Apprenticeship funding differs depending on the size of the employer:
Levy payers: large employers
Large employers are classed as businesses with a wage bill of £3m or more. They already pay the Apprenticeship Levy. This is 0.5% of total wage bill minus a £15K allowance. The Levy is paid alongside the company’s PAYE bill, placed into an online Apprenticeships account and topped up with a 10% Government contribution.
Employers use the funds they have already paid into this account to cover the costs of apprenticeship training and assessment.
If you’re a large employer and you haven’t yet starting spending funds in your Apprenticeship account, Mode can help you with this. Don’t forget, unused funds in employers’ Apprenticeship accounts expire after 24 months. Notably, if you have used up all of your levy you can still enrol candidates onto the programme. Providing you have spent your levy funds, the government will fund 90% of the programme for additional apprentices.
Employers with a wage bill of less than £3m do not have to pay the Apprenticeship Levy. Thave 90% of their apprentices’ training costs met by the Government; they pay 10%. That being the case, when training apprentices with non-levy payers, Mode obtains the 90% funding directly from the Government. Then we invoice the employer for remaining 10%.
There is no apprenticeship funding to cover wages but employers are exempt from paying national insurance for apprentices under 25.
Additional apprenticeship funding
Employers who recruit a 16 to 18 year old apprentice get a payment of £1000. Similarly, if they recruit a 19 to 24 year old who has an Education, Health & Care plan they will also get £1000.