How Much Does The Government Pay Towards Apprenticeships?

​Apprenticeships are one of the most effective ways for UK employers to build skills, improve retention and future-proof their workforce, but for many businesses, the real question is: how much does the government pay towards apprenticeships?

Understanding Apprenticeships

An apprenticeship combines practical work experience with structured training. Apprentices develop the skills, knowledge, and behaviours needed for their role while working towards an industry-recognised qualification. It’s a straightforward and effective way to build capability within the workforce.

Each apprenticeship ends with an end-point assessment to confirm that the apprentice is competent in their role.

Importantly, apprenticeships aren’t just for school leavers; they can be used to upskill existing employees of any age or role, as well as train new recruits. This flexibility makes apprenticeships an ideal way to strengthen your team while accessing government funds.

The Role Of Government Funding

Apprenticeships are funded and governed by the Department for Education (DfE), which publishes detailed funding rules each year.

The DfE’s goal is simple: to increase both the quantity and quality of apprenticeships across England by sharing the cost of training with employers. Depending on your business size and levy status, the government can pay anywhere from 95% to 100% of training and assessment costs.

How Government Funding Works

Each approved apprenticeship programme has a maximum funding band, which sets the total amount available for training and assessment.

• For levy-paying employers (those with annual payrolls over £3 million), this funding comes directly from the levy funds they’ve paid into their Digital Apprenticeship Service (DAS) account.
• For non-levy-paying employers, the government funds 95% of the training and assessment costs, while the employer contributes 5%. If the apprentice is aged 16–21, or aged 22–24 with an Education, Health and Care (EHC) plan or care leaver status, the government covers 100% of the training costs.

This co-funding approach ensures apprenticeships remain affordable while encouraging employers to invest in long-term skills development.

The Growth And Skills Levy Explained

The Growth and Skills Levy (previously known as the Apprenticeship Levy) is a 0.5% contribution on the total annual wage bill of any UK employer with payroll costs exceeding £3 million.

Levy payments are collected by HMRC and deposited into each company’s apprenticeship service account. Employers can then use these funds to pay for approved training and assessment, as well as other government-approved skills programmes, with the government adding a 10% top-up to every payment made.

Funds that remain unused after 24 months expire and return to the Treasury, making it vital for employers to plan how their levy will be spent.

Support For Non-Levy Employers

For non-levy-paying businesses, the government provides substantial support. Employers cover just 5% of the training costs, while the government funds the remaining 95%.

If you hire an apprentice aged 16–21, or a 22–24-year-old with an EHC plan or care leaver status, the government pays for apprenticeships the full 100%, removing all direct costs for the employer.

This funding model ensures that even smaller organisations can participate in national upskilling efforts without financial strain.

Additional Support And Flexibility

Levy-paying employers can also transfer up to 50% of their unspent levy funds to other businesses, such as suppliers or smaller partners, helping to support apprenticeships across their supply chain and sector.

This system not only prevents valuable funds from expiring but also strengthens collaboration and skills growth across industries.

Making The Most Of Government Funding

Understanding how much the government pays towards apprenticeships is the first step. The next is ensuring your organisation uses the funding effectively.

With the right planning and support, your apprenticeship programme can:

• Reduce recruitment costs by upskilling existing staff
• Improve retention and career progression
• Support your organisation’s ESG and Net Zero commitments
• Deliver measurable return on investment from your levy contributions

At Impact Academy, we help levy-paying organisations like yours navigate apprenticeship funding with confidence, ensuring every pound contributes to workforce growth and performance. Contact us for more information.

​Image source: Canva