Apprenticeship Fees & Incentives

Employers get help from the government to pay for apprenticeship training. Due to the economic impact of the coronavirus (COVID-19) outbreak the government has introduced incentive payments for hiring a new apprentice to help organisations offer new apprenticeships.

New Incentive

Employers who hire a new apprentice between 1 August 2020 and 31 March 2021 can apply for:

£2,000 for each new apprentice aged 16 to 24

£1,500 for each new apprentice 25 and over

You can apply for the payment from 1 September 2020, after you add new apprentices to your apprenticeship service account. The first payments will be made from January 2021 and will be paid directly into employer’s bank accounts.

Usually, the amount an employer receives depends on whether they pay the apprenticeship levy or not. Employers with a pay bill of over £3million each year pay the levy.

The rate that you receive remains the same, however the cost of training depends on the type of apprenticeship being undertaken.

Funding bands

As from 1 April 2019, the government will fund 95% of the total cost of an apprenticeship for SME employers with 50-250 employees, the remaining 5% is paid for directly by the employer to the training provider.

For apprenticeships that started before 1 April 2019, employers continue to pay 10% towards the costs of training their apprentice with the government paying 90%. This rate will continue until your apprentice completes their training.

Employers with a pay bill of £3 million per year will already be paying an Apprenticeship Levy of 0.5%. This is paid into a digital account held by government to help 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%.

Additional incentives

  1. If you’re an employer with less than 50 employees, the Government will fully fund the total cost of the apprenticeship for 16-18 year old apprentices. For apprentices aged 19 and over, the 10% employer contribution will be applied.
  2. All employers will be eligible to receive a £1,000 incentive payment for each 16-18 year old apprentice. Payment will be made to employers by the training provider in two equal instalments at 3 and 12 months.

This incentive also applies to 19-24 year olds who have previously been in care, or who have a Local Authority Education, Health and Care plan.

Still not sure how funding works? No problem. If you want to know the specifics for your apprenticeship programme, request a call back from our expert team.

Estimate my Apprenticeship Funding

Use this government tool to estimate if your organisation will pay the apprenticeship levy, how much your organisation will have available to spend on apprenticeships and how much the government will contribute towards the cost of training.

Hear from our employers

VolkerFitzpatrick Apprentices

Employers we work with

  • VolkerFitzpatrick
  • Vinci
  • Morgan Sindall
  • Bouygues
  • Transport for London