The Levy and Funding

In April 2017 the Apprenticeship Levy was introduced for employers operating in the UK who have annual pay bills of over £3 Million.

Currently the levy is charged at 0.5% of your annual pay bill but just in case you need some info on it then below is some of the info you need.


When you need to pay it

  • If you are an employer who has an annual pay bill of over £3 Million

  • If you are connected to other companies or charities which in total have a pay bill of over £3 million

Your annual pay bill is all payments to employees that are subject to employer Class 1 secondary National Insurance contributions (NICs) such as wages, bonuses and commissions. You must include payments to:

  • all employees earning below the Lower Earnings Limit and the Secondary Threshold

  • employees under the age of 21

  • apprentices under the age of 25

For up to date information on the Levy and all the details then click on the button below to be taken directly to the government information.

What if you don't have a pay bill of of over £3 Million?

Then you will be classed as a Non-Levy Payer and don't worry , you will still get funding for an apprenticeship. Even though you wont be paying the levy, the way apprenticeships are funded will change as from May 2017.

From may 2017, the government will have a funding band allocated to each apprenticeship and that funding band have a maximum amount of funding that the government is prepared to pay towards your apprenticeship training.

Currently this is 95% of the agreed price up to the maximum funding cap for training and assessment, and you as the employer will pay the remaining 5%. If the training you want is higher than the maximum funding cap then you will be required to pay in full the difference.

Do you have less than 50 employees? 
Employers with fewer than 50 workers will benefit from 100% of the apprenticeship training costs (up to the maximum funding cap) if the apprentice is between 16 and 18 years old or an 19 to 24 year old apprentice who was formerly in care or has a Local Authority Education, Health and Care plan.

Additional Support for Small Employers (Under 50 employees)

16-18 Year old Incentive

  • If you take on an apprentice who is aged between 16-18 or aged 19 to 24 who have previously been in care or who have a Local Authority Education, Health and Care plan, you as a small employer you will receive an extra £1,000 towards the extra costs of supporting them. This will be paid to employers in two equal instalments at 3 months and 12 months from the training provider.

AGE Grant (AGE will only apply to apprentices starting before 1 August 2017) 

  • The Apprenticeship Grant for Employers of 16- to 24-year-olds (AGE 16 to 24) supports businesses that would not otherwise be in a position to recruit individuals aged 16 to 24 into employment through the apprenticeship programme.

  • If you are an eligible employer you can receive £1,500 for each eligible apprentice (up to five in total), where you have not employed an apprentice in the previous 12 months.

  • AGE can only be claimed for a non-levy-paying employer with fewer than 50 (49 or fewer) employees who would not otherwise be in a position to recruit an apprentice aged 16 to 24 at the start of their apprenticeship, into employment through an approved apprenticeship framework.