Apprenticeship funding

Since April 2017 a new funding model has been in place for apprenticeships. How an apprenticeship is funded is now based on the employer. 

Employers fall into two main groups:

  • Those with an annual payroll over £3 million
  • Those with an annual payroll under £3 million
Payroll over £3m – Levy Paying EmployerPayroll under £3m – Co-Investor Employer

0.5% of payroll is paid by way of a tax to HMRC, with a £15,000 allowance

Payroll is not high enough to pay the levy

The government will top up an employer’s account by 10% each month


The government will fund the cost of the apprenticeship at the following levels:

  • 100% of cost if the apprentice is aged 16-18
  • 95% if the apprentice is aged 19 or over and/or the employer has over 50 employees (including the apprentice(s))

These payments are taken monthly

The training provider you select to deliver your apprenticeship training will draw down funding directly from Government and will invoice the employer for the 10%, if applicable

Payments are held in an online Apprenticeship Service Account

For employers with payroll’s that border £3m, they will start paying the Levy if at any point payroll reaches or exceeds £3m.

Monies in this account can be used by the employer to purchase apprenticeship training by selecting an employer through the Apprenticeship Service and authorising payment


Monies that remain unused in this account after a 24 month period will be taken back by HMRC for distribution to fund apprenticeships for non-levy/ co-investing employers


Employer can transfer up to 10% of their Levy funding to another employer, through the Apprenticeship Service Account, should they wish to


Find out how to register and use the apprenticeship service as an employer

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If you have any queries, please don't hesitate to contact us.