Apprentice Levy

What is the apprenticeship levy?

The Apprenticeship Levy is a tax paid by employers with a payroll exceeding £3 million and is used to fund apprenticeship training. The levy is charged at 0.5% of an employer’s total payroll and is collected monthly through PAYE. Employers receive an annual allowance of £15,000, which reduces the amount of levy payable.

Levy contributions appear in a digital account, which employers can use to arrange and pay for apprenticeship training and End-Point Assessments. Funds must be spent within 24 months, after which any unused levy funds expire and return to the government.

From April 2024, levy-paying employers can transfer up to 50% of their annual levy funds to other employers, supporting wider apprenticeship access. Transfers can be made directly through the apprenticeship account to multiple employers.

If a levy-paying employer exhausts their funds, they can still enrol apprentices through the co-investment model. In this case, employers contribute 5% of the apprenticeship programme costs, with the government covering the remaining 95%.