Glossary · UK
What is Apprenticeship Levy?
A payroll charge of 0.5% on the annual pay bill of larger employers, used to fund apprenticeship training.
Full Definition
The Apprenticeship Levy is a charge on larger employers, introduced in April 2017 to help fund apprenticeship training across the UK. It is set at 0.5% of an employer's annual pay bill, where the pay bill is broadly the total earnings that are subject to Class 1 employer National Insurance. Every employer receives an annual levy allowance of 15,000 pounds, which is offset against the charge, so in practice only employers with a pay bill above 3 million pounds a year actually pay the levy. The allowance is spread evenly across the year and reported through the payroll each month alongside PAYE and National Insurance. In England, employers that pay the levy can draw down funds, topped up by the government, through their apprenticeship service account to spend on approved training. Smaller employers that do not pay the levy access funding through a separate co-investment arrangement. The levy applies UK-wide for collection, but the way training funds are administered differs between England, Scotland, Wales and Northern Ireland.