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The apprenticeship levy: an employer’s guide
What is the apprenticeship levy?
The apprenticeship levy is a UK government policy designed to fund apprenticeship training. Employers with a pay bill of more than £3 million a year must pay the levy, set at 0.5% of their annual pay bill, minus a £15,000 allowance. Payments are made monthly through PAYE.
Government guidance: Pay Apprenticeship Levy
These levy contributions go into a digital Apprenticeship Service account, which you can use to pay for approved apprenticeship training and End-Point Assessment in England.
Government guidance: Set up an Apprenticeship Service account
Unused funds expire after 24 months on a rolling basis; a key reason for businesses to plan how to spend their apprenticeship funding strategically.
How employers can use apprenticeship levy funds
Levy funds can be spent on:
- Apprenticeship training with an approved provider
- The cost of the End-Point Assessment
- Training up to the maximum value of the funding band for each apprenticeship standard
They cannot be used for:
- Apprentice wages or recruitment costs
- Travel, subsistence, or wider business overheads
Government guidance: Apprenticeship funding rules for employers
Non-levy employers and co-investment
If your business does not pay the apprenticeship levy, from 2026, employers will now contribute 25% towards further training costs. This was announced in the Autumn Budget of November 2025.
That said, through the Youth Guarantee, training for apprentices aged 16-24 will now be fully funded, removing a major financial barrier to developing early-career talent.
The threshold has been extended from under-22, to under 25 years of age. This means even more young people can access high-quality training at no cost to their employers.
What is an apprenticeship levy transfer?
If a business does not use all of its levy funds, it can transfer up to 50% of its unspent contributions to another employer. This is known as an apprenticeship levy transfer.
- Large employers can support their supply chain, local SMEs, or care sector partners by transferring unused funds
- Receiving employers benefit from 100% of training and assessment costs being covered (up to the funding band maximum)
- Transfers are arranged through the Apprenticeship Service account, either by creating a public pledge or agreeing a direct transfer with another business
Government guidance: Transfer your apprenticeship levy to another business
Why use levy transfers in the care sector?
For care providers, levy transfers are a powerful way to:
- Support smaller care homes and community providers with training costs
- Increase the supply of skilled care workers across the sector
- Reduce reliance on agency staff by creating sustainable career pathways
Key steps for employers
Levy-paying employers:
- Register for the Apprenticeship Service account
- Identify apprenticeship standards aligned to your business needs
- Choose an approved training provider and End-Point Assessment Organisation
- Add apprentices to your account so training payments can flow monthly
- Monitor fund expiry dates and plan starts accordingly
Making a transfer:
- Log into your Apprenticeship Service account
- Set up a transfer pledge by location, sector, or role, or connect directly with a partner business via the team at tend
- Approve applications and confirm funding commitment
Receiving a transfer:
- Open an Apprenticeship Service account
- Apply to a public pledge or accept a direct transfer
- Access fully funded apprenticeship training
Care sector examples:
- Upskill care assistants through Level 2 Adult Care Worker apprenticeships
- Develop leaders and registered managers with Level 4 or Level 5 standards
- Support NHS and social care partnerships by transferring unused levy to smaller providers
Why engage now?
- Funds expire after 24 months. Don’t lose your contributions
- Transfers make an impact by strengthening the wider care sector
- Government co-funding means apprenticeships remain affordable even for non-levy payers
- Need help? Book a call with one of our team who will walk you through the process and answer any questions
Apprenticeship levy FAQs
What is the apprenticeship levy?
The apprenticeship levy is a UK tax on large employers, designed to fund apprenticeship training. These funds can be used to pay for approved training and End-Point Assessment.
Do I have to pay the apprenticeship levy?
Only employers with a total pay bill over £3 million a year pay the levy. If your business falls below that threshold, you do not pay; but you can still access government funding for apprenticeships through co-investment.
What can apprenticeship levy funds be spent on?
Levy funds can be used for:
Approved apprenticeship training with registered providers
End-Point Assessment costs
They cannot be used for:
Apprentice wages or recruitment costs
Travel, accommodation, or subsistence
Management fees or wider business overheads
What happens if I don’t use my levy funds?
Funds in your Apprenticeship Service account expire after 24 months if not used. They are removed on a rolling monthly basis; oldest funds go first. That’s why it’s important to plan programme starts strategically.
What is an apprenticeship levy transfer?
If you don’t use all your levy funds, you can transfer up to 50% of your unused contributions to another business. Transfers are managed through your Apprenticeship Service account and can cover the full cost of apprenticeship training for another employer.
Who can receive levy transfers?
Any employer with an Apprenticeship Service account can receive transferred funds, including:
Small and medium-sized businesses (SMEs)
Charities and voluntary organisations
Care providers, schools, or local partners
Transferred funds cover 100% of the training and assessment costs (up to the funding band maximum).
Can levy funds pay apprentice wages?
No. Wages must be covered separately by the employer. Levy funds can only be used for training and End-Point Assessment.
What support is available for non-levy employers?
If you don’t pay the levy, you usually only contribute 5% of the training cost (the government funds the other 95%).
As of April 2024, apprentices aged under 22 (and some aged 22–24 who are care leavers or have an Education Health and Care plan) will be fully funded with no employer contribution.
Can I use levy funds to train existing staff?
Yes. Apprenticeships aren’t just for new hires. You can use levy funds to upskill and retrain your existing workforce, from frontline care workers to senior leaders.
– Register for the Apprenticeship Service account.
– Identify apprenticeship standards relevant to your business needs.
– Choose a registered training provider and an End-Point Assessment Organisation.
– Add apprentices and set up payments.
– Or let the team at tend guide you through every step.
Book a call with one of our specialists and we’ll show you how to make the most of your levy.
Not a levy-payer? We’ll help you access funding and even explore levy transfers available in your sector.
