Fees and funding for employers
Government funding is available to businesses to help cover the costs of apprenticeship training fees. What does this mean for your business?
The government provides funding to organisations to help cover training costs, making higher and degree apprenticeships a cost-effective way to bring new knowledge and ideas into their organisation.
We have recently secured funding to help SMEs in East Midlands recruit an apprentice, which means 90% of the training costs are paid for.
If your organisation is based in the UK and has an annual wage bill of over £3m, you should be paying the monthly Apprenticeship Levy via the PAYE system.
The below funding information is only applicable should your organisation have a work base in England.
What this means for you
Employers with an annual pay bill of over £3m
Your organisation should pay the monthly apprenticeship levy via the PAYE system.
The annual levy allowance of £15,000 is paid into your digital account in monthly instalments. You can use this to invest in an apprentice at no additional cost. This is only accessible to pay for apprenticeship training.
If you exceed the spend on your levy account, you will move to a co-funded model. The government will cover 90% of the maximum cost of the apprenticeship.
Employers with an annual pay bill of less than £3m
Your organisation may be entitled to 90% funding of the full cost of an apprenticeship.
NTU recently secured funding to support SMEs within the East Midlands who are interested in recruiting an apprentice, or upskilling an existing staff member through an apprenticeship.
If your organisation has an annual pay bill of less than £3m, you are entitled to 90% funding of the full cost of an apprenticeship programme. Therefore, your organisation will only need to pay the remaining 10%. And with £27,000 being the maximum cost of an apprenticeship (set by the Institute for Apprenticeships), you are able to invest in a degree-level employee learning industry-specific knowledge, skills and behaviours both on and off the job for a maximum cost of £2,700.
Employers with 49 employees or less
You may be entitled to 100% funding.
This is the case if, on the first day of the apprenticeship, the apprentice is
- aged between 16 and 18 years old (or 15 years old if the apprentice’s 16th birthday is between the last Friday of June and 31 August)
- aged between 19 and 24 years old and either has:
- an education, health and care plan provided by the local authority, or
- has been in the care of the local authority.
As an employer, you will additional incentive payments if, at the start of apprenticeship, your apprentice is
- Aged between 16 – 18 years old (or 15 years of age if the apprentice’s 16th birthday is between the last Friday of June and 31 August)
- aged between 19 and 24 years old and has either an education, health and care plan provided by the local authority, or has been in the care of the local authority
50% of the payment amount is made 90 days after the apprentice starts. Then, 365 days after the apprentice starts, the remaining 50% is paid. Payments are sent directly to NTU as the training provider. Upon receipt, NTU will pass these funds to employers within 30 days.
Gov.uk has detailed information on apprenticeship funding and setting up an online account: