Using your apprenticeship levy
As an employer with a pay bill of more than £3 million, you’re required to pay the apprenticeship levy. You can manage funds using the apprenticeship service and spend it on training and assessing your apprentices.
The government will apply a 10% top up to the funds you have in your account.
If you don’t have enough funds, you just pay 5% of the outstanding balance and the government will pay the rest. This is up to the funding band maximum allocated to each specific apprenticeship.
For apprentices that started before 1 April 2019, you need to contribute 10%.
If you exceed the funding band maximum, you’ll need to pay all the additional costs.
If you don’t already have an account, find out how to set up an apprenticeship service account as an employer.
Incentive payments for hiring a new apprentice
To help businesses offer new apprenticeships, we have increased incentive payments for employers hiring a new apprentice from 1 April 2021 to 30 September 2021.
Employers will receive £3,000 for new apprentices of any age who join their organisation from 1 April 2021 to 30 September 2021.
You can apply for incentive payments for these apprentices from 1 June 2021 to 30 November 2021.
The incentive payment is in addition to the £1,000 employers already receive for hiring an apprentice:
aged 16 to 18 years old
under 25 with an education, health and care plan or who has been in the care of their local authority
Apprentices who joined your organisation before 1 April 2021
For new apprentices who joined your organisation between 1 August 2020 and 31 March 2021 aged:
16 to 24, employers will receive £2,000
25 and over, employers will receive £1,500
You must apply for these apprentices before 31 May 2021.
Hire an apprentice who has been made redundant
You can also use a new government service to help you hire apprentices who have been made redundant.
Many of these apprentices may already have the skills and knowledge you need. Hiring a new apprentice in this way could mean you have a work-ready apprentice who can quickly add value to your business, shortening the time you’ll see a return on your investment.
It also means you are supporting an apprentice to complete their training and achieve their apprenticeship.
If you hire an apprentice that has been made redundant, you can apply for incentive payments for hiring a new apprentice.
Paying your apprentice
You’re responsible for paying your apprentice for their normal working hours and any training they do as part of the apprenticeship.
You must pay them at least the National Minimum Wage rate depending on their age and the year of apprenticeship training they’re in.
The rates from April 2020 are:
|Apprentice||Under 19||19 to 20||21 to 24||25 and over|
|In 1st year||£4.15||£4.15||£4.15||£4.15|
|Have completed 1st year||£4.15||£6.45||£8.20||£8.72|
Transfer funds to another employer
If you have unused apprenticeship funds, you can transfer them to another employer using the apprenticeship service. This will support them to pay for apprenticeship training and assessment.
You can find employers who want to receive a transfer by:
working with employers in your supply chain
getting in touch with employers in your industry
contacting an Apprenticeship Training Agency (ATA)
working with regional partners
You can transfer a maximum of 25% of your levy funds.