Funding Explained

The Apprenticeship Levy

The Apprenticeship Levy is a form of tax that large employers pay towards funding a greater number of high-quality apprenticeships. Levy-paying employers can transfer a percentage of their unused funding to other businesses, helping them overcome financial barriers to offering apprenticeships.

There are several ways you can access apprenticeship funding as an employer

For levy employers

If you’re an employer with a payroll bill over £3 million each year you’ll be paying an apprenticeship levy of 0.5% via the HMRC PAYE. The cost of apprenticeships will be made out of this account. If you exceed your account limit, you will convert to the co-investment model.

A number of employers find it difficult to spend their full complement of levy funding. To support these organisations, we have introduced the SYMCA Levy Matchmaking Service whereby they transfer unspent funds to other organisations, enabling them to benefit from further apprenticeship funding. This not only supports corporate social responsibility objectives but also supports skills development within the local supply chain.

For non-levy employers

If you do not have an annual wage bill of more than £3m a year, you won't have to pay the Apprenticeship Levy.

For apprentices aged 16 - 21, the government will fund all of the apprenticeship training costs, up to the funding band maximum, for apprentices who are aged between 16 and 21 years old when they start their apprenticeship training. This is new from 1st April 2024.

For apprentices aged 22+, you will share the cost of apprenticeship training with the government. You’ll need to contribute 5% towards the cost of the apprenticeship programme with the remaining 95% paid by the government. This is called ‘co-investment’.

You could also be eligible for extra funding depending on your organisation's and your apprentice’s circumstances.

For example:

If an apprentice is aged 16-18 years of age, or has previously been in care or who has a Local Authority Education, Health and Care plan, you will receive £1,000 to help with additional costs.

Employers with fewer than 50 people working for them can train at no cost those aged 19-24 who have previously been in care or who have a Local Authority Education, Health and Care plan. These employers are not required to contribute the 5% co-investment; instead, the government will pay 100% of the training costs.

Levy Transfers

Employers can apply for a Levy Transfer where you could benefit from 100% funding of the training costs of your apprenticeship. We are working with a range of large employers in the region who have pledged funds to be spent by other regional employers to support their apprenticeships. For further details please contact the Apprenticeship Hub.

All apprentices must meet with EFA’s eligibility rules as defined in the latest Funding Rules - for further guidance please contact the South Yorkshire Apprenticeship Hub

Additional support

To support employers who employ apprenticeships the national government have introduced a range of additional incentives including:

£1,000 for each apprentice recruited who is 16-18 years old

£1,000 for each apprentice recruited who is 19-24 and has an education, health, and care plan

Employers with fewer than 50 employees who recruit a 16–18-year-old will not only receive the £1,000 incentive but their 5 per cent training costs are waived

Employers are exempt from paying National Insurance contributions for all apprentices under the age of 25 if their earnings are below the higher tax rate

Additional incentives

For further details on how these incentive work please contact the South Yorkshire Apprenticeship Hub.

Please note – the listed incentives are available at the date publication. Should the national government remove or amend any incentive then the South Yorkshire Apprenticeship Hub is not liable for any additional costs incurred by the employer.