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Apprenticeship Levy Explained
What is the Apprenticeship Levy?
An Apprenticeship is an excellent opportunity for a business to attract and retain fresh thinking talent and plug specific skills gaps, whilst enabling a student to gain valuable experience and develop specific skills suited to their chosen career.
To support the Government’s growth and reform programme to increase the quality and quantity of Apprenticeships across the UK, the Government introduced the Apprenticeship Levy, which is a tax on UK employers with a wage bill of over £3 million pounds per annum. These funds are invested to support the development and delivery of the apprenticeship programme and grow quality vocational training and employment.
Have a look at our FAQs below to understand more about the levy.

Have a look at our FAQs below to understand more about the levy:
The Apprenticeship Levy is a tax on all UK employers that supports the funding of apprenticeships. It applies to companies which pay more than £3 million annual pay bill. Companies pay 0.5% of their pay bill directly into a fund, the government then adds an extra 10% to the fund.
By introducing the Apprenticeship levy, the Government is increasing apprenticeship funding. These funds will help to create sustainable, targeted apprenticeships enabling you to build a strong framework in which to deliver valuable quality training and development.
If you were to recruit or upskill a current member of staff, 100% of the funding/training costs will be paid by the government for those aged 16-21 at the start of their apprenticeship. Â
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For those aged over 21, the government will pay 95% towards the costs and we can arrange a flexible payment plan for you to fund the remaining 5%.
Employers receive a £1000 incentive payment for hiring apprentices aged 16-18, or those aged 19-24 who have been in care or have an Education, Health, and Care plan. This payment is made around month 6 and then around month 15.
Yes you can, so long as the training meets an approved apprenticeship standard, the training provided allows your employee to acquire substantive new skills and the content of the training is materially different from any prior training or a previous apprenticeship.Â
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This same rule applies for employers seeking to put employees on an equivalent or a lower level qualification than that they have already achieve.
Payments are managed through an online Digital Apprenticeship Account – similar to online banking.
Once you have an account you will be able to:
- receive levy funds to spend on apprenticeships
- manage your apprentices
- pay your training provider
- stop or pause payments to your training provider
Funds will expire 24 months after they enter an employer’s digital account unless they are spent on apprenticeship training.  This will also apply to any top-ups.
Levy Payers are employers with an annual payroll of over £3 million. They must pay the apprenticeship levy which is 0.5% of their total payroll. The funds paid into the levy can be used to cover apprenticeship training costs for new apprentices and upskilling your current workforce. You will lose these funds if not used within 24 months.
A non levy payer is a smaller employer with an annual payroll under £3 million. For apprentices aged 16-21 the government covers 100% of the training costs. For apprentices aged 22+ employers pay only 5% of the training, with the government covering the remaining 95%.
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Contact us regarding any apprenticeship related queries by email or telephone; we are here to help you achieve the very best during your time at Kirklees College.