Additional funding is currently available from the government to pay for apprenticeship training. But what is the cost of setting up an apprenticeship scheme, and how much will it cost your business to hire an apprentice?

There are three main costs associated with employing apprentices: recruitment, training and salary.

Recruitment

If you engage with an Apprenticeship training provider, they can post vacancies on the Government platform, manage applications and provide you with a shortlist of candidates for consideration as part of its offering and cost structure. Employers can advertise apprenticeship vacancies at no cost via the government’s “Find an Apprentice” recruitment site.

Training

Apprenticeships require a proportion of time to be spent on training with a minimum 20% of all their time spent on off-the-job training, so you may wish to find a suitable approved training provider (which can also be done via the government portal). Funding is available however for training, although the amount depends on whether your business pays the apprenticeship levy and your apprentice’s circumstances.

  • If you are a levy payer (with an annual wage bill of more than £3m) you can access some or all of  this to fund your apprentice. The government will add 10% to this.
  • If your business doesn’t pay the levy, you are only required to pay 10% of the cost of training and assessing your apprentice. The government will top up the remaining 90%.
  • Extra funding is available if you are employing young people or those who have been in social care, and you could receive a grant of £1,000.
  • Businesses with under 50 staff will also see 100% of training and assessment costs paid if they recruit an apprentice aged 16-18.
  • Further support is available to SMEs who take on those with additional learning needs.

Additional funding is currently available for businesses taking on a new apprentice before 30 September 2021. See the latest here. 

  • Employers will receive £3,000 for new apprentices of any age who join their organisation from 1 April 2021 to 30 September 2021.
  • The incentive payment is in addition to the £1,000 employers already receive for hiring an apprentice who is aged 16 to 18 years old or under 25 with an education, health and care plan or who has been in the care of their local authority

Salary

The government has a National Minimum Wage and Living Wage calculator to check if you’re paying your apprentices correctly.

All apprentices are entitled to the same benefits as employees doing a similar job or at a similar grade, which, in addition to statutory rights like paid holiday and sick pay, may also include:

  • A workplace pension for apprentices who qualify
  • Company benefits like childcare voucher or cycle to work schemes
  • Insurance or voucher schemes your company operates
  • Access to additional support your business offers, such as coaching or mentoring
  • Redundancy rights in line with other employees

Read our beginner’s guide to setting up an apprenticeship scheme.