Costs and
Funding Support
Apprenticeship Costs and Funding Support for Employers
Investing in apprenticeships has never been more accessible, thanks to a range of government funding options designed to support employers of all sizes. Whether your business contributes to the Apprenticeship Levy or qualifies for non-levy funding, there are significant financial incentives available to help you develop skilled talent through apprenticeships.
Apprenticeship Levy: Funding for Larger Employers
If your business operates in the United Kingdom and has an annual payroll of over £3 million, you are required to pay the Apprenticeship Levy. This levy is set at 0.5% of your total annual pay bill and is collected monthly via the Pay As You Earn (PAYE) system.
The primary purpose of the levy is to give employers direct control over apprenticeship funding, empowering them to invest in workforce development and tailored training programmes. Funds collected through the levy are deposited into your Digital Apprenticeship Service (DAS) account, where they can be used to pay for apprenticeship training and assessment delivered by approved providers.
The primary purpose of the levy is to give employers direct control over apprenticeship funding, empowering them to invest in workforce development and tailored training programmes. Funds collected through the levy are deposited into your Digital Apprenticeship Service (DAS) account, where they can be used to pay for apprenticeship training and assessment delivered by approved providers.
Non-Levy Government Funding: Support for Smaller Employers
Smaller employers—those with an annual pay bill of less than £3 million—are not required to pay the Apprenticeship Levy. However, the Government provides substantial funding support for these businesses through a co-investment model.
Under this scheme:
– The Government typically covers 95% of the training and assessment costs for each apprentice.
– Employers are responsible for just 5% of the remaining costs.
– In certain cases, eligible small businesses may receive 100% government funding, particularly for younger apprentices.
You may be eligible for full (100%) funding if:
You have fewer than 50 employees, and
You hire an apprentice aged 16 to 21 (or under 25 with an Education, Health and Care Plan)
For apprentices aged 22 and over, the Government still covers 95%, with your business contributing the remaining 5%.
This generous funding model is designed to reduce financial barriers and encourage more small businesses to invest in apprenticeships.
Under this scheme:
– The Government typically covers 95% of the training and assessment costs for each apprentice.
– Employers are responsible for just 5% of the remaining costs.
– In certain cases, eligible small businesses may receive 100% government funding, particularly for younger apprentices.
You may be eligible for full (100%) funding if:
You have fewer than 50 employees, and
You hire an apprentice aged 16 to 21 (or under 25 with an Education, Health and Care Plan)
For apprentices aged 22 and over, the Government still covers 95%, with your business contributing the remaining 5%.
This generous funding model is designed to reduce financial barriers and encourage more small businesses to invest in apprenticeships.
Apprenticeship Levy Transfers: Sharing Unused Funds
If you are a levy-paying employer with unspent apprenticeship funds, you have the opportunity to transfer up to 25% of your annual levy contributions to other employers. This enables your business to support skills development within your industry, supply chain, or local community.
There are several ways to find and partner with employers seeking transferred funds:
– Collaborate within your industry: Reach out to businesses in your sector to identify potential partners.
– Work with Apprenticeship Training Agencies (ATAs): These organisations can help broker relationships and manage training.
– Partner with regional bodies or networks:Local enterprise partnerships and regional authorities often facilitate levy transfers.
To initiate a transfer:
-Both the sending and receiving employers must be registered on the Digital Apprenticeship Service.
You must agree on key transfer details, including:
The apprenticeship standard
The number of apprentices
The total training and assessment cost
Find the full details at gov.uk/guidance
There are several ways to find and partner with employers seeking transferred funds:
– Collaborate within your industry: Reach out to businesses in your sector to identify potential partners.
– Work with Apprenticeship Training Agencies (ATAs): These organisations can help broker relationships and manage training.
– Partner with regional bodies or networks:Local enterprise partnerships and regional authorities often facilitate levy transfers.
To initiate a transfer:
-Both the sending and receiving employers must be registered on the Digital Apprenticeship Service.
You must agree on key transfer details, including:
The apprenticeship standard
The number of apprentices
The total training and assessment cost
Find the full details at gov.uk/guidance