longer claim for NICs or minimum pension contributions under the scheme.

HMRC has published guidance on calculating a claim for employer NICs, which includes example calculations. The guidance explains how claims must be adjusted if the employer claims the employment allowance.