Apprenticeship Funding

How Apprenticeships Are Funded

As an employer, you can either access funding via the Apprenticeship Levy or by accessing 95% of the cost through government funding. You can make additional savings by not having to pay employer National Insurance for apprentices under the age of 25.

Non-levy payers – if your annual wage bill is less than £3m:
Apprenticeships are 95% government-funded so you pay 5% contribution which is invoiced when an apprentice starts with you.

  • The cost of the apprenticeship will be agreed with you at the start and will be documented on the commitment statement.
  • From 1st April 2021 you will need to register on the Digital Apprenticeship Service prior to employing an apprentice to access the government funding. NBC can assist you with the registration process.

Non-levy funding by age of the apprentice:

  • 16-18 years old and employer (all sites) has less than 50 employees – fully government funded
  • 19+ and employer has less than 50 employees – 5% contribution
  • 16-18 years old and employer has more than 50 employees – 5% contribution
  • 19+ and the employer has more than 50 employees – 5% contribution

Levy paying employers – if your annual payroll is over £3m:

This applies to companies who have an annual payroll of over £3 million. Companies pay 0.5% of their pay bill directly into a fund, the government then adds an extra 10%.
You will pay into your levy fund through PAYE every month and the funds expire after 24 months if you don’t use them.
Your levy allocation will be managed through a digital account which will allow you to:

  • receive levy funds to spend on apprenticeships
  • manage your apprentices
  • pay your training provider
  • stop or pause payments to your training provider

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    Incentive Payments From 1st April 2021-
    30th September 2021

    Employers who hire a new apprentice between 1st April 2021 and 30 September 2021 will
    receive £3000 per new apprentice hire. This is also in addition to the £1000 incentive for
    employing a 16-18 apprentice meaning recruiting a 16-18 year old will result in £4000 of
    incentive payments. The apprentice must be a new member of staff and not have been on your
    payroll in the last 6 months.
    It might also be worth noting that the incentives can be claimed if you employ a new member
    of staff in a Team Leader or Management role that is undergoing an apprenticeship to develop
    their knowledge, skills and behaviours. It’s not just for entry level roles.