Small business owner? It’s less expensive to train your team than you might think…
How much does an Apprenticeship cost?
If your annual wage bill is less than £3m, you will only have to pay a maximum of 5% of the training costs and the Government will pay the remaining 95% if applicable.
If your apprentice is aged 16–18 (or up to 25 if they have an Education Health Care Plan) AND you employ fewer than 50 members of staff, then the Government will fund 100% of the cost of the Apprenticeship.
If your apprentice is aged 19+ or you employ more than 50 members of staff the Government will fund 95% of the Apprenticeship costs.
For example, the maximum* employer contribution for those who have to pay 5% employer contribution is:
Level 2 Adult Carer Apprenticeship: £150 + VAT
Level 3 Business Administrator Apprenticeship: £250 + VAT
Level 5 Operations or Departmental Manager: £350 + VAT
You can find the full list on the Education & Skills Funding Agency website: https://www.gov.uk/government/publications/apprenticeship-funding-bands
*NOTE: Some employers choose further specialist training to be delivered in addition to the Apprenticeship Standard. These additional elements cannot be funded through your Digital Apprenticeship Service Account.
What does the 95% contribution pay for?
Non-levy paying employers share the cost of training and assessing their apprentices with the government. This is called ‘co-investment’. Co-investment covers the paying for Apprenticeship training and assessment up to the funding band maximum. If the cost of training and assessment goes over the funding band maximum, you will need to pay the difference with other funds from your own budget.
You will be responsible for costs relating to your apprentices – such as wages, licenses to practise, travel and subsidiary costs, work placement programmes, or the setting up of an Apprenticeship programme.
Is there any additional financial support available?
Employers may also receive an incentive payment from the Government for recruiting an Apprentice.
£1,000 for each apprentice recruited that is 16–18 years old
£1,000 for each apprentice recruited that is 19–24 and has an Education, Health and Care Plan
Employers with fewer than 50 employees that recruit a 16–18 year old will not only receive the £1000 incentive, but their 5% training costs are waived
Employers are exempt from paying NI contributions for all apprentices under the age of 25 as long as their earnings are below the higher tax rate
How do I pay my 5% contribution towards the cost of the Apprenticeship?
We’ll send you an invoice for the 5% contribution at the start of the Apprenticeship which is payable within 30 days.
We know our stuff…
We understand it can be confusing getting to grips with introducing an apprentice into your business – but don’t worry, we’ve done it many times before, so if you still have questions or just want to chat something through, get in touch. We’re always happy to help.