Apprenticeship Levy


In April 2017 the government introduced the Apprenticeship Levy to all employers charged at 0.5% of an employer's pay bill. A HRMC allowance of £15,000 is applied to all employers, meaning only those with a payroll in excess of £3 million will have a levy allocation which can only be spent on apprenticeships. The government will also apply a 10% top up to levy paying employer's accounts ensuring employers can take out more than they put in. Levy contributions are made monthly and those not used expire after 24 months.

What counts as your pay bill?

Your pay bill will be based on the total amount of earnings subject to Class 1 secondary National Insurance Contributions (NICs). Although earnings below the secondary threshold are not counted when calculating an employer’s NICs, they will be included for the purposes of calculating the amount of levy the employer needs to pay.

Earnings include any remuneration or profit coming from employment, such as wages, bonuses, commissions, and pension contributions that you pay NICs on. We will not charge the levy on other payments such as benefits in kind, subject to Class 1A NICs.

How to calculate the levy, examples:
Example 1: Example 2:
Employer of 250 employees, each with a gross salary of £20,000 Pay bill: 250 x £20,000 = £5,000,000 Levy calculation: 0.5% x £5,000,000 = £25,000 Allowance adjustment: £25,000 - £15,000 = £10,000 annual levy payment Employer of 100 employees, each with a gross salary of £20,000 Paybill: 100 x £20,000 = £2,000,000 Levy calculation: 0.5% x £2, 000, 00 = £10,000 Allowance adjustment: £10,000 - £15,000 = £0 annual levy payment

Please note: Employers who have multiple payrolls only have one £15k allowance however, the allowance can be shared between employers connected by ownership or control.More information on the employer guide to the levy.

For information on the new standards please click here or see below for a quick guide.

Milton Keynes College have a team of Apprenticeship experts who can work with you to explain the apprenticeship changes, develop new programmes and assist with recruitment.

Contact us on: 01908 637056 or

Access to the Levy Pot

This levy pot will be put in the hands of employers through the new digital apprenticeship system which allow employers to manage their levy balance, select providers and manage their programme.

Non Levy Employers

For those employers who don’t pay the levy, funding will be available via MK College as it is now and some elements of the digital apprenticeship system will be available to assist with selection of apprentices and programmes.

Standards and Assessments

Although some current apprenticeship frameworks are still available, apprenticeship standards and assessments are being introduced to ensure the apprenticeship market is fully employer designed and led. Apprenticeship standards are at an occupation level, so are designed for specific job roles, they focus on the knowledge, skills and behaviours expected from an individual in the role, and are available from level 2 to level 7. Not all standards contain qualifications however, MK College will work with employers and candidates to develop a personalised pathway including configurations of training, progress checking, observation, qualifications and mock assessments.

Apprenticeship assessments are delivered independently, they cannot be undertaken by the standard delivery partner. They are an end to end point assessment looking at skills, techniques, concepts and theories learnt through delivery of the standard. The assessor will determine whether the apprentice is competent in their role and apply a grade to reflect this.

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