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How do apprenticeships work?

Funded via the Apprenticeship Levy: Maximising training investment​

  • Levy paying employers can fund 100% of the tuition fees through their Apprenticeship levy
  • Non levy paying employers can access government funding to cover 95% of the tuition fees, meaning the employer will pay just 5% of the remaining tuition fees
  • Unused levy funds can be transferred to smaller businesses at the organisation’s discretion, fostering collaboration and expanding apprenticeship opportunities; however, unspent funds are reclaimed by the Government after 24 months

The Apprenticeship Levy is a UK Government initiative introduced in April 2017 to encourage employers to invest in apprenticeship training. It applies to all employers with an annual wage bill of over £3 million, who are required to contribute 0.5% of their payroll into a dedicated apprenticeship fund. This fund can then be used to pay the cost of apprenticeship training and assessment for new recruits or existing employees. This fund is managed through an online Apprenticeship Service account, giving employers control over how and where their funds are spent.​

For employers who do not meet the £3 million payroll threshold, the government offers generous co-investment funding. In this arrangement, employers only pay 5% of the training costs, while the government covers the remaining 95%. This ensures that businesses of all sizes can access high-quality apprenticeship programmes without facing significant financial barriers. Additionally, the levy encourages larger employers to collaborate with smaller organisations by transferring their unused levy funds to support apprenticeships in other businesses.​

The levy system is designed to create a sustainable framework for workforce development, addressing skill shortages and improving productivity across industries. For employers, it represents an opportunity to maximise their investment in employee training. By using the apprenticeship levy effectively, businesses can upskill their workforce while also contributing to the long-term growth of the UK economy.

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