Apprenticeships for non-levy paying employers
Apprenticeships provide an affordable and effective way for businesses to recruit new talent, develop existing employees and address skills gaps. If your organisation does not pay the Apprenticeship Levy, you can still access significant government funding and support to invest in apprenticeship training.
What is a non-levy employer?
A non levy employer is a business that does not pay the Apprenticeship Levy. The non-levy meaning refers to employers whose annual payroll falls below the £3 million threshold, allowing them to access apprenticeship funding through government support rather than levy contributions.
Understanding what is a non levy employer is important because funding arrangements differ from those available to levy paying organisations. Rather than using levy funds accumulated through payroll contributions, non levy employers access funding through government co-investment and other funding support schemes.
Apprenticeship funding for non-levy payers
One of the biggest misconceptions about apprenticeships is that they are only affordable for large organisations. In reality, apprenticeship non levy funding provides substantial support for SMEs looking to train new or existing employees.
The amount your business contributes depends on the age of the apprentice when they begin their training:
|
Apprentice age at start of training |
Employer contribution |
Government contribution |
|
16 to 24 years old |
0% |
100% of training and assessment costs up to the funding band maximum |
|
25 years old and over |
5% |
95% of training and assessment costs up to the funding band maximum |
Every apprenticeship standard is assigned a funding band. This sets the maximum value the government will contribute towards apprenticeship training and assessment. If you agree a training price above the funding band maximum, your business will need to pay the difference directly to the training provider.
To access funding, non levy employers must create an Apprenticeship Service account. This allows employers to reserve apprenticeship funding, approve apprenticeship records and manage their apprentices online. Training providers can also reserve funding on behalf of employers.
Apprenticeship funding reservations provide certainty that government funding will be available when the apprenticeship begins, provided eligibility requirements are met.
Levy transfer funding
Non levy employers may also be able to receive levy transfer funding from larger organisations.
Levy paying employers can transfer up to 50% of their unused levy funds to another employer. This enables smaller businesses to receive up to 100% funding for apprenticeship training and assessment costs up to the relevant funding band maximum.
This can make apprenticeships even more cost effective for SMEs looking to grow their workforce or develop existing employees.
Additional employer incentives
Further support may be available depending on the apprentice you employ.
Employers can receive an additional £1,000 payment when taking on an apprentice aged 16 to 18, or an apprentice aged 19 to 24 who has an Education, Health and Care Plan or who has previously been in local authority care.
From October 2026, eligible non levy employers may also receive a hiring payment of up to £2,000 when recruiting a new apprentice aged 16 to 24, subject to government eligibility criteria.
What can non-levy employers use Apprenticeships for?
Apprenticeships are much more flexible than many employers realise. They can be used to support both new recruits and existing employees across a wide range of business functions.
- Recruiting new talent: Apprenticeships provide a structured route for bringing new employees into your organisation and developing them with the skills your business needs.
- Upskilling existing staff: Current employees can gain new knowledge, skills and behaviours that improve performance and support career development.
- Reskilling employees: Employees who already hold qualifications can still undertake an apprenticeship if the programme delivers significant new skills and learning that is materially different from previous training.
- Digital, AI and leadership skills: Businesses can use apprenticeships to develop expertise in areas such as data analysis, cyber security, software development, IT support and digital marketing. For shorter trainings, employees can benefit from AI Leader Apprenticeship Units.
Benefits of Apprenticeships for non-levy paying employers
For SMEs, apprenticeships offer a practical and highly funded way to develop skills, improve productivity and prepare for future growth.
Cost effective workforce development
Government funding significantly reduces training costs, making apprenticeships one of the most affordable ways to invest in employee development.
Address skills gaps
Rather than relying solely on external recruitment, employers can build the specific skills needed within their own workforce.
Access to financial support
Non levy employers can benefit from government funding, levy transfers, employer incentive payments and apprenticeship hiring payments where eligible.
Flexible training aligned to business needs
Apprenticeships combine structured learning with real workplace experience, helping employees develop skills that can be applied immediately within their role.
Deliver greater return on investment
Apprenticeships help businesses maximise the value of their training budget by developing skills that can be applied directly in the workplace. This can lead to increased productivity, stronger business performance and improved employee retention, helping employers generate long term value from their workforce development investment. There are proven apprenticeship ROI on businesses.
Ready to get started?
As a non-levy employer, you may be able to access significant government funding to support apprenticeship training. Our team can help you understand your funding options, identify suitable programmes and navigate the apprenticeship process.
FAQs
What is the Apprenticeship Levy?
The Apprenticeship Levy is a government initiative that provides businesses with dedicated funding for the hiring and training of apprentices. It's an affordable way to bring in new talent and fill digital skills gaps in your organisation.
It is one of the most cost-effective ways for businesses to deliver an employee training programme, offering funding in return for programmes aligned to training in the most in-demand skills.
What does non-levy mean?
A non levy employer is a business with an annual UK pay bill of less than £3 million that does not pay the Apprenticeship Levy. These employers can still access government funding to support apprenticeship training.
How much do non-levy employers pay for apprenticeships?
For apprentices aged 16 to 24, the government covers 100% of training and assessment costs up to the funding band maximum. For apprentices aged 25 and over, the government contributes 95% and the employer pays the remaining 5%.
How do non-levy employers apply for apprenticeship funding?
Non levy employers can apply for funding through an Apprenticeship Service account. This allows employers to reserve funding, manage apprenticeships and access available funding support before an apprenticeship starts.
What roles can QA train apprentices for?
We specialise in digital and tech apprenticeships, and offer programmes a wide range of specialisms. Our apprenticeships are aligned to the skills organisations need most, such as our Data Analyst Level 4, Cyber Security Engineer Level 4 and Cloud Network Specialist Level 3 programmes.
More apprenticeship reads
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