The Apprenticeship levy is a government change to encourage growth in Apprenticeships – 3 million by 2020. Employers paying over £3m in PAYE will have 0.5% of this deducted through their PAYE bill by HMRC. This money can only be spent on Apprenticeship training for existing or new staff.

The Calculation

PAYE amount x 0.5% minus £15,000 gives the cost that will be deducted. Companies can write this tax off or look to utilise it through training their staff using local Apprenticeship providers.

Estimate your Apprenticeship Funding and Levy *

* Provided by the Skills Funding Agency

Levy vs non-Levy

Levy paying companies will be required to use the Digital Apprenticeship Service (DAS) to see how much levy fund they have to utilise, this updates monthly. On DAS they can also select their preferred provider to support them with specific vacancies. They are open to choosing more than one provider, but only over different vacancies.

Non-levy payers are split into two categories – under and over 50 employees. Fewer than 50 employees will continue as normal with no financial input for 16-18 year old starts; 19+ are a 10% contribution. Employers with over 50 employees will split the cost of the apprentice with the government and pay 10% of the cost. Costs vary based on the Apprenticeship programme. Both non-levy paying groups will be able to access financial support for apprentices aged 16-18, or priority learners in the form of two instalments of £500.

Frameworks to Standards

The cost of an Apprenticeship is also changing. Course costs will come under 15 bands ranging from £1,500 – £27,000. The cost will be attached to the new Standard as it is released.

One of the biggest changes with the Apprenticeship reform is the move from Frameworks to Standards. Standards have been agreed in a consultation process between small and larger employers. They have agreed a number of attributes that should be achieved on an Apprenticeship Standard and these will be delivered, and continually assessed, in preparation for an end point assessment.

The new standards may not always have formal qualifications attached to them. As a Good college with Outstanding features, Fareham College is ensuring the delivery of relevant qualifications alongside the Standards, to ensure participants’ progression opportunities.

Standards will still take a minimum of a year and a day to complete and will still require completion of Functional Skills English and Maths.

The Government are publishing updates regularly about the Apprenticeship Levy.


If you have any questions please contact the Fareham College Employer Services Team on 01329 815153 or email where we will be pleased to help.


Independent information can also be found at GOV.UK.