How are apprenticeships funded?

To run an apprenticeship programme, employers can partner with a professional training provider to deliver the training, as well as an assessment provider to deliver End-point Assessment for the programme.

While the cost of an apprentice’s salary is covered by the employer, funding for training and assessment providers is different depending on whether you are a levy-paying employer or not.

Funding for a levy-paying employer

If you qualify as a levy-paying employer, you will be paying 0.5% of your annual pay bill as your levy taxation rate. These funds will accrue in your Apprenticeship Service digital account. You can then log in and use these funds to pay for the costs of hiring a training provider. The government will then pay an additional 10% of your total accrued funds

Funding for a non-levy paying employer

If you are a non-levy paying employer (and don't meet the £3 million wage bill threshold) you will be expected to pay 5% towards the costs of training and End-point Assessment while the government will pay the rest.

If your total employee headcount is below 50, then the government will cover 100% of the provider costs for apprentices that are aged 16 to 18, or those aged 19 to 24 who have been in the care of their local authority.

It’s worth noting that there are 30 apprenticeship funding bands as defined by the government. These represent the maximum contribution the government is willing to pay for a standard that fits within a given band. Non-levy paying employers should be aware that if the cost of a program exceeds that band upper limit, they will be expected to cover the remaining cost.

Looking for further info on funding apprenticeships?

There are incentive payments available for employers hiring a new apprentice. Find out more about the financial incentives for employers.