Calculating the apprenticeship levy and non levy for employers Our ethos is partnership working and creating true win/win situations, As we say, everything starts with a conversation. So let’s talk. Safaraz Ali Safaraz@pathwaygroup.co.uk https://uk.linkedin.com/in/safaraz https://twitter.com/SafarazAli

1. APPRENTICESHIP REFORMS
A Quick Guide for Employers
04-01-2018

3. CALCULATING THE APPRENTICESHIP LEVY
How it works and how to calculate it if
you’re a large employer
Safaraz Ali
@SafarazAli
https://uk.linkedin.com/in/safaraz (E&OE)

4. WHAT WE KNOW ABOUT THE LEVY?
Levy mostly affected large employers from April 2017
• Affects employers with a pay role of £3m + across all sectors with
a compulsory 0.5% of payroll goes to a levy pot with a £15,000
offset
• Introduced to drive up the need for quality apprenticeships
• Money used for apprenticeship only supporting new or existing
employees
• Paid through PAYE
• Accessed by large employers (pay role of £3m+) with leftovers to
small businesses
• Employers receive £15,000 offset against payment of levy
• No NI payments for under employees who came through
apprenticeships with under £824 payment
• Employers will be given 24 months from April 2017 to use the
levy. If they don’t use it in that time, it will be given to other
employers to use.

5. CALCULATING THE LEVY
Assuming you’re a large employer with 300 employees on a
£20,000 annual gross salary
Payroll: 300 x £20,000 = £6,000,000
Levy: 0.5% x £6,000,000 = £30,000
Levy Allowance: £30,000 - £15,000 = £15,000.
£15,000 is the levy amount payment annually
10% top up by the Government = £15,000 + £1,500
giving £16,500 to spend on Apprenticeships

6. CALCULATING THE LEVY
Assuming you’re a large employer with 100 employees on a
£20,000 annual gross salary
Payroll: 100 x £20,000 = £2,000,000
Levy: 0.5% x £2,000,000 = £10,000
Levy Allowance: £10,000 - £15,000 = £0 payable.
No levy payment due as the levy allowance amount is less
than Limit allowed

7. SOME TERMS AND CONDITIONS
If you are part of a group of companies, each company is treated
separately when calculating the levy unless they’re all on one payroll
• Those employers paying the levy have months to use their levy voucher
For employers who currently receive grants, they can pay the voucher
to themselves based on how they choose to deliver
• If they are provider & employer, they need to update SFA with ILR
monthly to prove they’re paying for each apprenticeship
• This can also be managed through registered providers

8. ELIGIBILITY
• Unlike the old Apprenticeship funding system, under the Apprenticeship
Levy, there are no barriers to eligibility based on the qualifications of a
potential candidate.
• Employers can utilise apprenticeship training, whether they’re taking on
new entry-level staff, or seeking to upskill their existing staff.
• Candidates with degree level qualifications that were previously
ineligible for an Apprenticeship are now eligible under the new funding
rules.

9. NON LEVY EMPLOYERS

10. NON LEVY EMPLOYERS
As a non-Levy payer, you will have an
annual pay bill of under £3 million

11. NON LEVY
Funding bands and co-investment
• Every individual Apprenticeship framework and standard is allocated to a
funding band. The upper limit of the funding band will cap the maximum
price that government will ‘co-invest’ towards an Apprenticeship.
• The government will fund 90% of the agreed price for training and
assessment, and you as the employer will pay 10% + VAT.
• employers will need to pay their co-investment share directly to
training providers
• You will be able to pay in instalments over the lifetime of the
Apprenticeship; contact Pathway for more information on how you can
spread the cost.

12. SMALL EMPLOYER INCENTIVE
• The government recognised that smaller employers have historically played
a very important role in helping young and disadvantaged people into the
workforce for the first time.
• Grant to small employers to support them in taking on new apprentices aged
between 16 and 18 years of age are available. This is called the
Apprenticeship Grant for Employers 16-18 and is for £1000 paid in
instalments.
• Support is available for small employers employing fewer than 50 workers
to take on younger apprentices; the government will pay 100% of the
Apprenticeship training costs for these individuals. In addition to this, they
are extending this offer to small employers who take on a 19 to 24 year old
apprentice who was formerly in care or has a Local Authority Education,
Health and Care plan.
• Regional Grant may also be available and Pathway can assist with this
information.

13. WE ARE ALWAYS OPEN TO A CONVERSATION ON
HOW WE CAN SUPPORT YOUR TEAM
For more information on how the Apprenticeship Reform will affect
your business, and to see how Pathway Group can help, contact our
team of Business Relationship Managers on 0121 707 0550 or email
info@pathwaygroup.co.uk or join our LinkedIn group
https://www.linkedin.com/company/pathwaygroup/
Or Safaraz Ali
@SafarazAli
https://uk.linkedin.com/in/safaraz