Funding and the apprenticeship levy

In an effort to meet the government target of 3 million apprenticeship starts by 2020, the way apprenticeships are funded in the UK has changed.

Employer with a wage bill in excess of £3m, you are required to contribute to the Apprenticeship Levy.

Levy-paying employers

  1. Your total levy payment = 0.5% of your total payroll bill (less a £15,000 levy allowance). You then receive the same amount back in the form of digital vouchers.
  2. The government will apply a 5% top-up to your levy fund each month.
  3. You pay 100% of the cost of the apprenticeship(s) using your digital vouchers.
  4. You'll need to register for an Apprenticeship Service (AS) account. This online tool allows you to:
    • Choose the apprenticeship framework/standard
    • Choose the training provider(s)
    • Choose an assessment organisation
    • Post apprenticeship vacancies
    • Track the funding you have spent and have available
    • Set the price agreed with their chosen provider
    • Pay for the apprenticeship training and assessment
  5. Negotiate a price with your chosen provider(s) and pay 100% using your digital vouchers.
  6. Hire your apprentice(s)!

Non-levy paying employers

  1. You do not have to pay anything towards the apprenticeship levy.
  2. You do not need to register for an Apprenticeship Service account to arrange and pay for your apprenticeship training.
  3. Instead, choose your training provider(s) and work with them to:
    • Choose the apprenticeship framework/standard
    • Agree a price for the apprenticeship training and assessment
  4. Use the ‘Co-Investment Scheme’ to pay for your apprenticeship. After negotiating a price with your chosen provider(s), you will have to pay 5% and the government will pay the other 95%.
  5. Hire your apprentice(s)!

Additional funding opportunity for small employers

If you have less than 50 employees and you employ an apprentice aged 16-18 years old, then the apprenticeship is fully funded by the government.