How to find apprenticeship funding for your business

Blogs 12 Aug 2020

Ready to nurture new talent? Find out how much training an apprentice costs, what funding is available and if your business is eligible.

Adding new skills and talent to your small business is exciting, but depending on the training course you choose, hiring an apprentice can seem costly.

We explain how much apprenticeship schemes cost and what funding is available for employers, so you can get one step closer to growing your business. You can find detailed guidance for employers in England hiring an apprentice. There is additional information available if you’re in ScotlandWales or Northern Ireland.

How much does training an apprentice cost?

Every apprenticeship standard has different associated training costs, and the amount the government will contribute to funding costs varies – you can view a list of apprenticeship funding bands here. For example, it is £11,000 for a roofer, £7,000 for a marketing assistant and £18,000 for a software developer.

Will I need to pay the apprenticeship levy?

You will only need to pay the apprenticeship levy if you are an employer with a pay bill over £3 million each year. If you don’t pay the apprenticeship levy, you will share the cost of training and assessment for your apprentices with the government - this is called ‘co-investment’.

What funding am I eligible for if I am based in England?

The amount of funding you’ll be eligible for will vary depending on the number of employees you have and the apprentice you’re hiring.

The government will fund all the apprenticeship training costs - up to the funding band maximum - if you have less than 50 employees and at the start of the apprenticeship the apprentice is:

All employers are eligible to receive £1,000, paid in two equal installments through your training provider, if at the start of the apprenticeship the apprentice is:

How are costs split between employers and the government?

If you have at least 50 employees, or your apprentice doesn’t meet the criteria above, you’ll share apprenticeship costs with the government.

  • You’ll pay 5 per cent of the costs of training and assessing
  • The government will pay the remaining 95 per cent, up to the funding band maximum
  • If the training costs more than this, you’ll pay the difference

For example, if the cost of training is £10,000 and this is below or matches the upper limit for the funding band, you’ll only need to pay £500 and the government will pay the rest (£9,500).

What if I’m in Scotland, Wales or Northern Ireland?

Are there any grants for apprenticeships?

Check with your local council to see if they offer any grants for smaller businesses taking on apprentices.

Who pays an apprentice’s wages?

As the employer, you’re responsible for covering the wages of your apprentice.

You must pay your apprentice for their normal working hours and the hours spent training as part of their apprenticeship (which is at least 20 per cent).

  • For 16 – 18-year olds, or those in their first year, this is the National Minimum Wage for apprentices.
  • If they’re aged 19 or over and have completed their first year, they’re entitled to the National Minimum Wage for their age.

What is off-the-job training?

At least 20 per cent of the apprentice’s time will be spent completing off-the-job training, where they learn the knowledge and skills required to perform their job role. This could be meetings with their trainer, completing assignments, working through course materials or attending events.

It’s your responsibility to provide any additional training your apprentice needs to carry out the work you’ve hired them for.

Supervision costs

You may wish to assign a member of your team to mentor your apprentice throughout their training and arrange weekly meetings to track their progress. In this case, you’ll need to weigh up the time your employee spends assisting your apprentice.

Where can I get more information?

Whether you’re looking to expand a department or you could use some additional support, you can find an apprenticeship online to see what’s on offer.

Visit the Apprenticeships employer hub for more information about hiring an apprentice or learn more on the government’s website.

Ready to hire an apprentice?

Get answers to your employment questions 24/7 with our employment advice line. FSB members can also visit FSB Legal Hub, home to all the employment documents, letters, templates and fact sheets your business needs.

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