To help cover the costs of training apprentices in your employment, you can use the apprenticeship levy, a UK tax on employers with a payroll of £3 million or more per year.
Find out more about the apprenticeship levy on GOV.UK.
For companies who have paid into the levy pot:
- 100 per cent of the training costs (up to the funding cap) are paid through the levy.
For non-levy payers
For companies who haven't paid into the levy pot:
- 95 per cent of the training costs are covered
- 5 per cent are payable by your organisation.
Employers that are not connected to another company or charity, will have an apprenticeship levy allowance of £15,000 each year. This allowance reduces the apprenticeship levy amount you have to pay by £15,000 across the year. Connected companies or charities will only have one £15,000 allowance to share between them.
These funds can then be used to pay for apprenticeship training through the digital account up to the funding cap. Funds expire in the digital account after 24 months. Levy paying employers that run out of levy funds will need to finance apprenticeship training directly. Levy payers that won’t be using all of their levy funds can transfer some of them to another employer.
For more information about the levy visit GOV.UK.
The funding cap
The government allocates a funding cap to each apprenticeship standard. This is the maximum amount of levy funds that can be used to pay for the off-the-job training in a degree apprenticeship. Any costs above the funding cap must be met by the employer on agreement with the training provider.
For more information on apprenticeship standards, funding caps and assessment plans visit the Institute for Apprenticeships website.
Throughout the duration of the apprenticeship, your company must pay the apprentice at least the minimum apprenticeship wage. However, higher and degree apprentices typically earn more, due to the level of skills required.
For more information visit GOV.UK.
As the employer, you are responsible for funding:
- Payment of wages, including all time spent on off-the-job training
- Any training, optional modules and field trips taken in addition to what the apprentice is eligible for
- Company inductions
- Any protective clothing and safety equipment required
- Any assessment resits
- Any administration costs for supporting the apprenticeship
- Time spent by managers supporting and mentoring apprentices
- Any student membership fees that are required by professional bodies, even where linked to mandatory qualifications
- Any off-the-job training that the apprentice has previously completed that cannot be funded through the levy
- Any additional cost for an apprenticeship standard where the University) charges more than the funding cap (this will be agreed in advance).
Your apprentice is responsible for funding the costs of any travel or accommodation to attend face-to-face, off-the-job training, graduation ceremonies and replacement certificates for previous qualifications. Furthermore an apprentice is subject to the same contract law as any other member of staff.