Apprenticeship Levy

Our Apprenticeship Levy page is to help you understand all you need to know about the Apprenticeship Levy, how it will affect your business and how to ensure that your employees have the right skill sets to benefit your business.

About the Levy

Are you classified as a levy or non-levy employer? You can get help from the government to pay for apprenticeship training.

The amount you get depends on whether you pay the apprenticeship levy or not. If your annual pay bill exceeds £3 million, you fall under the levy category.

For non-levy apprenticeship employers, you contribute only 5% towards the training and assessment costs of an apprentice. The government covers the remainder up to the maximum funding band. Payments are made directly to the training provider, with a mutually agreed payment schedule.

If you employ fewer than 50 employees, the government will pay 100% of the apprenticeship training costs up to the funding band maximum for apprentices aged:

16 to 18
19 to 24 provided they possess an education, health, and care plan from their local authority or have been under the care of their local authority.

If you exceed the funding band maximum, you’ll need to pay all the additional costs.

Find out more about funding an apprenticeship for a non levy employer.

Levy route map – How it works

Step 1

HMRC collects the levy payment monthly through PAYE

Step 2

Funds in Digital Apprenticeship Service (DAS) account. The government top-up your levy pot with a further 10% of funding

Step 3

Member of staff joins apprenticeship programme

Step 4

Apprentices receive their training and assessments

Step 5

Monthly deductions from DAS account

Step 6

Any unused levy funds expire after 24 months

Calculate what you will pay

The levy will only impact your business if you have a pay bill of over £3m, which is based on the total amount of earnings subject to Class 1 secondary employers NIC.

Each employer will have an allowance of £15,000 to offset against their levy payment and the levy will be deducted on a monthly basis, where your pay bill is over £250,000.

Use our levy calculator to calculate how much your levy payment will be for your business.

What is the company’s annual wage bill?

Please enter a amount in pounds

Examples of what you might pay

Employer A

Employer A has 250 employees, who each earn £20,000
The employer will have a pay bill of £5,000,000
The government will take 0.5% of £5,000,000 totalling £25,000
The employer receives a £15,000 allowance to offset against the levy
The total annual levy payment would be £10,000.

Employer B

Employer B has 100 employees, who each earn £20,000
The employer will have a pay bill of £2,000,000
The government will take 0.5% of £2,000,000 totalling £10,000
The employer receives a £15,000 allowance to offset against the levy
The total annual levy payment would be £0.

Frequently Answered Questions (FAQ)

Can anyone do an apprenticeship?

Apprenticeships can be used to upskill your current workforce or to recruit new employees. Apprentices cannot have a qualification above Level 4 (i.e. anyone with a degree or higher) and must have been resident in the EU for the past three years.

How much does an apprentice get paid?

Learners must be employed on a full-time basis with a minimum salary of £6.40 per hour, however you are able to offer higher wage packages if you wish.

When will employers pay?

The levy will be collected on a monthly basis, based on ‘live’ HMRC payroll data.

What happens if my pay bill is less than £3m?

There are certain employers who will be required to contribute towards the cost of their apprenticeship training outside of the levy system, such as those whose pay bill is less than £3m per tax year.

If your business fits this criteria, you will be required to co-invest a small proportion of funding towards the cost of apprenticeship training. The government will contribute a large proportion of funding, which will cover a large percentage of the costs of apprenticeships training.

If you are a non-levy-paying employer, you will still need to pay for your apprenticeship training to co-fund it but it will not be collected by HMRC, the proposals are that for every £1 the employer puts in the government matches this with £9.

Who can be an apprentice?

You can apply for an apprenticeship if you’re 16 or older, not in full-time education and live in England. If you don’t live in England you can search for apprenticeships in Scotland, Wales or Northern Ireland

EXPLORE

How to Apply Open Events Prospectus

Facilities Work for Us Contact Us

Course Search