Levy and funding

The Apprenticeship Levy is a charge introduced by government to help fund their plans to deliver a step change in apprenticeship numbers and their quality. The levy is designed to put apprenticeship funding in the hands of employers and encourage them to invest in and create apprenticeships.

The levy applies to all employers across all sectors in the UK. The rate is set at 0.5 per cent of an employers’ pay bill, collected monthly via Pay As You Earn (PAYE). All employers have an allowance of £15,000, which means that the levy is applicable on pay bills over the first £3 million.

All employers have access to the Digital Apprenticeship Service whether they have paid the levy or not and use it to manage the government funding available to them to pay for apprenticeship training. All Levy-paying employers receive a 10 per cent top-up to their digital accounts funded by government. All employers with a digital account have 24 months to spend their funds, including top-ups, before they expire.

The levy came into force April 2017.

levy flowchart

What can the Levy be spent on?

The government has been very specific about what levy funds can and cannot be spent on. Funds can be used for:

  • Apprenticeship training and assessment (with an approved training provider and assessment organisation up to its funding band maximum).

Funds cannot be used for:

  • Wages
  • Statutory licenses to practice
  • Travel and subsidiary costs
  • Managerial costs
  • Traineeships
  • Work placement programmes
  • The costs of setting up an apprenticeship programme.

Levy payers

Non-levy payers

Small employer co-investment waiver

Funding bands

Funding rules

Funding incentives

What are the opportunities for employers?

Further information

The Government has produced further information on apprenticeship funding.