Employers get help from the government to pay for apprenticeship training.
All employers will need to sign up and access an Apprenticeship Digital Account to be able to get funding for apprenticeship training. This is done through the GOV.UK website Manage Apprenticeship Service
Create an account to manage apprenticeships
Registering an account on the apprenticeship service - YouTube
How much it costs
If you don't pay the apprenticeship levy, or if you're a levy-paying employer but don't have enough funds, you'll need to pay 5% of the training and assessment costs for your apprentice. The government will cover the rest, up to the funding band maximum.
You’ll make payments directly to the training provider and agree on a payment schedule.
New starts from 1 April 2024:
For employers who do not pay the levy, the government will fully fund apprenticeship training costs, up to the funding band maximum, for apprentices who at the start of their apprenticeship training are:
- aged 16 to 21 years old (or 15 if their 16th birthday is between the last Friday of June and 31 August)
- aged 22 to 24 years old with an education, health and care (EHC) plan provided by their local authority and/or have been in the care of their local authority
For starts up to 31 March 2024:
If you have fewer than 50 employees, the government will fully fund apprenticeship training costs, up to the funding band maximum, for apprentices who at the start of their apprenticeship training are:
- aged 16 to 18 years old (or 15 if their 16th birthday is between the last Friday of June and 31 August)
- aged 19 to 24 years old with an education, health and care (EHC) plan provided by their local authority and/or have been in the care of their local authority
If you negotiate a price above the funding band maximum, you'll need to pay the difference.
Reserve funding: Create an apprenticeship service account to reserve apprenticeship funding. For more information, visit our help article or watch our video.
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. Pay them at least the National Minimum Wage based on their age and apprenticeship year.
Paying employer National Insurance contributions
You might not need to pay Class 1 National Insurance contributions for an apprentice if they:
- Are under 25 years old
- Are on an approved UK government apprenticeship standard or framework
- Earn less than £967 a week (£50,270 a year)
The apprentice still pays Class 1 National Insurance contributions through their salary. This exemption only benefits the employer.
More info: Read HMRC's guidance on paying National Insurance contributions.
As a smaller employer, you will need to reserve funds in the ‘finance’ section of your apprenticeship service account before starting an apprentice. You can also give your training provider permission to reserve funds on your behalf in your account set up.
The reservation period for employers who do not pay the apprenticeship levy is 3 months. This means funds can be reserved for 3 months before the apprenticeship is planned to start.
You are able to reserve up to 10 apprentice starts per employer and this usually resets every 12 months back to zero. This is kept under review through your Digital Account.
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 public website.
Funds transferred from employers who pay the levy to other employers through the apprenticeship service are not included when counting the number of reservations.
Employers with a pay bill of £3 million per year will already be paying an Apprenticeship Levy of 0.5%for the total pay bill after the £3 million. This is paid through HMRC to your digital account to fund the training of apprentices in your business. You can draw down this levy over time to pay for the training of the Apprentices in your business.
The government tops up the funds in your digital account by 10% each month. Should you use up all the funds in your account, any new apprentices will be funded at the SME co-investment rate above of 95%.
All employers will be eligible to receive a £1,000 incentive payment .
Employers get £1,000 each for taking on an apprentice who is either:
- aged 16 to 18 years old, or
- aged 19 to 25 years old and has an education, health and care (EHC) plan or has been in the care of their local authority
You can spend it on any costs associated with supporting an apprentice in the workplace.
For example, on uniforms, your apprentice’s travel or their salary
Employers do not need to take any action.
We confirm that an apprentice is eligible and calculate payments and do all the necessary claims.
The first payment of £500 should be paid to you by BDC after 90 days of the apprenticeship training start date and you will be asked to send in an invoice.
The final payment of £500 should be paid after 365 days of the apprenticeship training start date.
Still not sure how funding or incentives works? No problem. If you want to know the specifics for your apprenticeship programme, request a call back from our expert team.
