Non Levy banner

Small to Medium Employer

Apprenticeship Funding

As a small to medium employer (with 50+ employees and a pay bill of less than £3 million) you’ll receive ‘co-investment’ funding from the Government. This means the Government will pay 90% of the Apprenticeship training costs and you will only pay the remaining 10%.

In addition, if the apprentice is aged:
• 16-18; or
• 19-24 and is a care leaver or has a Local Authority Education, Health & Care Plan
... you’ll receive a £1,000 bonus per apprentice, paid in two equal instalments.

This may mean that you receive more money back than you spend on Apprenticeship training. For example:

Total cost of Apprenticeship = £5,000
Employer co-investment (10%) = £500 plus VAT*
Government incentive payment for a 16-18 year old = £1,000
Employer gain = £400

Please note: as apprentices are employees of your company, you are responsible for paying apprentices at least the minimum wage.
*VAT may be recoverable if you are a VAT registered company.

Is co-investment funding just for recruiting a new apprentice?

Not at all. You can recruit new apprentices and put existing or new staff members, including graduates, on an Apprenticeship programme and access co-investment funding.

Apprenticeship training for existing employees must develop new or different skills.

How much will co-investment cost?

Each Apprenticeship programme will fall into one of 15 ‘funding bands’ ranging from £1,500 to £27,000. Therefore the 10% cost you will have to pay will depend on which funding band the type of Apprenticeship you wish the apprentice to do falls into.

The below example is for Funding Band 4

Total cost of Apprenticeship £3,000
Employer co-investment (10%)
(payable monthly by instalments)
£300 + VAT*
Maximum Government Co-investment (90%) £2,700


*VAT may be recoverable if you are a VAT registered company.

Is there a limit to the amount of Apprenticeship training we can do?

No. You can recruit as many apprentices and put as many existing and new staff on Apprenticeship programmes as you want. You will also receive an incentive payment of £1,000* for every apprentice aged:

• 16-18; or

• 19-24 who is a care leaver or has a Local Authority Education, Health & Care Plan.

*Incentive payments are made in two equal instalments of £500; the first after the apprentice has been on programme for three months and the second after the apprentice has been on programme for 12 months.  It may take up to nine weeks after the payment dates for the funds to be processed and transferred.

What are Apprenticeship levy funds transfers?

Employers who pay the apprenticeship levy are able to transfer unused apprenticeship funds to other organisations, to pay for apprenticeship training and assessment. A maximum of 10% of a company’s annual levy funds may be transferred, which is calculated from the total amount of levy declared during the previous tax year.

Transfers have been introduced in response to employer demand, allowing levy paying employers to spend some of their funding to help upskill the workforce of other employers, perhaps in their supply chain.

Levy paying employers are able to transfer funds to any employer and will have to agree the apprenticeships that are being funded by a transfer, with the employer receiving the funds. Employers receiving transferred funds will only be able to use them to pay for training and assessment for apprenticeship Standards and the transfer must cover the cost in full.

For more information go to the transferring unused apprenticeship funds to other employers page on GOV.UK, read this blog on 7 pointers to help employers prepare for transfers on the apprenticeship service and take a look at this short video.