The furlough scheme will be extended until the end of September, the Chancellor is set announce in today's Budget.
Rishi Sunak said the scheme - which pays 80% of workers' wages for hours they cannot work - would help millions through the challenging months ahead. Some 600,000 more self-employed people will also be eligible for government help as access to grants is widened.
Labour said the support schemes should have been extended months ago. There are currently about four million people who are using the coronavirus job retention scheme (CJRS) - or furlough - the highest level since last summer.
The scheme has been credited for slowing the pace of job losses as tens of thousands of businesses remain shut, with nine million people furloughed at its peak. But business groups say the chancellor has taken too long to extend the scheme in the past, creating a cliff edge for employers.
Mr Sunak must also come up with a long-term plan to pay for the schemes, which have contributed to the government borrowing some £270bn since the pandemic began. The government said furloughed employees would continue to receive 80% of current salary, capped at £2,500 a month, until the scheme ends at the end of September.
Employers will be asked for a contribution of 10% from July and 20% in August and September towards the hours their staff do not work. The chancellor will also announce that a fourth self-employment support grant will be available to claim from next month. This will be worth 80% of three months' average trading profits, capped at £7,500.
To access the grants, claimants have had to show their 2018-19 tax returns - but this has meant hundreds of thousands of newly self-employed people have been excluded from help.
As tax data for 2019-20 is now available, the government says many more workers will now be eligible for support. Mr Sunak was also due to announce details of a fifth grant today.