The Apprenticeship Levy

Make the Apprenticeship Levy work for you.

The UK Government wants more people going into apprenticeships – 3 million by 2020 to be exact. There’s been a big push to emphasize the benefits of hiring apprentices, but the biggest draw has been the wallet. There are various ways to fund an apprenticeship, depending on the size and scale of your company, but no matter if you’re an independent, 3 person store or a multi-million-pound company; there are funding options for you.

The information below is for England only. Scotland, Northern Ireland and Wales have their own funding arrangements; however an estimated £0.5 billion raised through the levy will be distributed to these governments. If an employer has offices that cover one or more of these nations, then the percentage of funding is equal to the percentage of staff employed in England. 60% of staff in England means 60% of the levy payment.

Levy Underspend 2017-18
Employers who don't fully understand the levy

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Don’t qualify for the levy?

If your salary bill is less than £3 million then you are eligible to receive 95% government funding for the apprenticeship, meaning the company only has to pay the remaining 5%.

This makes hiring an apprentice a cost effective solution no matter the size of the company. As an additional incentive to small businesses, any company with less than 50 employees hiring an apprentice aged 16-18 will be 100% government funded, and will also receive a £1000 payment.

First for Apprenticeships

Apprentices can

The Apprenticeship Levy fully explained

Need an example? Got you covered!

300 employees with a gross salary of £21,000

Salary Bill:
Employer Pays:
Funds Available:

300 x 21,000 = 6,300,000
0.5 x 6,300,000 = 31,500
31,500 – 15,000 = 16,500
16,500 + 10% = 18,150

In April 2017 the apprenticeship levy was introduced. Requiring all employers with salary bills of over £3 million to pay 0.5% of said salary bill into a dedicated fund; the levy can only be spent on apprenticeship training – with new or existing staff.

The payments are collected by HM Revenue and Customs on a monthly basis, and are done automatically through PAYE. Employers are able to access funding through an online account. From the time of payment, the employer has 24 months to spend it before they expire and are absorbed by the government.

To further encourage the use of this levy, the Government will offset the levy by £15,000, and will grant a 10% top-up, meaning for every £1 put in, employers can draw out £1.10.

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