How is the apprentice levy collected, allocated and who can use it?


Levy Collection:

  Employers with an annual pay bill exceeding £3 million contribute to the levy at a rate of 0.5% of their payroll, encompassing payments to off-payroll contractors deemed as ’employees’ under IR35 rules.

  Group businesses all pay into one central account.

  The collected levy funds are consolidated into a central government fund.


Accessing Funds through Apprenticeship Service Accounts (ASAs):

  All levy-paying employers, including those engaging off-payroll contractors, have access to an Apprenticeship Service Account (ASA), a digital platform where they can view their available levy funds.

  These funds can be utilised for apprenticeship training for both direct and deemed employees.

  Find a relevant course here:


Funding Apprenticeships for Smaller Employers:

  Portion of the levy funds is allocated to co-fund apprenticeship training for smaller employers with a pay bill under £3million.

  Smaller employers contribute only 5% of the apprenticeship training cost, with the government covering the remaining 95%.


Fund Usage and Expiry:

  Levy funds expire after two years if unused, but they are not lost.

  The Department for Education (DfE) can redirect unspent funds to support apprenticeships for smaller employers, aid training providers, or provide additional bursaries to apprentices.

  If you don’t have funding for the full cost of the course, you will be required to pay 10% of the total cost.

  Larger businesses can reallocate 25% of their own funding to another business.

  Apprenticeship courses are available to all employees, not just new employees.

  Courses range from introductory levels to masters equivalent.


In essence, the levy funds contributes to the overarching apprenticeship training budget, benefiting both large and small employers across the UK. Ther is a chronic under use of the training available to all staff and employers should look to access their funding for the benefit of training and the career development of there staff.