Apprenticeship Levy Explained

The apprenticeship levy was introduced in 2017 as a way of helping employers to fund more apprenticeships. It was introduced to benefit businesses by boosting critical training and developing apprenticeship programmes.

The rules state that employers with a payroll of more than £3 million must pay a 0.5% levy on their total payroll (calculated on the percentage of workers based in England). The levy is paid at the end of every month through PAYE alongside income tax and national insurance contributions.

Levy contributions are held in a digital account which can be used by the employer to arrange and pay for apprenticeship training. The funds can only be spent on apprenticeship training or End-point Assessment according to apprenticeship levy rules. This is only applicable within England and therefore, apprentices funded by the levy must work at least 50% of their time within England. After 24 months, any unused funds are returned to the government.

Small Business Levy Funding

If your business pays less than £3 million in payroll each year, the government will cover 95% of the costs of your Apprentice’s training. Your business can use this on apprenticeships and funded training programmes. The price of apprenticeship training is set by the government.

Each Apprenticeship Standard has been created and validated with industry experts, and priced according to factors such as the duration, resources required and qualification level of training.

However, as an employer, you’ll only need to contribute a maximum of 5% of the fees.

You may also be able to access additional apprenticeship grants. This makes these high-quality courses accessible to all.