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Visit our new resource hub to access useful guides and find out how employers can access incentive payments for hiring an apprentice.

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Employers

Funding an apprenticeship for non levy employers

How much it costs

As an employer that doesn’t pay the apprenticeship levy, you pay just 5% towards the cost of training and assessing an apprentice.

The government will pay the rest up to the funding band maximum.

You’ll pay the training provider directly and agree on a payment schedule.

If you employ fewer than 50 employees, the government will pay 100% of the apprenticeship training costs up to the funding band maximum for apprentices aged:

  • 16 to 18
  • 19 to 24 with an education, health and care plan provided by their local authority or has been in the care of their local authority

If you exceed the funding band maximum, you’ll need to pay all the additional costs.

If your apprentice started before 1 April 2019, you pay 10% towards the cost of training and assessing your apprentice and the government pays the rest. This rate continues until your apprentice completes their training.

You will need to create an apprenticeship service account to reserve apprenticeship funding. For further information visit our help article or watch our video.

Incentive payments for hiring a new apprentice

From 11 January 2022, employers can apply for a payment of £3,000 for new apprentices of any age who have an employment start date of 1 October 2021 to 31 January 2022. These apprentices must also have an apprenticeship start date of 1 October 2021 to 31 March 2022.

Applications open on 11 January 2022 and close on 15 May 2022.

For apprentices with an employment start date from 1 April 2021 to 30 September 2021, applications are now closed.

The incentive payment is in addition to the £1,000 employers already receive for hiring an apprentice:

  • aged 16 to 18 years old
  • aged 19 to 24 with an education, health and care plan or who has been in the care of their local authority

For guidance on how to apply for an incentive payment using your apprenticeship service account, watch our helpful video.

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:

ApprenticeUnder 1919 to 2021 to 2425 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

Paying employer National Insurance contributions

Employers may not need to pay Class 1 National Insurance contributions for an apprentice, if the apprentice is:

  • under 25 years old
  • on an approved UK government apprenticeship standard or framework (these can differ depending on country)
  • earns less than £967 a week (£50,270 a year)

The apprentice, as an employee, will continue to pay Class 1 insurance contributions through their salary, this will only benefit the employer.

Read HMRC's guidance on paying National Insurance contributions.

Find a business to fund your apprenticeship costs

Large levy-paying businesses who pay the apprenticeship levy can pledge up to 25% of their unspent levy funds to a business of their choice.

You can apply to receive a transfer of funds to cover 100% of your apprenticeship training and assessment costs (up to the funding band maximum).

You can view all live pledges using our public website. Read our guidance on GOV.UK for further information on how to apply.

View current pledges

Our small and medium-sized businesses are the cornerstone of our economy, and so I'm thrilled that we're making it easier for them to taken on apprentices.
- Chancellor of the Exchequer, Rishi Sunak

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