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Levy or Non-Levy Paying Employer?

Levy or Non-Levy Paying Employer?




If you’re an employer with a pay bill over £3 million a year, you must pay the Apprenticeship levy from 6 April 2017. Read guidance on how to pay the Apprenticeship levy. You will report and pay your levy to HMRC through the PAYE process.


The levy will not affect the way you fund training for Apprentices who started an Apprenticeship programme before 1 May 2017. You’ll need to carry on funding training for these Apprentices under the terms and conditions that were in place at the time the Apprenticeship started.


Less than 2% of UK employers pay the levy. Levy funds will create opportunities for young people across the country, delivering the skills British businesses need.


The levy will give employers control of their training, 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 5%, paid directly to employers’ Apprenticeship accounts. An employer’s pay 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 contributions



Employers with a pay bill of less than £3 million a year will not need to pay the levy.


At least 95% of non-levy-paying employers’ Apprenticeship training and assessment costs in England will be paid for by the government. The government will ask these employers to make a 5% cash contribution to the cost, paid directly to the provider, and the government covers the rest (up to the maximum agreed funding band).

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