Taking on an apprentice is a cost-effective way of expanding or developing your workforce. The government fully supports employers who decide to take on an apprentice, with the offer of a £1,000 incentive subject to certain criteria.
There are different funding streams available to pay for an apprenticeship, levy and non-levy employers. Being a levy employer means having annual wage bill of more than £3million.
If you are a non-levy employer, you only play 5% of the total cost of training, with the government funding the remaining 95% so, for example, a level 2 Business Administration Apprenticeship costs £2,000 - as a non-levy employer you would pay £100 and the government would pay £1,900.
Small employers with less than 50 employees do not need to pay anything towards the training of a 16-18 year old apprentice as the government covers 100% of the cost of training. However, the employer still has to pay the apprentice's wage and the apprentice is your member staff with the same terms and conditions, contracts of employment etc, as you would provide for any other employee.
If you are a levy employer, 0.5% of your pay bill above £3million is ring-fenced for Apprenticeships training.
Levy paying employers who do not have sufficient funds in their digital Apprenticeship account will be required to pay an employer contribution for the month(s) where there were no funds available. This means the College will invoice you for 5% of the monthly cost, the government will cover the remaining 95%. This is particularly important if your wage bill fluctuates from month-to-month. Please note that the College will invoice these monies each quarter with the normal payment terms; non-payment of these monies may result in the government clawing back the full Apprenticeship funding.
There is also an incentive payment of £1,000 if you employ an apprentice who is between the age of 16 and 18. The government recognises that a 16 to 18 year old apprentice requires a higher level of supervision and pastoral care, so employers receive the additional payment of £1,000 to help cover these costs.
Some sectors can access additional grants for employing an apprentice eg construction and marine.*
See our key facts about Apprenticeship funding by clicking here.