Funding your apprentice

An apprenticeship is funded in one of two ways, depending on your annul wage bill. If your wage bill is more than £3 million, you will fund your apprenticeship via your Apprenticeship Levy Pot. This is a pot of money is paid at a rate of 0.5% of your annual wage bill and is deducted each month. You will manage your fund and approved training providers via your Apprenticeship Service Account.

If you’re annual wage bill is £3 million pounds or less, you will be on a co-investment model which means you pay 5% of the apprenticeship fees and the Government pays the other 95%.

New starts from 1 April 2024

If you don’t pay the levy and take on an apprenticeship between the ages of 16-21 (or up to 24 if they have an education, health and care EHC plan provided by their local authority and/or have been in the care of their local authority), then the government will fund 100% of the training costs.

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.

Employers of any size can also apply to receive from from a large business who is happy to gift you some of their levy funds to cover your apprenticeship training costs. You can find out more here.