Advice on the apprenticeship levy

1: What you have to pay

Employers are required to pay the apprenticeship levy at a rate of 0.5%, if their annual UK payroll is over £3 million. However, the Government will also provide an annual allowance of £15,000 to offset your levy payment.


Non-levy paying organisation


Levy-paying organisation


Annual pay billl:


Annual pay billl:


Levy calculation:

0.5% x 1,000,000 = £5000

Levy calculation:

0.5% x 10,200,000 = £51,000

Minus levy allowance:

5000 – 15,000 =

£0 annual levy payment

Minus levy allowance:

51000 – 15,000 =

£36,000 annual levy payment

2: How to get your money back

If you are a levy-paying employer, you must declare your levy through the PAYE process. You will then receive your funds every month in proportion to the number of employees based in England.

Levy funds can be managed through the dedicated online apprenticeship service and can be spent on apprenticeship training in England with an education provider.

Levy-paying organisations will also benefit from a 10% monthly top-up from the Government. For every £1 that enters your online account, the government will pay a further 10%, taking it up to £1.10 in value. 

Using the above example, assuming a levy-paying employer has all of their employees based in England, they will receive £3,300 a month. Any allowance not used will be carried into the following month, so you won’t miss out on additional government funding

You have 24 months to spend the funds in your account, otherwise they will be returned to the government.

3. What support you get if you don’t pay the levy

Recent funding reforms now provide incentives for businesses not paying the levy, as well as those who do not have enough funds in their online apprenticeship service account.

If you are a small employer, with fewer than 50 employees, the Government will pay up to 100% of the training costs within the funding cap. Additional support payments of £1000 are available for employers who take on apprentices aged 16 to 18, or 19 to 24 if they are either in care or with an Education and Health Care Plan.

63% of employers expect to need more staff with leadership and management skills in the years ahead.”