Small Employer

Apprenticeship Funding

As a small employer (with 49 or fewer employees) you’ll not have to contribute towards the cost of Apprenticeship training if the apprentice is aged:
• 16-18; or
• 19-24 and is a care leaver or has a Local Authority Education, Health & Care Plan.

This means that the Government will pay 100% of the training costs. In addition, apprentices in the above categories will also attract a bonus payment of £1,000 each, payable in two equal instalments.

If the apprentice is not part of one of these two categories and therefore not eligible for full funding, you’ll be able to access Government co-investment funding. Training may be undertaken for new and existing employees, including graduates, as long as the Apprenticeship develops new or different skills.

Please note: as apprentices are employees of your company, you are responsible for paying apprentices at least the minimum wage.

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 is Government co-investment funding?

As a small employer, Apprenticeship training will be free for any of your employees who are aged:

  • • 16-18; or
  • • 19-24 and are care leavers or have a Local Authority Education, Health & Care Plan.

If you wish to train an employee aged 19+ who is not a care leaver/does not have a Local Authority Education, Health & Care Plan, you are able to access Government co-investment funding.  This means the Government will pay 95% of the Apprenticeship training costs and you will only pay the remaining 5%.

For example, an Apprenticeship costing £5,000 will mean:

  • • you will pay £250 plus VAT* (i.e. 5% of the Apprenticeship cost), which is equivalent to £5.77 inc VAT per week, or £25 inc VAT per month.
  • • the Government will pay £4,750 (i.e. 95% of the Apprenticeship cost).

*VAT may be recoverable if you are VAT registered.

How much will co-investment cost?

Each Apprenticeship programme will fall into one of the ‘funding bands’ ranging from £1,500 to £27,000. Therefore the 5% 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 £3,000

Total cost of Apprenticeship £3,000
Employer co-investment (5%)
(payable monthly by instalments)
£150 + VAT*
Maximum Government Co-investment (95%) £2,850


*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.

Can I manage my training with an Apprenticeship Service account?

If you’re an employer who doesn’t pay the Apprenticeship Levy, you can now manage your training and reserve Government funding all online.

By creating an Apprenticeship Service account, you’ll have access to a range of services and be able to select the training that is right for you.

How do I set up my Apprenticeship Service account?

Our Apprenticeship Service Engagement Team (ASET) can provide expert support and advice in creating and managing your online account.

ASET have been supporting Levy companies create accounts and navigate the system for over 2 years; combined with the fact we have our own NLTG account, we know first-hand how easy the system is to use.

ASET will be delighted to help you set up your account.  We can also manage your account for you, saving you time and letting you concentrate on growing your business!

Don’t miss out, call us today on 01254 300779 or email: and watch our handy guide of how to set up your account.

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 25% 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.