Funding and the Levy

What is the ‘Levy’?

To fund the increase in apprenticeships, the Government introduced an apprenticeship levy in April 2017. The levy amounts to a 0.5% tax on the wage bill for employers whose salary costs are £3 million or more each year.

Employers paying the levy are able to access their funding through the digital apprenticeship service to pay the provider of their choice. Funds will expire 24 months after they enter your apprenticeship service account unless you spend them on apprenticeship training with a training provider, such as the University of Northampton.

Employers that don’t pay the Levy

From 1 August 2026, employers who do not pay the apprenticeship levy (typically SMEs with an annual pay bill under £3 million), training and assessment costs are as follows:

Aged 16 to 24: The government covers 100% of training and assessment costs with zero employer contribution.

Aged 25 and over: Employers must pay a 5% co-investment toward training costs, and the government covers the remaining 95%. As both you and the government make a payment, this is called ‘co-investment’.

Wages: Employers must continue to pay the apprentice’s regular salary at or above the national minimum wage standards regardless of age

Further information

For more information about how the funding works, please visit the government website. You can also find information regarding the apprenticeship funding rules and guidance for employers on the government website.

Incentive payments for hiring a new apprentice

The government has introduced incentive payments that employers can apply for if they take on a new apprentice. For more information, please visit the gov.uk website.

Apprenticeship subcontracting information

You can  find information regarding our approach to subcontracting in apprenticeships on our apprenticeship subcontracting information page.