Apprenticeship Levy Calculator

The Apprenticeship Levy is a UK payroll tax introduced in April 2017 to fund apprenticeship training. Every UK employer — in any sector — with an annual pay bill over £3 million pays the levy, which is charged at 0.5% of the total pay bill. Every employer, regardless of size, also receives a £15,000 annual allowance which offsets the levy pound for pound. Because 0.5% of £3,000,000 exactly equals £15,000, in practice only employers with a pay bill above £3 million end up paying anything at all. "Pay bill" means the total earnings of your employees that are subject to Class 1 secondary (employer) National Insurance contributions — this includes wages, bonuses, commissions and pension contributions made through salary sacrifice, but the levy calculation uses gross earnings before the Secondary Threshold is applied (unlike employer NI itself, which only bites above the threshold). The levy is collected monthly via PAYE, at the same time as Income Tax and National Insurance, using 1/12 of the £15,000 allowance (£1,250/month) offset against 0.5% of that month's pay bill. If your pay bill fluctuates during the year, HMRC reconciles any under- or over-payment cumulatively. Levy funds appear in your online apprenticeship service account with a 10% government top-up, and must be used within 24 months of entering the account or they expire and cannot be recovered. Employers below the £3 million threshold do not pay the levy but can still access government-funded apprenticeship training via "co-investment" — the government pays 95% of training costs (5% employer contribution) as of 2026/27, rising for smaller employers under separate small-business support schemes. Connected companies or charities (those with common control, as defined by HMRC's connected persons rules) must share a single £15,000 allowance across the whole group rather than each entity claiming its own — this calculator assumes you are calculating for a single, non-connected employer or that you have already apportioned the group allowance.