The move, first reported by the Mail on Sunday, means unvaccinated UK workers who are forced to isolate could now be only entitled to the Statutory Sick Pay (SSP) minimum of £96.35 a week during 10 days of isolation - compared with weekly pay of more than £400 for an average shop floor.
Managers at the furniture retailer, which employs 10,000 staff in the UK, said they will consider mitigating circumstances, including pregnancy or other medical grounds.
People in England who have had at two doses of the vaccine are not required to self-isolate if they have been in close contact with someone infected with Covid-19.
But unvaccinated people who are contacted through the government’s test-and-trace system must, by law, self-isolate.
An IKEA spokesperson said: “Since the start of the pandemic, the health and safety of our co-workers has been our highest priority. Since then, IKEA has been working with a separate absence addendum, which is regularly reviewed in line with changes to government guidance.
"Following the vaccine roll out and changes in the government’s isolation requirements, our approach to Covid-related absences evolved from the 20 September 2021 – an approach developed with our social partners and national co-worker committee.
“Fully vaccinated co-workers or those that are unvaccinated owing to mitigating circumstances which, for example, could include pregnancy or other medical grounds, will receive full pay.
“Unvaccinated co-workers without mitigating circumstances that test positive with Covid will be paid full company sick pay in line with our company absence policy. Unvaccinated co-workers without mitigating circumstances who have been identified as close contacts of a positive case will be paid Statutory Sick Pay.
"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.”
Ikea is not the first company to put up barriers for unvaccinated staff.
Coronavirus: What you need to know
Virgin Atlantic announced last year it will not hire new cabin crew or pilots who are not fully vaccinated against coronavirus while Hungarian carrier Wizz Air, which serves 11 UK airports, has required its flight crews to be vaccinated by December.
Construction, building and transport workers are among those least likely to have received a booster or third dose of Covid-19 vaccine, Office for National Statistics (ONS) figures figures suggest.
An estimated 39.8% of employees in skilled construction and building trades in England have had an extra dose, along with 42.6% of plant and machine operatives and 43.9% of transport and mobile machine drivers and operatives.
Occupations with the highest take-up were health professionals at 75.3%, health and social care associate professionals at 58.7%, and those working in secretarial and related jobs at 58.4%.