Employers who pay the apprenticeship levy
Employers with annual pay bills of more than £3 million have to pay an apprenticeship levy of 0.5%.
The level of funding that enters an employer’s apprenticeship account each month is calculated as:
- The monthly levy they pay to HMRC
- Multiplied by the percentage of their pay bill that goes to their employees living in England
- Plus a 10% government top-up on this amount
You can use funds in your account to pay only for apprenticeship training and assessment for apprentices that work at least 50% of the time in England, and only up to the funding band maximum for that apprenticeship.
Employers with annual pay bills of less than £3 million have to ‘co-invest’ 5% towards the total cost of apprenticeships. The government pays the remaining 95%.
Any levy-paying employer who wants to invest more in apprenticeship training than they hold in their account can also co-invest at the same rate.
The government will pay 100% of training costs for small businesses that employ apprentices aged 16-18. Small businesses are defined as those employing up to 50 people, and with annual pay bills of less than £3 million.