Apprenticeship Funding Rules: Levy & Non-Levy

Apprenticeship Funding Rules

Apprenticeship funding rules are dependent on whether you’re a levy or non-levy payer as levy payers will use their levy budget to pay for the training. A non-levy payer will have the training partially or fully funded by the government. We are based in England meaning that we are limited to only being able to receive funding from the Government if you are also based in England. If you’re a company based in Wales, Scotland or Northern Ireland, then you will have to find a training provider based in the same country.

Have a read below to get a better understanding of the funding rules.

Non-Levy Payer Funding

As an employer that doesn’t pay the apprenticeship levy, you pay just 5% towards the cost of training an apprentice and the government will pay the rest. You will work with your training provider to set up and agree a payment schedule.

If you employ fewer than 50 employees, the government will pay 100% of the apprenticeship training costs up to the funding band maximum for apprentices aged:

  • 16 to 18
  • 19 to 24 with an education, health and care plan provided by their local authority or has been in the care of their local authority

Paying your apprentice

As an apprenticeship is a job you’re responsible for paying your apprentice for their normal working hours and any training they do as part of the apprenticeship.

You must pay them at least the National Minimum Wage rate depending on their age and the year of apprenticeship training they’re in. This is the minimum, but we always recommend paying more, as it will increase the number of applicants and increases employee retention as it shows you value them more.

The rates from April 2023 are:

Apprentice Under 19 19 to 20 21 to 22 23 and over
In 1st year £5.28 £5.28 £5.28 £5.28
Have completed 1st year £5.28 £7.49 £10.18 £10.42
Team meeting around a large table

Levy Payer Funding

Apprenticeship funding is different for Levy Payers (employers with a payroll in excess of 3 million per annum). As a Levy payer, you are able to use your Levy fund for the apprenticeship.

Key Facts:

  • Any employers, in any sector, with a payroll bill of more than £3 million per year, pay the Apprenticeship Levy
  • Apprenticeship Levy will be set at a rate of 0.5% of your total payroll
  • Employers will not pay the first £15,000 of the Levy
  • It will be collected on a monthly bases on ‘live’ HMRC payroll data

Your Levy funds can be used to recruit an apprentice or upskill your existing staff, by investing in training to enable you to keep your business up to date and competitive. We have a range of apprenticeships available to help you develop and strengthen your team with existing staff or new employees.

Apprenticeship Levy funding can be confusing, for more information click the link below or get in touch.

https://www.apprenticeships.gov.uk/employers/funding-an-apprenticeship