Apprenticeships
Apprenticeship Levy Fact Sheet for Employers How will it work: From April 2017, the way the government funds apprenticeships in England is changing. Large employers across all industries will be required to contribute to the new apprenticeship Levy. The apprenticeship Levy is part of the government’s plan to help fund a further 3 million new apprenticeships by 2020. It is a major commitment to increasing both the quality and the quantity of apprenticeships in England. The reforms include giving employers the opportunity to add to the new apprenticeship standards alreadly available, by developing standards that meet their precise needs.
The facts: The Levy will apply to all large organisations with a payroll of over £3 million per annum, regardless of whether they alreadly employ apprentices or not.
Employers will not pay the first £15k of the Levy, which means that the Levy will only be payable by companies with payrolls in excess of £3 million per year. It will be payable by employers at the rate of 0.5% of the payroll cost through PAYE alongside income Tax and National Insurance. Public sector orgainsations will also pay the Levy if their payroll meets the above criteria and in addition, 2.23% of their workforce must be apprentices.
Employers who pay the apprenticeship Levy and provide apprenticeships will be able to allocate their Levy contributions as digital vouchers to use to train their apprentices. Employers will be allowed to spend their digital vouchers within a period for up to 24 months. All employers will also receive a 10% ‘top-up’ payment.
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Choose apprenticeship training and assessment
Plan your apprenticeship programme
Estimate how much funding you will have to spend on apprenticeships.
Find the right type of apprenticeship training for your business Choose a training provider
Find the right type of apprenticeship training for your business
Advertise a vacancy to recruit an apprentice Work with your training provider to post an apprenticeship opportunity If you are a levy paying employer, carry on to steps 4 and 5.
If you are a Non-levy paying employer, work with your training provider to complete the next steps.
1. Work out what your total pay bill is. Your pay bill is made-up of the total amount of your employees’ earnings that are subject to Class 1 National Insurance contributions. Employees’ earnings include any money they make they make from employment, such as: • Wages • Bonuses • Commissions • Pension contributions 2. Work out what 0.5% of your total pay bill is 3. Subtract the £15,000 allowance
The Levy will not affect funding for training apprentices who start their apprenticeship programme before 1st May 2017.
An employer’s guide to the digital apprenticeship service
Calculating what you have to pay:
Example An employer with an annual pay bill of £5,000,000 will need to spend £10,000 on the Levy: • Levy sum: 0.5% x £5,000,000 = £25,000 • Subtracting Levy allowance: £25,000 - £15,000 = £10,000 annual Levy payment
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Manage the funding for your apprenticeship
Register securely to set up an employer account View the current balance of your levy and any previous transactions Forecast your funding available in the future Find out support availiable if you don’t have enough levy
Start a new apprenticeship contract
Agree how much you want to pay a training provider from your levy account Manage payments to your training provider and see when they will be paid
Pause or stop a payment to your training provider
The digital service is coming soon. Want to see how the digital service might work? Email DAS@bis.gsi.gov.uk to test the prototype and tell us what you think.
To find out more use our online guidance or contact our employer helpline:
Phone: 08000 150 600 Email: nationalhelpdesk@apprenticeships.gov.uk Web: www.gov.uk/take-on-an-apprentice/overview
For more information contact us at apprenticeships@wiltshire.ac.uk