Apprenticeship Funding Options

From May 1st, 2017, the way Apprenticeship training is funded is changing. The new apprenticeship funding system puts employers in the driving seat and allow more control designing, choosing and paying for apprenticeships.

Apprenticeship Levy

This will only apply to employers with a pay bill in excess of £3million and will be charged at a rate of 0.05% of the employers pay bill. Each employer will have a levy allowance of £15,000 to spend on apprentice training. This is not a cash payment and cannot be used for any other training. To use this allowance please contact our Business Development Advisors for more detail.

Non-Levy Paying Employers

If you are not eligible to pay the Apprenticeship Levy, then you will pay 5% towards the cost of training and assessing an apprentice. This cost will be made directly to the training provider & the government will cover the rest of the cost (95%) up to the agreed funding band maximum. Anything above the funding band maximum will need to be covered by yourselves.

Small Employer Co-investment waiver

To support smaller business with fewer than 50 employers, the government will invest the full 100% of the cost of apprenticeship training to support 16-18 year olds and for those ages 19-24 formally in care or with a local authority education, health and care plan.

Additional Payments & Government Incentive

There will be an extra £1,000 funding available to both yourself and your training provider if your apprentice meets the following criteria:

  • Is 16-18 years old.
  • Is 19-24 years old and has previously been in care or who has a local authority education, health and care plan. 

This will be paid in two equal instalments throughout the apprenticeship at 3 months and 12 months and will also apply to small businesses with the co-investment waivered.

In addition to this the government has introduced a new incentive scheme to support employers recovering from the economic impact of Covid-19. This applies to apprentices hired between 1st August 2020 – 31st January 2021. For every apprentice that is a new employee to your business, you can claim the following:

  • Up to £2,000 if they are between 16-24 years old
  • Up to £1,500 if they are over 25 years old

This incentive payment differs to the apprenticeship levy and can be spent on anything to help supporting the costs of your organisation, such as wages, uniform or facilities.

Apprenticeship funding- receive an extra incentive for employing a young apprentice. Images shows young man & older man in front of laptop.

More information on the incentive scheme can be found here.