The Apprenticeship Levy Explained: A Plain English Guide for Employers

If you employ more than 250 people in the UK, you're almost certainly paying the Apprenticeship Levy — and there's a good chance you're not making the most of it. Smaller employers can also access levy funding through government top-ups. Here's what you need to know.

What is the Apprenticeship Levy?

The Apprenticeship Levy is a 0.5% charge on payroll for UK employers with an annual wage bill over £3 million. The funds are paid into a digital account (your PAYE Service account via the Apprenticeship Service) and must be used to fund apprenticeship training. If they're not used within 24 months, they expire.

Many employers are sitting on levy funds they haven't used — and losing money as a result.

What can levy funds be used for?

Levy funds can only be used for apprenticeship training and assessment with an approved provider. They cannot be used for wages, travel, or general training costs. But within those parameters, they cover the full cost of apprenticeship programmes — which represent thousands of pounds of training value per employee.

What about smaller employers?

If your wage bill is under £3 million, you don't pay the levy — but you can still access apprenticeship funding. The government co-funds apprenticeship training for non-levy employers, covering 95% of training costs. You contribute just 5%.

What apprenticeships are available?

There are hundreds of apprenticeship standards available across virtually every sector — from business administration and customer service to digital marketing, engineering, and leadership. Apprenticeships are available at levels 2 through 7 (equivalent to GCSE through Master's degree).

How ESI-UK can help

ESI-UK is an approved apprenticeship provider working with employers across South Yorkshire and beyond. We manage the administrative complexity so you can focus on getting value from the programme.

​Get in touch at esi-uk.com/apprenticeships to find out what's available for your business.