What is the apprenticeship levy?

The apprenticeship levy was introduced by the government in April 2017 and affects all businesses in England with a payroll over £3 million per year. Employers who are required to pay the apprenticeship levy must pay 0.5 per cent of their annual pay bill. Employers can draw down funds from the levy to spend on apprenticeship training.

Employers who do not pay the apprenticeship levy are also eligible for apprenticeship funding through the government's co-investment scheme. The government will fund at least 95% of the training costs with addition incentives if certain criteria are met.

Information for non-levy paying businesses

As of April 2019, levy-paying employers with unused apprenticeship levy funds may transfer up to 25 per cent of their annual funds to any employer. Employers may transfer funds to as many employers as they wish to be used for the cost of training and assessment of apprentices.

Information about transferring levy funds.

What is a degree apprenticeship?

Degree apprenticeships offer a new route to a degree qualification combined with on-the-job training. They are structured programmes that are designed in partnership with business and industry to develop a set of knowledge, skills and behaviours required to do a certain job role. Apprentices will spend the majority of their time in the workplace with real tasks and responsibilities that allow them to learn new skills while they work. Alongside this, they will be studying towards a degree, gaining the theory required to underpin their day-to-day role.

What is a standard?

An apprenticeship standard is a specification that determines the structure of an apprenticeship programme, covering three main criteria that make up an apprentice's occupational profile: knowledge, skills and behaviours. Standards are created by employers in the sector to ensure the apprenticeship will equip apprentices with practical skills and theoretical understanding required to master their job role.

Find an apprenticeship standard.

What are trailblazers?

Trailblazers are groups of employers that work together to create new apprenticeship standards with the process managed by the Institute for Apprenticeships. They are usually made up of groups of around ten employers based across the UK. Professional bodies and trade associations are often a part of trailblazer groups.

Employers can join existing trailblazer groups or form a new one to produce a new standard if one doesn't currently exist. Aston University encourages employers to get involved in trailblazer groups because this leads to more standards, more programmes and eventually more apprentices to fill skills gaps in the UK. Find out more.

What are the business benefits of apprenticeships?

Traditionally apprenticeships have been about developing your employees’ operational skills and capabilities for trade roles. Degree apprenticeships are a new way to train up employees by focusing on building key skills, behaviours and knowledge so they can develop in their role while working towards a degree.

Here's how your business could benefit:

  • Apprentices are useful from day one as they can implement their new skills and knowledge straight away at work.
  • Apprenticeship standards are designed by industry and professional bodies to address skills shortages. We'll work with you to tailor assignments to the needs of your business to get the most from your apprentice.
  • Apprentices will bring innovation and creativity to the workplace.
  • Education & Skills Funding Agency research shows that 76 per cent of businesses saw an increase in productivity thanks to their apprentices.
  • Training is paid for using the apprenticeship levy or the co-investment scheme so up to 100 per cent of apprenticeship training cost are covered.
  • You'll attract new talent to bring fresh ideas and add diversity to your organisation.
  • It’s a great opportunity to reward engaged high performing employees and keep them loyal to your organisation.
How much do degree apprenticeships cost?

There are 15 funding bands which apprenticeship standards are allocated to. The bands range from £1,500 to £27,000 per apprenticeship depending on the level and apprenticeship type.

Degree apprenticeships typically sit in band 15, costing £27,000. Using the IFA's apprenticeship search engine, you can check the funding band of all standards that have been approved for delivery, or look at our course pages for more information.

Who is eligible for a degree apprenticeship?

Degree apprentices can be either new or existing employees. It is up to the individual employer to set their entry requirements. For a Level 6 degree apprenticeship, candidates typically need a Level 4 qualification such as A Levels, BTEC, apprenticeship or equivalent. For a Level 7 degree apprenticeships candidates will need a good honours degree or a significant amount of work experience in the industry.

Additional entry requirements from the government include:

  • A minimum of Grade 4 or C in GCSE Mathematics and English or equivalent
  • Be a UK/EU/EAA resident for at least three years prior to starting the course •
  • Have left full time education when the apprenticeship starts • Be at least 16 years old
  • Right to work in the UK.
How long do degree apprenticeships take?

The length of a degree apprenticeship varies from programme to programme. Typically Level 6 degree apprenticeships last between three and five years depending on the apprentice's experience. A Level 7 degree apprenticeship lasts for approximately two to two and a half years.

What qualifications do degree apprentices achieve? 

Upon successfully completing a degree apprenticeship, learners are awarded an apprenticeship certificate as well as a full honours degree. For Level 6 degree apprenticeships this is a bachelors degree and for Level 7 programmes this is a postgraduate diploma, masters degree or MBA. In addition, some degree apprenticeships give the opportunity for apprentices to achieve accreditation with professional bodies.

Do degree apprentices need time off to study?

It is a requirement that apprentices spend 20 per cent of their working time undertaking off-the-job-training. This should be training that is completed outside of an apprentice's typical duties and helps them work towards achieving their apprenticeship. This includes attending teaching sessions both on campus and online, completing essays and assignments and practical training, such as shadowing and mentoring.

Can a graduate do a degree apprenticeship?

Yes, graduates are eligible for Level 6 degree apprenticeship funding, however, the apprenticeship must be significantly different to the degree they already hold to ensure that new skills, knowledge and behaviours are gained. It may be possible to accredit prior learning and reduce the length of the degree apprenticeship, this is assessed on a case-by-case basis.

Aston University also offers Level 7 degree apprenticeships which include qualifications such as MSc, MBA and PGdip. These programmes can be suitable for graduates, those with professional qualifications or extensive experience in their sector.

How are degree apprenticeships taught?

Each degree apprenticeship varies in terms of delivery, but typically programmes are taught through a combination of face-to-face teaching on campus here at Aston University, online sessions (such as lectures and tutorials) using our Virtual Learning Environment called Blackboard and workplace visits.

Employers are also jointly responsible for delivering training in the workplace, such as shadowing, mentoring, e-learning and practical training to satisfy the 20 per cent off-the-job-training requirement.

Advice on the Apprenticeship Levy

If an organisation has a payroll of over £3 million, it'll need to pay 0.5 per cent to the government.


What you have to pay

You are required to pay the apprenticeship levy at a rate of 0.5 per cent if your annual UK payroll is over £3 million. However, the government will also provide an annual allowance of £15,000 so employers can draw down the full amount of their levy funds to spend on apprenticeship training.

Here's how it works:

Non-levy paying organisationLevy-paying organisation
Annual pay bill:£1,000,000Annual pay bill:£10,200,000
Levy calculation:0.5% x £1,000,000 = £5,000Levy calculation:0.5% x £10,200,000 = £51,000
Minus levy allowance:

£5,000 - £15,000 =

£0 annual levy payment

Minus levy allowance:

£51,000 - £15,000 = 

£36,000 annual levy payment

You can use this apprenticeship levy calculator to work out if your organisation will pay into the levy, estimate how much you'll have to spend on apprenticeship training and the government's contribution towards the cost of training.

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 your employees based in England.

Levy funds can be managed through the dedicated online apprenticeship service and can be spent on apprenticeship training fees in England. Levy-paying organisations will also benefit from a 10 per cent monthly top-up from the government. 

For every £1 that enters your online account, the government will pay a further 10 per cent. 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.

What support you get if you don't pay the levy

The costs of training are supported by the government, covering 95 per cent of the course fees. Plus there’s no National Insurance to pay if the apprentice is under 25.

Employers with fewer than 50 employees could get up to 100 per cent funding if the apprentice is under 19 or if they are 19 to 24 and have previously been in care or have a local authority Education and Health Care Plan. Additional incentive payments of £1,000 are also available for employers who take on apprentices that meet either of these criteria.

As of April 2019, levy-paying employers with unused apprenticeship levy funds may transfer up to 25 per cent of their annual funds to any employer. Employers may transfer funds to as many employers as they wish to be used for the cost of training and assessment of apprentices.

More information can be found on Gov.uk