A GUIDE TO THE APPRENTICESHIP LEVY
What costs are involved?
A GUIDE TO THE APPRENTICESHIP LEVY
If you’re an employer with a wages bill of more than £3 million a year, you will have paid the Apprenticeship levy from 6 April 2017. You will report and pay your levy to HMRC through the PAYE process.
Less than 2% of UK employers pay the levy. Levy funds create opportunities for young people across the country, delivering the skills British businesses need. The levy gives employers control of their training.
Employers agree a total price for each Apprenticeship, which includes the costs of training and assessment. In England, the government will top up employers’ levy with an extra 10%, paid directly to employers’ Apprenticeship accounts. An employer’s wages bill is made up of the total amount of the employees’ earnings that are subject to Class 1 National Insurance contributions, such as: – wages – bonuses – commissions – pension contribution.
Non Levy paying Employers
Employers with a paybill of less than £3 million a year but who have more than 50 employees will be asked to contribute 5% towards apprenticeship training.
For those employers with a wage bill of less than £3 million and who have under 50 employees, Apprenticeship training is fully funded for 16 to 21 year olds, if over 21 years of age a 5% contribution is payable.
What are my responsibilities as an employer?
The responsibilities of the employer will be discussed in detail when you first meet with a member of our recruitment team. In general, the employer is responsible for ensuring:
- Your Apprentice must be given the opportunity for off the-job training with Elevated Knowledge’s training academy or at one of our partner training centres.
- On-the-job training and supervision.
- A Safe Working Environment.
- The Apprentice needs a written contract of employment and a minimum Apprenticeship wage (See table on page for full details)
- Provide a mentor within the work place
- There must be a genuine job available with a contract of employment long enough for an Apprentice to complete their Apprenticeship.
- Employers must pay an Apprentice’s wages and the role must help them gain the knowledge, skills and behaviour they need to achieve the Apprenticeship with support from the employer.
Employers need to have:
- an Apprenticeship agreement in place with their Apprentice for the duration of the Apprenticeship.
- a commitment statement signed by the Apprentice, their employer and the provider.
For employers who pay the apprenticeship levy and use the apprenticeship service, they will need to have:
- a contract for services with their main provider.
- an Apprenticeship in place for at least one year
- the Apprentice on the correct wage for their age, for the time they are in work, in off-the-job training anddoing further study. Apprentices wages must be consistent with the law for the time they are in work and in off-the-job training. Updates on progression and average weekly hours and changes to working patterns must be logged and checked with the training provider. The government is offering additional support to organisations with fewer than 50 employees.
