How Apprenticeships in School are Funded

There are three elements to funding the cost of an apprenticeship:  


Employee Costs  

Wages and all other usual costs employees costs are paid by employers. Other commitments include: 
  • The time that apprentice spends during the working day developing their skills and knowledge - this will be a minimum of 20% of their time at work 
  • The time that their line manager spends helping them practice and embed their new skills at work and in the regular meetings with their apprentices and the training provider 
Apprenticeship Training & Assessment Costs  
  • Who pays for the cost of training and assessment depends on whether the school's employer is paying the Apprenticeship Levy 
  • The Levy is a tax paid to HMRC by all employers with an annual salary bill of over £3M. Each month the tax is paid is 0.5 % of the employer's salary bill 
  • If the employer does not pay the Levy, schools pay at most 5% of training costs and some may qualify for 100% funding

Employer Incentive Payments 

Government pays incentives to employers for apprenticeships: 
  • £1,000  (in addition to above) for hiring an apprentice: - aged 16 to 18 years old or  
    - under 25 with an education, health and care plan or who has been in the care of their local authority

For schools, there are four possible routes for funding to pay for apprenticeship training and assessment.  

1. Funded from the Employers ‘Apprenticeship Levy’:  
  • Any organisation / linked companies with a pay bill of over £3M annually pay 0.5 % salary bill every month to Treasury  
  • Government top this up by 10 %  
  • This combined fund sits in a digital Apprenticeship Levy ‘account’ for the employer to use for apprenticeship training  
  • Each monthly payment expires after 2 years if not used  
  • The training provider is paid directly each month through the employer's digital Levy account

2. Co-Funded partly by the employer partly by government:   
  • Employers with a pay bill less than £3M annually do not pay the levy 
  • in this case employers pay 5% and government pays 95% of the cost of apprenticeship training and assessment  
  • Employer pays the 5% to the training provider direct by invoice  
  • Government pays the 95% to the provider through the employer's digital Levy  account 
  • This option is also used if the school employer has used all of their Levy funding


3. Funded fully by government or a levy paying employer:
  • For school employers with a pay bill less than £3M annually and with  <50 employees - government funds 100% of the costs of apprenticeship training and assessment 
  • This is paid direct to the training provider through the employer's digital Levy account


4. Funded through a Levy Transfer 
  • Employers who cannot spend all their levy can donate up to 25% of it to any number of other employers to pay for  apprentices in non levy paying organisations, including schools  
  • Schools with >50 employees- can apply for any local Levy Transfer programme 
  • A Levy Transfer pays for 100% of the costs of training and assessment  


Apprenticeship funding can only be drawn down by training providers selected by schools and eligible for funding, and it can only be spent on the costs of training and End-Point Assessment.  


For further information

There are lots of helpful sources of information for Head Teachers and key support staff in schools to support their investigations towards producing their own schools plan.   

Maintained schools should ask their Local Authority for more information:  

Other schools can contact Growth Works with Skills. 

This information is provided in partnership with the Careers and Enterprise Company (CEC). For more information about CEC Careers Hubs please visit the Careers Hub Provider Access Policy.