Apprenticeship Levy funding

Apprenticeship funding in England is available to all employers, regardless of size. The amount an employer contributes depends on whether they pay the Apprenticeship Levy, the age of the apprentice, and whether levy transfer funding is used.

The Apprenticeship Levy applies to employers with an annual pay bill of over £3 million. These employers must contribute 0.5% of their payroll into a digital apprenticeship account, which can be used to pay for apprenticeship training and end point assessment.

Levy paying employers can:

• Use levy funds to pay for apprenticeship training and end point assessment by funding apprentices of any age or level

• Transfer up to 50% of unused levy funds to other employers (such as SMEs) – see transferring levy FAQ

If all of the levy funds in the digital account have been spent:

• The employer contributes to 25% of the remaining training costs, and the government contributes 75%, up to the funding band (see question on funding bands).

Employers that do not pay the levy only need to contribute 5% of apprenticeship training and assessment costs, and therefore the government covers the remaining 95%, up to the funding band.

This makes apprenticeships highly cost effective for small and medium sized employers.

Yes. Apprenticeship training is 100% government funded where the apprentice is aged 16–21, or, aged 22–24 and has an Education, Health and Care Plan (EHCP) or has been in local authority care.

Each apprenticeship standard has a funding band, which sets the maximum amount the government will contribute towards training and assessment.  Funding bands range from £1,500 to £27,000. Employers agree the final price with the training provider and any cost above the funding band must be paid by the employer.

Levy transfer funding allows large employers to transfer unused levy funds to other organisations.

The transfer can cover up to 100% of training and assessment costs (within the funding band).

This is particularly beneficial for SMEs and is widely used to support apprenticeships across supply chains and sectors

Yes. For some apprenticeship standards, including foundation apprenticeships, employers may be eligible for incentive payments of up to £2,000.  Eligibility depends on the apprenticeship standard and the age of the apprentice.

Funding covers:

• Apprenticeship training delivered by an approved provider

• On programme assessment

• End point assessment

Funding does not cover:

• Apprentice wages

• Travel or subsistence

• Recruitment costs

• General business equipment

Yes. Employers are responsible for:

• Paying the apprentice’s salary

• Ensuring wages meet National Minimum Wage requirements

• Covering normal employment costs

Yes. Apprenticeships can be used to upskill or reskill existing staff, provided the apprenticeship:

• Adds significant new knowledge, skills and behaviours

• Meets funding and eligibility rules

• Is aligned to the employee’s role and development needs

Employers access funding through the Apprenticeship Service, where they:
•    Set up an account
•    Choose an apprenticeship standard
•    Select a training provider
•    Reserve or allocate funding