Apprenticeship Levy

What is the apprenticeship levy? How can you make it work for you?

Apprenticeship Levy

Answering the common questions about the Levy

Is Your Business a Levy Payer?

Businesses with an annual wage bill over £3 million contribute 0.5% of their total wage bill to the Apprenticeship Levy.

This calculation includes:

- - Wages
  - Bonuses
  - Commissions
  - Pension contributions
  - Other remuneration that incurs National Insurance contributions

- - of employees under the age of 16
  - of employees who are not subject to UK National Insurance contributions legislation
  - on which Class 1A National Insurance contributions are payable, such as benefits in kind

For more information or to set up your Digital Apprenticeship Service Account

Visit the Government Website https://www.gov.uk/guidance/pay-apprenticeship-levy

Levy Allowance

Every business contributing to the Levy receives an annual £15,000 allowance from the government to offset their contribution.

Government Top-Up:

Each month, the government adds a 10% top-up to the funds in your Apprenticeship Levy account, increasing your training budget.

Digital Apprenticeship Service (DAS):

Contributions are managed through a Digital Apprenticeship Service (DAS) account. Your funds are converted into digital vouchers, which can be used to pay for apprenticeship training with registered providers.

How do you Spend or Maximise your funds?

Levy Funds can be a valuable resource if you know how to utilise them

Maximising your funds

Your Levy funds are a valuable resource for:

Recruiting New Talent: Bring in fresh perspectives and skills with new apprentices.
Upskilling Existing Staff: Support your team’s professional growth and address skills gaps.

Funds accumulate monthly and roll over if unused. However, they expire after 24 months, with unspent funds returned to the Treasury.

Spending Levy

Funding Bands:
Apprenticeships are divided into 15 funding bands, ranging from £1,500 to £27,000. These bands help businesses estimate the cost of training and allocate funds appropriately.

With a clear understanding of funding bands, you can plan how many apprenticeships your Levy funds can support.

Pledging Unused Levy Funds:
If you don’t spend your entire Levy, you can pledge unused funds to support smaller organisations in need of training support.

For Businesses With a Wage Bill Under £3 Million

If your business doesn’t meet the £3 million threshold, you can still benefit from apprenticeship training through a co-investment model:

Contribute just 5% of the total apprenticeship cost.
The government covers the remaining 95%.
Need help with your 5% contribution? Contact us to explore available support options.

Additional Incentives for Hiring Young Apprentices

Employers hiring apprentices aged 16-18 years are eligible for a £1,000 incentive to support their training, paid in two installments:

£500 after three months.
£500 after twelve months.

This incentive helps businesses foster young talent while supporting their career development.