Employer Guide

Helping you to understand the Levy


The Apprenticeship Levy is a government initiative that was originally announced in the 2015 Summer Budget. The government proposes to apply the Levy to large employers across all industries, throughout the country.

The Apprenticeship Levy is being introduced as part of the government’s plan to help fund 3 million new Apprenticeships by 2020. As a major commitment to increasing both the quality and the quantity of Apprenticeships in England, the government is putting the control in the hands of Employers around the country.

Employer Guide

Key Facts

How the Levy will affect your business

  1. The national Apprenticeship programme is being expanded from April 2017 through the Apprenticeship Levy.
  2. The Levy will apply to all large organisations with an annual payroll of over £3million per annum, regardless of whether they already employ Apprentices or not.
  3. It will be payable by employers in the UK at the rate of 0.5% of the payroll cost through PAYE alongside Income Tax and National Insurance.
  4. Employers will not pay the first £15k of the Levy, which effectively means that the Levy will only be payable on payrolls in excess of £3 million per year.
  5. All employers will be supported by the government with regards to the Apprenticeship training.
  6. Public sector organisations will also pay the Levy if their payroll meets the above criteria and in addition, 2.32% of their workforce must be Apprentices.



The Levy will be applied to all industries in the UK and will first come into effect in April 2017 at a rate of 0.5% of an employer’s wage bill and will be paid through PAYE. Each Employer will receive an allowance of £15,000 to offset against their Levy payment. The Levy payment will only be paid by Employers who have an annual payroll of more than £3 million, which represents only 2% of UK Employers.

Throughout this guide, we will share some of the key facts about the government’s new Apprenticeship Levy, how it will affect your business as well as providing information about how 3aaa can help your business.

Employer Guide

The Levy


Employer Guide Employers who pay the Apprenticeship Levy and provide Apprenticeships will be able to allocate their Levy contributions as digital vouchers to use to train their Apprentices. This voucher system only applies for Employers in England. Employers will be allowed to spend their digital vouchers within a period of up to 18 months – 24 months.

All employers will also receive a 10% ‘top-up’ payment. The government is also considering further top- up support for those employers who want to invest in more Apprentices. The aim is that employers who commit to Apprenticeships will be able to get out more than they pay in to the Levy, using the top up payments.

The aim of the Levy is to increase the investment from UK Employers in training through Apprenticeships, making it a long term solution to support growth and commitment from our country’s Employers.


The voucher is redeemed against the delivery of an Apprenticeship and completion of end-point assessment. Proof of the Apprenticeship will need to be submitted by the provider through the ILR. The evidence pack will include the learner agreement, the payment schedule, schemes of work etc.

Apprenticeship Levy Calculator


A. Employer of 250 employees, each with a gross salary of £20,000
Wage bill: 250 x £20,000 – £5,000,000
Levy Sum: 0.5% x £5,000,000 = £25,000
Allowance: £25,000 – £15,000 = £10,000 annual Levy Payment

B. Employer of 150 employees, each with a gross salary of £20,000
Wage bill: 150 x £20,000 – £3,000,000
Levy Sum: 0.5% x £3,000,000 = £15,000
Allowance: £15,000 – £15,000 = £0 annual Levy Payment

C. Employer of 100 employees, each with a gross salary of £20,000
Wage bill: 100 x £20,000 – £2,000,000
Levy Sum: 0.5% x £2,000,000 = £10,000
Allowance: £10,000 – £15,000 = £0 annual Levy Payment

Stay updated…

Stewart Segal (Director of Strategy, Policy and Funding – 3aaa)



What does the Levy mean for SMEs?

The Apprenticeship Levy will raise £3 billion in 2019-20, of which £2.5 billion will be spent on English Apprenticeships. This will mean that the investment in Apprenticeships will double and will also mean that SMEs will be supported to recruit and train apprentices. We expect that these employers will be able to work with their training providers in the same way as they do now.

To read Apprenticeships Reforms progress so far, please follow the link: Employer Guide
To read Nick Boles full statement on Apprenticeships, please follow the link: Employer Guide


How 3aaa can help

Actions and Advice

At 3aaa, we will offer you a 3 stage consulting service as we look to make your experience as simple and informative as possible. This service is available to both Levy payers and non-Levy payers.

  1. Free of Charge– Our support and guidance is completely free of charge. Find out how an Apprentice can help transform your business.
  2. Training Needs Analysis – Our team will get to know your business and help to identify any requirements that you have. We pride ourselves on providing the right young people for your business.
  3. One Stop Shop – Our team provide you with a comprehensive ‘Match and Fill’ service, ensuring that we match the skills of our Apprentices to the requirements of your business.

Our experienced and knowledgeable team is on hand to answer all of your questions.

Contact us now on:

adammcevoy-robinson@3aaa.co.uk 07714 472 477
employnow@3aaa.co.uk 0844 504 317


Sign up to our updates

To stay updated on the Levy, please sign up to our monthly newsletters, at the bottom of this page, which will give the latest expert information as it happens.