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.
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
Higher & Degree Apprenticeships
If you are considering a higher or degree apprenticeship for your employees, we recommend reading the Employer’s Guide to Professional & Technician Apprenticeships
