What is the Apprenticeship Levy?
In 2017 the government changed the way Apprenticeships are funded. Employers are categorised into Levy and non-Levy payers depending on the size of their annual wage bill.
Key Facts
- Employers with an annual wage bill of over £3 million will contribute to the Apprenticeship levy
- Employers with an annual wage bill of less than £3 million will not contribute to the Apprenticeship Levy
- 5% of the annual wage bill will be paid into the Digital Apprenticeship Service (DAS) monthly
- The vast majority of employers will not contribute to the Apprenticeship Levy
- Apprenticeship starting after May 1st 2017 are enrolled on the new funding arrangements
- All employers will receive a 10% top up into their DAS account.
- The full cost of the Apprenticeship course will be deducted from the DAS account
Employers with 49 employees or less will contribute:
16 - 18 Year Olds | 19 - 24 Year Olds (If have EHC Plan or Care Leaver) | All Other Applicants | |
|---|---|---|---|
Employer Contribution | 100% | 100% | 100% |
Government Contribution | 0% | 0% | 0% |
Additional Funding Available | £1000 employer incentive £2000 additional government incentive for starts between 1st August and 31st January | £1000 employer incentive £2000 additional government incentive for starts between 1st August and 31st January | £1000 employer incentive £2000 additional government incentive for starts between 1st August and 31st January |
In addition, if an Apprentice needs to study English and maths the government will pay 100% of this.
Government Announcement: New Employer Incentive
- Applies to Apprentices that are new to the business only – i.e. not existing or recent employees.
- Paid out to all employers regardless of annual wage bill.
- Only applies to new starts between 1 August 2020 and 31 January 2021.
- Your business could be entitled to £2,000 for each new Apprentice under the age of 25 or £1,500 for each new Apprentice aged 25+.
- New Apprenticeship incentive is in addition to the existing £1,000 payment the government provides for new 16-18-year-old Apprentices and those aged under 25 with an Education, Health and Care Plan.
- Employers can apply for funding via the Apprenticeship Service.
