Funding an apprenticeship for non levy employers

How much it costs

As an employer that doesn’t pay the apprenticeship levy, you pay just 5% towards the cost of training and assessing an apprentice.

The government will pay the rest up to the funding band maximum.

You’ll pay the training provider directly and agree on 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

    If you exceed the funding band maximum, you’ll need to pay all the additional costs.

      Incentive payments for hiring a new apprentice

      From 11 January 2022, employers can apply for a payment of £3,000 for new apprentices of any age who have an employment start date of 1 October 2021 to 31 January 2022. These apprentices must also have an apprenticeship start date of 1 October 2021 to 31 March 2022.

      Applications open on 11 January 2022 and close on 15 May 2022.

      For apprentices with an employment start date from 1 April 2021 to 30 September 2021, applications are now closed.

      The incentive payment is in addition to the £1,000 employers already receive for hiring an apprentice:

        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

        If you exceed the funding band maximum, you’ll need to pay all the additional costs.

          Hire an apprentice who has been made redundant

          You can also use a new government service to help you hire apprentices who have been made redundant.

          Many of these apprentices may already have the skills and knowledge you need. Hiring a new apprentice in this way could mean you have a work-ready apprentice who can quickly add value to your business, shortening the time you’ll see a return on your investment.

          It also means you are supporting an apprentice to complete their training and achieve their apprenticeship.

            Paying your apprentice

            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.

            The rates from April 2020 are:

              Paying employer National Insurance contributions

              Employers may not need to pay Class 1 National Insurance contributions for an apprentice, if the apprentice is:

                under 25 years old
                on an approved UK government apprenticeship standard or framework (these can differ depending on country)
                earns less than £967 a week (£50,270 a year)

                The apprentice, as an employee, will continue to pay Class 1 insurance contributions through their salary, this will only benefit the employer.

                  Find a business to fund your apprenticeship costs

                  Large levy-paying businesses who pay the apprenticeship levy can pledge up to 25% of their unspent levy funds to a business of their choice.

                  You can apply to receive a transfer of funds to cover 100% of your apprenticeship training and assessment costs (up to the funding band maximum).

                  You can view all live pledges using the government public website. Read our guidance on GOV.UK for further information on how to apply.