Apprenticeship Levy

About The Levy

By 2020, the government wants to fund three million Apprenticeships for SMEs and Micro SMEs. This will change the way in which Apprenticeships are designed, delivered, assessed, funded and paid for.

The introduction of the Apprenticeship Levy on 1st May offers a great opportunity for businesses to get a more bespoke experience from work-based learning. Government Trailblazer reforms mean the funding methodology has pivoted and gives employers better control on duration, training and assessment to get the perfect outcome.

0
%
of employers agree that apprentices make their workplace more productive.

How can working with the Grimsby Institute Group help?

0
of businesses plan to increase their Apprenticeship numbers in the future.

With a robust track record, we offer managed services as well as consultancy, guidance and full account management on both direct delivery and subcontracting. This includes recruitment and matching service for support, recruitment practices, screening, organising interviews and feedback. Through the group or our strategic partners we can also help for progressions into higher and Degree Apprenticeships.

These new reforms give businesses a number of new opportunities, find out how to get the most out of this by getting in touch for a chat.

Route map - How it works

  • Step 1

    HMRC collects the levy payment monthly through PAYE

  • Step 2

    Funds in Digital Apprenticeship Service (DAS) account. The government top-up your levy pot with a further 10% of funding

  • Step 3

    Member of staff joins Apprenticeship programme

  • Step 4

    Apprentices receive their training and assessments

  • Step 5

    Monthly deductions from DAS account

  • Step 6

    Any unused levy funds expire after 24 months

Calculate what you will pay

The levy will only impact your business if you have a pay bill of over £3m, which is based on the total amount of earnings subject to Class 1 secondary employers NIC.

Each employer will have an allowance of £15,000 to offset against their levy payment and the levy will be deducted on a monthly basis, where your pay bill is over £250,000.

Calculate how much your levy payment will be for your business by using our levy calculator.

What is the company's annual wage bill?

Levy Sum: 0.5% x (wage bill) = £

Subtracting levy allowance: £ - £15,000

Annual levy payment: £

Examples of what you might pay

Employer A
Employer A has 250 employees, who each earn £20,000
The employer will have a pay bill of £5,000,000
The government will take 0.5% of £5,000,000 totalling £25,000
The employer receives a £15,000 allowance to offset against the levy
The total annual levy payment would be £10,000

Employer B
Employer B has 100 employees, who each earn £20,000
The employer will have a pay bill of £2,000,000
The government will take 0.5% of £2,000,000 totalling £10,000
The employer receives a £15,000 allowance to offset against the levy
The total annual levy payment would be £0

Our National Apprenticeship Offer

Our Grimsby Institute Apprenticeship Offer

What classes as a larger employer?
A company with a payroll more than £3 million.

What is the Levy?
Paid as 0.5% of the pay bill, you get a £15k allowance (which is taken off the bill) with a government-funded 10% monthly top up.

How do you calculate the Levy?
Work out your total pay bill, calculate 0.5% and subtract the allowance.

How will the levy be collected?
Automatically through PAYE alongside income tax and national insurance.

0
%
of businesses intend to keep offering Apprenticeships in the future.

What classes as an SME?
Businesses need more than 50 employees and less than £3 million payroll.

How does the costing work?
An initial 10% must be paid to your provider (either upfront or on a finance plan) with 90% coming from the Skills Funding Agency following successful application to the Register of Apprenticeship Training Providers.

What if I already employ apprentices?
Any that have started before 1st May will be subject to terms and conditions when they started.

0
%
feel that Apprenticeships reduce staff turnover.

What classes as a Micro SME?
These are employers with 49 employees or less.

How does the costing work?
Micros get full funding from the procured allocation of the Register of Apprenticeship Training Providers paid directly by the Skills Funding Agency.

Does this effect controls on programme planning?
No, all incentives including funding cap negotiation, incentives, planning and assessment are all the same.

NB: Businesses with any apprentices under the age of 19 will receive a £1,000 payment.

0
%
of employers used an external training provider for their Apprenticeships.
Large (Levy paying) employers

What classes as a larger employer?
A company with a payroll more than £3 million.

What is the Levy?
Paid as 0.5% of the pay bill, you get a £15k allowance (which is taken off the bill) with a government-funded 10% monthly top up.

How do you calculate the Levy?
Work out your total pay bill, calculate 0.5% and subtract the allowance.

How will the levy be collected?
Automatically through PAYE alongside income tax and national insurance.

0
%
of businesses intend to keep offering Apprenticeships in the future.
SMEs

What classes as an SME?
Businesses need more than 50 employees and less than £3 million payroll.

How does the costing work?
An initial 10% must be paid to your provider (either upfront or on a finance plan) with 90% coming from the Skills Funding Agency following successful application to the Register of Apprenticeship Training Providers.

What if I already employ apprentices?
Any that have started before 1st May will be subject to terms and conditions when they started.

0
%
feel that Apprenticeships reduce staff turnover.
Micro SME

What classes as a Micro SME?
These are employers with 49 employees or less.

How does the costing work?
Micros get full funding from the procured allocation of the Register of Apprenticeship Training Providers paid directly by the Skills Funding Agency.

Does this effect controls on programme planning?
No, all incentives including funding cap negotiation, incentives, planning and assessment are all the same.

NB: Businesses with any apprentices under the age of 19 will receive a £1,000 payment.

0
%
of employers used an external training provider for their Apprenticeships.

Get further information

Get all the information you need about Employer Strategies, SMEs, Micro SME and Levy strategy for large employers

FAQS

Apprenticeships can be used to upskill your current workforce or to recruit new employees. Apprentices cannot have a qualification above Level 4 (i.e. anyone with a degree or higher) and must have been resident in the EU for the past three years.

Learners must be employed on a full-time basis with a minimum salary of £3.30 per hour, however you are able to offer higher wage packages if you wish.

The levy will begin from April 2017 and will be collected on a monthly basis, based on ‘live’ HMRC payroll data.

There are certain employers who will be required to contribute towards the cost of their apprenticeship training outside of the levy system, such as those whose pay bill is less than £3m per tax year.

If your business fits this criteria, you will be required to co-invest a small proportion of funding towards the cost of apprenticeship training. The government will contribute a large proportion of funding, which will cover a large percentage of the costs of apprenticeships training.

If you are a non-levy-paying employer, you will still need to pay for your apprenticeship training to co-fund it but it will not be collected by HMRC, the proposals are that for every £1 the employer puts in the government matches this with £9.

The vouchers will last for 18 months from the time they appear in your digital account. If they are not spent within this time, they will expire.

Apprenticeships we currently offer