Apprentice Levy

What is the apprenticeship levy?

The apprenticeship levy is a tax paid by employers with a payroll of more than £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.

Levy contributions appear in a digital account which can be used by the employer to arrange and pay for apprenticeship training. The funds can only be spent on apprenticeship training or End-point Assessment.

Levy paying employers can transfer up to a maximum 25% of their annual levy funds to other employers, they can make the transfer directly through their apprenticeship account to as many employers they choose.

If levy paying employers use all their levy funds they can still enrol apprentices but through the co-investment model. This means that employers will be required to pay just 5% of the apprenticeship programme cost, and the government will cover the remaining 95% through the process of ‘co-investment’.

After 24 months any unused levy funds expire and return to the government.

Levy Calculator

To see if your business is liable, enter your payroll in to our levy calculator below. Once you know how much you will be paying in to the Levy, we can help you get the best out of the deal.

Total Payroll (£):

0.5% levy charge:

Less £15,000 allowance:

10% top up to your Levy charge:

If each apprentice costs £15,000 over 3 years (on average), this equals £5,000 per apprentice per year. With the allowance of
£60,000 you would get value for money by hiring 12 apprentices.

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