Levy and funding

The apprenticeship levy is a pot of money some companies pay into, but which all businesses have access to spend on the training costs of apprenticeships.
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Employers have access to the levy – a pot of money held by the Government, which is used to pay for apprenticeship training. Employers large and small can draw on this fund to co-finance an apprentice. 

Organisations fall into two categories: levy-payers and non-levy payers.

Levy payers

Non-levy payers

Pay bill over £3 million

Pay bill under £3 million

All Apprentice Standards are all assigned a funding band by the Government – these funding bands are the maximum amount the Government will fund via the levy towards a given apprenticeship.

Levy payers

If your organisation’s UK pay bill is above £3 million your business will pay 0.5% of your payroll into the apprenticeship levy on a monthly basis. 

These funds are placed in your business’ apprenticeship service account and can be used on training and assessing apprentices. If you have unused apprenticeship funds, you can transfer up to 25% of them to another employer using the apprenticeship service. 

For more information on Apprenticeship funding: how it works.

Non-levy payers

If your organisation's payroll is below £3 million per year then your company will not pay into the levy. As an employer that doesn’t pay the apprenticeship levy, you pay just 5% towards the cost of training and assessing an apprentice. The Government will pay the rest up to the funding band maximum. 

Small employer co-investment waiver

The UK Government will pay 100% of the training costs if you are an employer with fewer than 50 people working for you – and you train either 16-18-year-old apprentices or 19-24-year-olds who were formerly in care or who have an education and Health and Care Plan. Provided the training bill is under the funding band maximum, your company will not have to make a financial contribution.

Your next steps

How does a business start to offer apprenticeships? How does it all work? Our dedicated Apprenticeship Team can also support you along the way, from advertising your vacancy to shortlisting applicants who meet your business needs.