Depending on your company's wage bill there are different options of funding available to you.
Companies with wage bills over £3 million each year
These companies are required to pay the apprenticeship levy, as instructed by the Government, which will fund the apprenticeship training. This levy is calculated at a rate of 0.5% of the company's wage bill. There will be a fixed annual allowance of £15,000 to offset against the levy payment, and the Government will apply a 10% top-up to monthly funds going into the company's Digital Apprenticeship Service account (similar to online banking).
The levy payments can only be spent on apprenticeship training and assessment with providers like HRC. You can also transfer your levy fund to another organisation within your supply chain.
Companies with wage bills under £3 million each year
These companies are not required to pay the levy; however, this doesn't mean they can't access apprenticeship funding. The Government will pay a 95% contribution to the cost of any apprenticeship programme, and the company will pay the remaining 5%.
If a company with a wage bill under £3 million also has less than 50 employees and plans to recruit an apprentice aged 16-18, they won't need to many any cash contribution. The company will also receive an incentive payment of £1000 for hiring the individual.
Apprenticeship Levy calculator
Here are someworked examples of how the levy is calculated;
A. Employer of 250 employees, each with a gross salary of £20,000
Wage bill: 250 x £20,000 – £5,000,000
Levy Sum: 0.5% x £5,000,000 = £25,000
Allowance: £25,000 – £15,000 = £10,000 annual levy payment
B. Employer of 150 employees, each with a gross salary of £20,000
Wage bill: 150 x £20,000 – £3,000,000
Levy Sum: 0.5% x £3,000,000 = £15,000
Allowance: £15,000 – £15,000 = £0 annual levy payment
C. Employer of 100 employees, each with a gross salary of £20,000
Wage bill: 100 x £20,000 – £2,000,000
Levy Sum: 0.5% x £2,000,000 = £10,000
Allowance: £10,000 – £15,000 = £0 annual levy payment