- How funding works if you do not pay the apprenticeship levy
Smaller employers, who do not pay the apprenticeship levy share the cost of training and assessing their apprentices with the government. This is called ‘co-investment’.
For new apprenticeships starting on or after 1 April 2019 you pay 5% towards the cost of apprenticeship training. The government will pay the rest (95%) up to the funding band maximum.
1.1 Extra support for small employers
- -The government will fund all of the apprenticeship training costs, up to the maximum value of the funding band for the apprenticeship, for employers employing fewer than 50 people if, on the first day of their apprenticeship, the apprentice is:
- -Aged between 16 and 18 years old (or 15 years old if the apprentice’s 16th birthday is between the last Friday of June and 31 August); or
- Aged between 19 and 24 years old and has either: an EHC plan provided by their local authority; or
- –or has been in the care of their local authority as defined in paragraph P118.
- You must not request any employer contribution to the cost of an apprenticeship up to the maximum value of the funding band if an employer employing fewer than 50 people recruits an eligible apprentice.
- Before any apprenticeship starts, you must have evidence that the apprentice and employer are eligible for the waiving of the employer contribution. The employer must provide evidence that they employed an average of 49 or fewer employees in the 365 days before the apprentice was recruited (using the calculation set out in and you must keep this in the evidence pack.
- –We define the number of employees as the number of people with a contract of service. This must be calculated using the average number of employees with a contract of service in the 365 days before the apprentice is recruited. If the average number of employees is 49 and the recruitment of an apprentice takes this number to 50, the employer will still be eligible to receive this extra support. However, if the average number of employees is 50 and the recruitment of apprentices takes this number to 51, the employer will not be eligible to receive this extra support.
- If the price negotiated by you and the employer is above the maximum value of the funding band for the apprenticeship, the employer must pay in full the difference between the band maximum and the negotiated agreed price. This cannot be funded from an employer’s apprenticeship service account.
1.2 Support for English and maths training
English and maths are essential to supporting longer-term career prospects. This is why all apprentices must be supported to gain these essential skills and secure recognised qualifications.
All apprenticeships that started before 1 April 2019 will continue at the previous co-investment rate of 10%.
You can pay the difference from your own budget if the price of training is more than the funding band maximum.
As a smaller employer, you can reserve funds in the ‘finance’ section of your apprenticeship service account. You can also give your training provider permission to reserve them on their behalf.
What you’ll need to know:
- which apprenticeship standard the apprentice will be doing
- what month the apprenticeship training will start
Before the apprentice starts their training, you can change the apprenticeship start date and standard.
When you can use reserved funds
The reserved funds are available to use from the month of the apprenticeship start date and the following 2 months. The reservation will expire at the end of the 3rd month if you do not use it.
You could be eligible for extra funding depending on both you and your apprentice’s circumstances.
- Apprenticeship account roles and permissions
You need to think about who you want to have access to your apprenticeship service account. You can control what each person can do.
You can give staff members permission to:
- approve apprenticeship data
- approve costs for training which are agreed with the training provider
- reconcile payments to training providers
- sign the agreement with ESFA
You should give at least one other team member full access. This means that if the account owner is on holiday or leaves the organisation, someone else can sign an agreement or make changes.
- Registering on the apprenticeship service
Once you are ready to register on the apprenticeship service, you need to set up your account.
- Using your account
After you have registered, you will need to follow the instructions given in your apprenticeship account.
As an employer, you’ll be able to:
- access and manage apprenticeship funding
- receive a transfer of apprenticeship funds where eligible
- advertise vacancies on Find an apprenticeship
- search for apprenticeships and approved training providers
- choose approved training providers
- select suitable end-point assessment organisations
- give feedback on apprenticeship training
- give training providers permission to carry out some tasks on your behalf
- Create an account to manage apprenticeships
5.1. Before setting up your apprenticeship service account
- an email address you have access to.
- the Government Gateway login for your organisation (or you can use the accounts office reference number and employer PAYE scheme reference number if your annual pay bill is less than £3 million)
- authority to add PAYE schemes to the account
- authority to accept the employer agreement on behalf of your organisation
We’ll ask you to:
- create an account
- add a PAYE scheme on behalf of your organisation
- accept the employer agreement with the ESFA
5.2. Setting up multiple connected organisations in your account
You can add multiple connected organisations to the same account, if you want to manage all of your connected organisations in this way. You should register every organisation that will make an agreement with a training provider for apprenticeship training.
If you have set up your account with multiple connected organisations, your transfers allowance will be worked out as a total of all the organisations within that account.
You cannot use a single PAYE scheme across multiple connected organisations.
You cannot move funds between the accounts once they are set up.
We’re introducing payments to support organisations that take on new apprentices between 1 August 2020 and 31 January 2021.
You can apply for the payment from 1 September 2020, after you add new apprentices to your apprenticeship service account.
The payment is in addition to the existing £1,000 you’ll already get for taking on an apprentice who is:
- aged 16 to 18 years old
- under 25 and has an education, health and care plan or has been in the care of their local authority
5.3 What you’ll get
Employers will receive:
- £2,000 for apprentices aged 16 to 24
- £1,500 for apprentices aged 25 and over
You’ll get the payment in 2 equal instalments: 50% after the apprentice completes 90 days of their apprenticeship and the remaining 50% after 365 days. To get the full payment, the apprenticeship must last for at least one year.
We make payments on the 10th working day of each month. We’ll ask for your organisation’s bank details when you apply, so that we can pay you directly.
5.4 What you can use the payment for
The payment is different to apprenticeship levy funds and you can spend it on anything to support your organisation’s costs. For example, you could spend it on facilities, uniforms, your apprentice’s travel or their salary. You do not have to pay it back.
You can only apply for this payment for new apprentices who started their contract of employment between 1 August 2020 and 31 January 2021.
5.6 Support apprentices who have been made redundant
You can apply for the payment if you recruit apprentices who have been made redundant, as long as they’re new to your organisation.
5.7 Before you start
- the details of the apprentices you’re applying for
- your organisation’s bank account details
5.8 Get help
You can either:
Published 10 August 2020
5.9 Recruit apprentices who have been made redundant
Apprentices who have been made redundant may already have the knowledge, skills and behaviours to add value to your organisation. These apprentices can:
- fill key skill gaps in your organisation or your existing apprenticeship vacancies
- continue with their apprenticeship and build on their existing skills
We’ll share your details with apprentices who are interested in your opportunity, so they can contact you directly.
This guide explains what an employer needs to do and the things they need to consider if they want to employ an apprentice.
Incentive payments for hiring a new apprentice are available to any employer who takes on an apprentice as a new employee to their business with a contract of employment start date between 1 August 2020 and 31 January 2021.
For every apprentice that is a new employee to your business, you can claim £2,000 if they are aged 16-24 and £1,500 if they are 25 or over.
You can also claim the incentive by hiring an apprentice who has been made redundant.
The incentive will be paid in 2 instalments. As long as the apprentice remains employed by your organisation and in training after 90 days, you will be eligible to receive the first instalment.
If the apprentice remains employed by you and in training on their apprenticeship, you will be eligible to receive the second instalment after 365 days.
The incentive payment for hiring a new apprentice is designed to support employers to find the skills they need to help recover from the economic impact of COVID-19 whilst creating new jobs.
Employers will also continue to receive an additional payment of £1,000 if the apprentice starts the apprenticeship aged:
- 16 to 18
- 19 to 24 years old and has an Education, Health and Care (EHC) plan provided by their local authority or has been in the care of their local authority
This payment is passed on by the training provider to the employer.
- Terms, conditions and pay
To employ an apprentice, you need to check and meet the following terms and conditions.
Your apprentice should:
- be 16 years old or older by the end of the summer holidays
- not be in full-time education
- work in a role that is relevant to their apprenticeship
- work enough paid hours each week to undertake sufficient training to achieve their apprenticeship
Apprentices can be new employees or current employees already working for you.
We base the minimum duration of each apprenticeship on an apprentice working 30 paid hours a week or more. This includes any ‘off-the-job’ training they do.
- Off-the-job training
Off-the-job training means training done by the apprentice that is separate to their normal role.
This can be done at a college or training organisation, on your premises or online, or using a combination of these options.
For some apprenticeships, your apprentice may need to study for a work-based qualification from GCSE (or equivalent) up to degree level.
At least 20% of an apprentice’s normal working hours must be used for off-the-job training. This ensures your apprentice will have the knowledge, skills and behaviours they need for their chosen occupation.
Your apprentice may also need to study for maths and English qualifications as part of their apprenticeship. You must allow your apprentice time to study and take part in apprenticeship training within their normal working hours.
You can agree how all of this training will be provided when you choose a training provider. Read our employer guides to support off-the-job training for examples of how this works in practice.
- pay your apprentice at least the National Minimum Wagefor apprentices
- give your apprentice a job role (or roles) that enables them to gain the knowledge, skills and behaviours they need to achieve their apprenticeship
- allow your apprentice to combine learning in the workplace with formal off-the-job training
- pay them for the time they are in work and in off-the-job training
- give your apprentice a contract of employment that is at least long enough to allow them to complete their apprenticeship successfully
- Employers and apprenticeships: things to check
- Eligibility of apprentice
Examples include, but are not limited to:
- having the right to work in England
- spending at least 50% of their working hours in England
- being employed by you, a connected company or connected charity as defined by HMRC
- Agreements to sign
10.1 Apprenticeship agreement
You must sign an apprenticeship agreement with your apprentice at the start of their apprenticeship. This gives details of:
- the skill, trade or occupation the apprentice is being trained for
- the name of the apprenticeship they are working towards
- the dates during which the apprenticeship is expected to take place
- the amount of off-the-job training they will receive
You can write your own apprenticeship agreement or download an apprenticeship agreement template.
10.2 Commitment statement
You must sign a commitment statement with your apprentice and training provider.
This sets out how you, your training provider and the apprentice will support the successful achievement of the apprenticeship, including through experience gained on the job.
You should make sure that the person in your organisation that is managing the apprentice on a day-to-day basis is aware of the commitments that have been made.
The apprentice will only get their apprenticeship certificate after they have passed the assessments at the end of their study, demonstrating that they are occupationally competent.
You can write your own or use the apprenticeship commitment statement template.
It must include:
- the planned content and schedule for training
- what is expected and offered by the employer, the training provider and the apprentice
- how to resolve queries or complaints
10.3 Contract of employment
You must sign a contract of employment with your apprentice. This should give details including:
- working hours
- working conditions