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Apprenticeship levy for employers

Get out more than you pay in...

Apprenticeships for employers

The Apprenticeship Levy

The levy was introduced on 6 April 2017 and will be charged at a rate of 0.5% of an employers’ pay bill, paid through PAYE on a monthly basis.

Each employer will have a levy allowance of £15,000, this is not a cash payment. It works in a similar way to the personal tax allowance and cannot be used to purchase apprenticeship training.

The impact of the allowance means that fewer than 1.3% of UK employers, those with an annual pay bill of more than £3 million, are liable to pay the levy.

Employers in England who pay the levy will be able to get out more than they pay in, through a 10% top-up to their online accounts.

An employer’s pay bill is made up of the total amount of the employees’ earnings that are subject to Class 1 National Insurance contributions, such as:

  • wages
  • bonuses
  • commissions
  • pension contributions

What about non-levy paying employers?

Employers with a pay bill of less than £3 million a year will not need to pay the levy. At least 90% of non-levy paying employers’ apprenticeship training and assessment costs in England will be paid for by the government. The government will ask these employers to make a 10% contribution to the cost, paid directly to the provider, and the government covers the rest. This cost will be spread over the lifetime of the apprenticeship.

The government is offering additional support to organisations with fewer than 50 employees* by paying 100% of training and assessment costs for their apprentices aged 16-18 and for those aged 19-24 formerly in care or with a local authority education, health and care plan.

The government will also pay employers, no matter what size, £1,000 for each 16-18 year old apprentice they employ.

A guide to the Apprenticeship Levy

A guide to the Apprenticeship Levy

Find out more

Apprenticeship Levy
Employer Toolkit