Hiring an apprentice

Using your apprenticeship levy

As an employer with a pay bill of more than £3 million, you’re required to pay the apprenticeship levy. You can manage funds using the apprenticeship service and spend it on training and assessing your apprentices.
The government will apply a 10% top up to the funds you have in your account.
If you don’t have enough funds, you just pay 5% of the outstanding balance and the government will pay the rest. This is up to the funding band maximum allocated to each specific apprenticeship.
If you exceed the funding band maximum, you’ll need to pay all the additional costs.
 
None Levy Organisations
 
How much it costs: As an employer that doesn’t pay the apprenticeship levy, you pay just 5% towards the cost of training and assessing an apprentice. The government will pay the rest up to the funding band maximum. You’ll pay the training provider directly and agree on a payment schedule.

If you employ fewer than 50 employees, the government will pay 100% of the apprenticeship training costs up to the funding band maximum for apprentices aged:

• 16 to 18
• 19 to 24 with an education, health and care plan provided by their local authority or has been in the care of their local authority

​If you exceed the funding band maximum, you’ll need to pay all the additional costs.

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Government

INCENTIVES

Incentive payments for hiring a new apprentice

​To help businesses offer new apprenticeships, employers will be able to claim an incentive payment for hiring a new apprentice between 1 August 2020 and 31 January 2021. For every apprentice that is a new employee to your business, you will get up to £2,000 if they are aged 16 to 24 and up to £1,500 if they are 25 or over.

​The incentive payment for hiring a new apprentice is designed to support employers to find the skills they need to help recover from the economic impact of COVID-19 whilst creating new jobs.
Employers can also receive an additional payment of £1,000 if the apprentice starts the apprenticeship aged:

• 16 to 18
• 19 to 24 years old and has an education, health and care plan provided by their local authority or has been in the care of their local authority

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Hire an apprentice who has been made redundant
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You can also use a new government service to help you hire apprentices who have been made redundant.
Many of these apprentices may already have the skills and knowledge you need. Hiring a new apprentice in this way could mean you have a work-ready apprentice who can quickly add value to your business, shortening the time you’ll see a return on your investment.
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It also means you are supporting an apprentice to complete their training and achieve their apprenticeship. If you hire an apprentice that has been made redundant, you can apply for incentive payments for hiring a new apprentice.
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Paying your apprentice

You’re responsible for paying your apprentice for their normal working hours and any training they do as part of the apprenticeship. You must pay them at least the National Minimum Wage rate depending on their age and the year of apprenticeship training they’re in.
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The rates from April 2020 are:

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