How much does an apprenticeship costs an employer
Employers typically overestimate the cost of hiring an apprentice. Most of the actual training costs can be covered via government funding. So the only costs you’ll need to consider are wages and a couple of employment costs. Here is what you can expect to pay.
The two main costs of an apprenticeship
When hiring an apprentice, there are two costs to budget for: the training expense and the apprentice’s wage.
Training cost
Each apprenticeship sits within a funding band that sets the maximum training and assessment costs at no more than £27,000, based on the standard and level. In 2026, Apprenticeships were moved from the Apprenticeship Levy to the Growth and Skills Levy. Employers paying over £3 million annually in total payroll pay a 0.5% levy rate. Funds for training are drawn down from this levy.
Employers with payroll under £3m do not pay into the growth and skills levy, but can still benefit from funding, with the levy covering 95% of training costs.
Apprentice wage
An employer is required to pay their apprentice at least the National Minimum Wage for Apprentices, which is £8.00 per hour for employees aged under 19 years old. Employees aged 19 years or older in their first year of apprenticeship also fall under this wage rate. All other apprentices must be paid in accordance with the national minimum wage for their age group. You must also pay for their time spent in training, not just working hours.
How does apprenticeship funding work for employers?
Levy payers use their apprenticeship service account to pay approved providers. Non-levy employers reserve government funding through the same service. From 2026, training for under-25s in smaller businesses is fully funded, so many SMEs pay nothing towards training.
Examples of what you actually pay
Take an 18-month apprenticeship with training priced at £16,000.
Example 1: How much a levy-paying employer pays
The £16,000 comes from your levy account, so there is no separate training bill, only wages and on-costs. If your levy funds run out, you co-invest 25% of further training, and the government pays 75%.
Example 2: How much a non-levy employer pays
For an apprentice under 25, the government funds the full £16,000, so training costs nothing. You pay wages and on-costs, and may be eligible for a payment of up to £2,000 for recruiting a young apprentice aged 16 to 24.
Example 3: How much to pay when you upskill an existing employee
If you enrol an existing employee on an apprenticeship, costs may be significantly reduced. If you're a levy-paying employer, the £16,000 can be funded through your Growth and Skills Levy account. If you're a non-levy employer, government funding may cover most or all of the training costs, depending on eligibility. As the employee is already on your payroll, your primary investment is the paid time they spend completing off-the-job training while continuing in their role.
Extra costs to consider
You may also need to budget for their manager’s time mentoring, and for the cost of any equipment or software that may be needed. Also, do not forget about all the normal employment costs of employing someone, including holiday pay, sick pay, pension contributions, and employer’s national insurance.
Apprentices under 25 are exempt from employer National Insurance up to £50,270, saving you several thousand pounds a year.
Apprenticeships Return On Investment
The value of an apprentice goes beyond the wage bill. QA works with GIST Impact to measure Social Return on Investment and found QA apprenticeships generated over £580 million in social value in a single year, or £6.89 for every £1 invested.
FAQs
What is the Growth and Skills Levy?
It is government funding for apprenticeship training. Employers who are paying total wages over £3m per year will be required to contribute 0.5% towards this fund, to support the training costs of smaller businesses.
What are the employer responsibilities in an apprenticeship
To provide a real job and contract, to pay at least the statutory minimum wage, and to allow your apprentice (at least) 20% of their contracted hours to be used for off-the-job learning. To also provide a workplace mentor to help guide your apprentice during the course of their apprenticeship.
How do I look for a training provider?
You can use the UK Government’s “Find Apprenticeship Training Service” to look for providers that deliver apprenticeships in areas where you need them. Or contact a Training Provider such as QA.
How can QA help?
QA helps employers plan, optimise and deliver levy-funded training, from apprenticeships to targeted upskilling, ensuring your investment supports both immediate priorities and long-term growth.
How long will levy funds last?
From the start of the 2026/27 academic year, levy funds are expected to expire after 12 months, rather than the current 24 months.
Do employers get paid for having an apprentice?
Employers do not get paid for having an apprentice, but they do benefit from subsidies from the government to cover the cost of training.
How long does apprenticeship last?
Apprenticeships must last a minimum of twelve months in the UK, although an eight-month rule may apply in some situations. Apprenticeship units, a new type of apprenticeship programme, is much shorter.
More apprenticeship reads
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