Funding and the Levy

What is the ‘Levy’?

To fund the increase in apprenticeships, the Government introduced an apprenticeship levy in April 2017. The levy amounts to a 0.5% tax on the wage bill for employers whose salary costs are £3 million or more each year.

Employers paying the levy are able to access their funding through the digital apprenticeship service to pay the provider of their choice. Funds will expire 24 months after they enter your apprenticeship service account unless you spend them on apprenticeship training with a training provider, such as the University of Northampton.

Employers that don’t pay the Levy

Small businesses with a pay bill of less than £3 million will have 95% of the training fees for apprentices paid on their behalf by government funding. The government will ask you to make a 5% contribution to the cost of this training and government will pay the rest, up to the maximum amount of government funding available for that apprenticeship. As both you and the government make a payment, this is called ‘co-investment’.

Further information

For more information about how the funding works, please visit the government website. You can also find information regarding the apprenticeship funding rules and guidance for employers on the government website.

Incentive payments for hiring a new apprentice

The government has introduced incentive payments that employers can apply for if they take on a new apprentice. For more information, please visit the gov.uk website.

Apprenticeship subcontracting information

You can  find information regarding our approach to subcontracting in apprenticeships on our apprenticeship subcontracting information page.