Government Funding for Apprenticeships
Understanding how government funding can help you build skilled teams whilst reducing training costs
Up to 100%
Training costs covered
£5,000-£27,000
Funding per apprentice
£1,000
Additional incentive
How Apprenticeship Funding Works
The Apprenticeship Levy
The apprenticeship levy is a tax on UK employers to fund apprenticeship training. It applies to employers with an annual pay bill of more than £3 million.
Levy Calculation
0.5% of your annual pay bill minus a £15,000 annual allowance
Example: £5 million pay bill = (£5m × 0.5%) - £15,000 = £10,000 levy
Levy Paying Employers
Use your levy funds to pay for apprenticeship training and assessment
Non-Levy Employers
Government pays 95% of training costs, you pay 5% (spread over training duration)
Funding Rates by Age and Employer Type
Non-Levy Employers
Employers with pay bill under £3m
16-21 Years Old
100%
Government covers all training costs
22+ Years Old
95%
You pay 5% (typically £250-£1,350)
Employers with fewer than 50 employees
Get 100% funding for apprentices aged 16-21, regardless of level
Levy-Paying Employers
Employers with pay bill over £3m
All Ages
100%
Paid from your levy account
10% government top-up on levy funds
24-month expiry on unused funds
Additional Incentive Payments
Hiring 16-18 Year Olds
£1,000 incentive payment when you hire an apprentice aged 16-18
Payment Schedule: Incentive payments are made in two instalments - £500 after 90 days and £500 after 365 days of the apprenticeship start date.
Business Support Included
Training Support
- Dedicated account manager
- Workplace mentor training
- Regular progress reviews
- End-point assessment coordination
Business Development
- Business process consultation
- Skills gap analysis
- Compliance and reporting support
- Recruitment assistance
Eligibility Criteria
Employer Requirements
- UK-based employer or levy-paying UK organisation
- Provide genuine employment with a contract of at least 30 hours per week
- Commit to 20% off-the-job training (minimum hours vary by programme)
- Assign a workplace mentor to support the apprentice
Apprentice Requirements
- Must be 16 years or older at the start of their apprenticeship
- Right to work in England
- Spend at least 50% of working hours in England
- Not be in full-time education at the same time
Frequently Asked Questions
What is the off-the-job training requirement?
Apprentices must spend at least 20% of their working hours on off-the-job training. This includes classroom learning, online courses, shadowing colleagues, and attending workshops directly related to their apprenticeship.
The minimum number of hours varies by programme level and duration, typically ranging from 348 to 466 hours over the apprenticeship period.
When do I need to pay my contribution?
For non-levy employers, the 5% contribution is spread over the duration of the apprenticeship. You'll typically make monthly payments to your training provider.
Levy-paying employers use their digital apprenticeship service account, with funds automatically deducted as training progresses.
Can I use levy funds for existing employees?
Yes! Apprenticeships are not just for new hires. You can upskill existing employees through apprenticeship programmes, provided they're learning substantial new skills and knowledge. This is a cost-effective way to develop your current workforce.
What happens if I don't use my levy funds?
Levy funds expire after 24 months if not used. To reduce waste, you can:
- Use funds for employees across your organisation or group companies
Do I need to pay apprentice wages on top of funding?
Yes, apprentice wages are separate from training costs. You must pay at least the National Minimum Wage for apprentices, which depends on age and apprenticeship year:
- • Apprentices under 19 or in first year: £6.40 per hour (2024/25)
- • Apprentices 19+ after first year: Standard minimum wage for age
Important: Government funding rates, eligibility criteria, and incentive payments are subject to change and may be updated by government policy decisions. All information provided on this page is correct at the time of publication but should be verified before making business decisions. Please contact us for the most current funding information and to discuss your specific circumstances.