Apprenticeship Levy and cost

Apprenticeship cost

The cost of an apprenticeship will depend on the subject and course your employee undertakes. However, the cost of studying an apprenticeship may be part-covered or fully covered by the Apprenticeship Levy, depending on your circumstances as an employer. 

What is the Apprenticeship Levy? 

The Apprenticeship Levy is a payment that is required by all employers whose annual wage bill is greater than £3 million annually.
It is paid through the organisations PAYE alongside income tax and National Insurance.

Employers that meet this criterion will pay 0.5% of their payroll amount each month as a levy tax. This can then be reinvested back into your workforce in the form of an apprenticeship.   

The Government applies a top-up of 10% to the funds that enter the account each month and funds will expire 24 months after they enter the account unless they are spent on apprenticeships. 

If an employer doesn’t pay the Apprenticeship Levy   

If the annual pay wage bill for your organisation is less than £3 million annually, then you will not be required to pay the levy tax.

However, there are still options available for employers to access levy funds to invest in apprentices. 

Small and medium sized employers (SME) can take advantage of the co-investment scheme where you are required to pay 5% of the apprenticeship fees and the remaining 95% will be funded by the Government.

SME’s may also receive funding via a levy transfer which is where the apprenticeship fees are gifted from a levy-paying employer who is able to transfer up to 25% of their unused levy funds.  

For more information on levy transfers and how to apply, please get in touch.

You will still need to pay the salary and other work-related costs of an apprentice.

The University doesn’t dictate salary expectations. However, we do expect it at least complies with the National Apprenticeship Minimum Wage.