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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Companies fall into two categories: levy-payers (who pay into the pot) and non-levy payers (who do not).

Levy payers

Non-levy payers

Pay bill over £3million

Pay bill under £3million

All Apprentice Frameworks and 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 company’s UK pay bill is above £3 million per year your business will pay 0.5% of your payroll into the apprenticeship levy on a monthly basis, and so will be a levy payer.

Your levy is collected through the PAYE system. With the funds set aside in your business’ apprenticeship service account, you can pay for apprenticeship training and assessment costs. Funding applies up to the funding band maximum for that apprenticeship and for apprentices that work at least 50% of the time in England.

For more information on Apprenticeship funding: how it works.

Non-levy payers

If your company’s payroll is below £3 million per year then your company will not pay into the levy. Non-levy paying employers can still send their staff on an apprenticeship and share the cost of training and assessing their apprentices with the Government – this is called ‘co-investment’.

The company will pay 10% towards the cost of apprenticeship training and the Government will pay the other 90%, 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.