All employers with an annual wage bill of over £3million pay the apprenticeship levy. The levy is used by the government to fund the development and delivery of apprenticeships.

Employers fall into one of two categories; levy-payer and non-levy payer.

Non-Levy Payer

Non-levy paying employers will share the cost of training and assessing their apprentices with the government - this is called ‘co-investment’. The contribution required by employers is 5%, and the government will pay the remaining 95%, up to the funding band maximum.

If you employ a 16-18 year old and have less than 50 employees your contribution will be £0 – so the training will be free.

The Apprenticeship Service have created a simple 7 step checklist for any non-levy employers who are looking to hire an apprenticeship, which includes information on setting up an account, advertising your vacancy, accessing incentive payments and the end-point-assessment process.

Levy-Payer

If you have a wage bill over £3million you will be classed as a levy-payer and will contribute 0.5% of your wage bill, less an allowance of £15,000.

The wage bill includes all earnings that are subject to class 1 National Insurance contributions, such as wages, bonuses, commission and pension contributions. There is a levy allowance of £15,000 per year. This means the total you will pay is 0.5% of your wage bill less £15,000.

If you do not have enough funds in your levy pot to contribute towards the cost of training, the balance will be co-funded by the government, and you will contribute 5% of the balance.

Approved Training Provider

Leeds College of Building are classified as an approved training provider for the delivery of apprenticeships. Apprenticeship frameworks and standards are allocated a funding band, all of the College’s apprenticeships are currently within the upper funding band limit.

The government apprenticeship website provides a step by step guide on choosing a framework or standard and selecting a training provider and assessor.

Apprenticeship Service

The Apprenticeship Service is now available to both levy and non-levy payers. Non-levy payers can find further information here.

The service allows you to:

  • select an apprenticeship standard
  • choose the training provider or providers you want to deliver the training
  • choose the organisation that will assess your apprentices
  • post apprenticeship vacancies
  • set the price you’ve agreed with your training provider
  • pay for apprenticeship training and assessment
  • check the balance in your account

Useful link: Apprenticeship Service