The furniture retailer said that workers who have not had the vaccine will receive only statutory sick pay of £96.35 a week if they need to self-isolate due to exposure to Covid.
The new sick pay rate has been compared to the £400 wage packet for those who work 40-hour weeks at Ikea.
The company said that unvaccinated employees who test positive for Covid will receive full company sick pay, which is higher than the statutory level.
Whereas those who are vaccinated- or unvaccinated due to mitigating circumstances- will receive full pay if they are off for either testing positive or if they need to self-isolate.
An Ikea spokesperson told The Mail on Sunday: 'We know this is a highly emotive topic and we appreciate there are many unique circumstances.
‘As such, all will be considered on a case by case basis.’
The news comes as Wessex Water revealed that they would be taking similar action from this week.
Wessex Water stated that any employee who has not had at least one Covid jab -without a medical exemption- or does not have a confirmed appointment to receive the jab would only receive statutory sick pay if they need to isolate.
The company has stated that absences due to Covid had doubled with almost 4% of the workforce affected in the last week alone.
Santander and Asda have also encouraged employees to get their coronavirus jabs, offering time off for those who need to get their vaccinations.
Last month, the self-isolation period was reduced from 10 days to seven if those isolating received a negative test result on days six and seven.
Under English law, those who have had at least two doses of the Covid vaccine do not need to self-isolate if they have been in contact with someone who has tested positive.
This rule only applies if the vaccinated individual is showing no symptoms of the virus and has received a negative Covid test.
Anyone who has not been vaccinated and has been contacted via the NHS test-and-trace service is legally obliged to self-isolate.