A. Up to 5% - the government pays the remaining 95%

98% of businesses pay a maximum of just 5% of the apprenticeship training costs. The government pays the remaining 95%.

The remaining 2% of businesses (those with an annual wage bill over £3million) pay into an Apprenticeship Levy. The government tops up the Levy accounts by 10%. These funds can then be used to pay for apprenticeship training.

Understanding the costs

Before embedding apprenticeships into your organisation, it is important to recognise all the costs associated with a comprehensive training programme.

a) Training costs – Non-levy payers pay just 5% of the cost of apprenticeship training. This is between £75 and £1,350 across the length of the apprenticeship. There may be VAT, exam and certification fees on top of this. Ask the provider for the total amount before you proceed.

b) Wages – Employers must pay the person on the apprenticeship their wages for work and training time. The apprenticeship minimum wage is £3.90 per hour in the first 12 months (or if the apprentice is 16-18). However, most employers pay more than this. Think about a wage that will allow you to attract quality candidates to the role but acknowledges someone is learning on the job and not yet fully qualified.

c) Mentoring – You or a member of your team must make time to support the person on the apprenticeship and regularly liaise with the training provider. Think about how this could work within existing processes in your company.

d) 20%-off-the-job – The apprentice is training away from their general duties at least 20% of their paid time. This means they are not on their workstation doing their day job. Think about how you will see a return on investment for this time off the job.

e) Company costs – occasionally there are other costs companies face when offering apprenticeships. This could be an increase in insurance for taking on unqualified workers, expenses for overnight off-the-job training, etc. Think about your individual business.

Incentives and benefits

The main driver for apprenticeship training should be to improve your business performance, staff loyalty and customer satisfaction. However, there are several incentives and additional benefits of apprenticeship training that employers should be aware of.

• £1,000 for employing a 16-18-year-old – Businesses are given £1,000 over two instalments for employing a 16-18-year-old as an apprentice. £500 at three months and £500 on completion of the apprenticeship.
• £1,000 for employing some 18-24-year-olds – The 16-18 incentive is extended to businesses that employ 18-24-year-old apprentices that have previously been in care or have a learning difficulty or disability as recognised by an Education and Health Care Plan. This incentive can help you demonstrate you’re a disability confident employer.
• No training costs for small businesses – If you employ less than 50 people and train a 16-18-year-old or qualifying 18-24-year-old on an apprenticeship, your business does not have to pay any training fees. This means you could access £27,000 worth of training for free.
• No Employer National Insurance contributions – Any business that offers apprenticeship training to an employee under the age of 25, does not have to pay any Employer N.I. contributions. This saving is almost always more than the 5% contribution to training for non-levy payers. Plus, the more you pay the apprentice the higher the saving.
• Mandatory qualification – If your organisation needs staff to gain certain qualifications, apprenticeships can help. This could be specialist health and safety cards, industry-standard training or chartered status. This type of training may cost thousands of pounds but can often be included in the apprenticeship if it supports the knowledge, skills and behaviours needed to pass the programme. Ask your chosen training provider if they can include specific certificates.
• Attract top talent – Many people are interested in working for employers that offer qualifications and training as part of a work package. Your business could offer degree-apprenticeships to support graduate-calibre staff access debt free degrees. With the cost of university rising this is an attractive proposition for ambitious young people. 

How Apprenticeship Levy funding works can be found here: -https://www.gov.uk/government/publications/apprenticeship-levy-how-it-will-work/apprenticeship-levy-how-it-will-work

For a detailed overview of Apprenticeship funding in England read further here https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/788312/Apprenticeship_funding_in_England_from_April_2019.pdf