Work out exactly how much levy you pay, what sits in your digital account, and how far it goes — in under a minute.
How the levy works
Your levy is already paid. Use it.
If your annual payroll exceeds £3 million, you've been contributing 0.5% of it to the apprenticeship levy since 2017. That money sits in a digital account — and it expires after 24 months if unused.
1
You pay 0.5% of your payroll to HMRC
If your payroll is over £3m, 0.5% of it goes into your apprenticeship levy account every month, minus the £15,000 annual allowance.
2
You spend it on approved apprenticeships
The funds in your digital account can only be spent on approved apprenticeship training. Any unused funds expire after 12 months and return to government.
3
Run out of levy? You pay 25% of the excess
If your training costs exceed your levy pot, the government still covers 75% of the additional cost — you pay 25%.
4
Non-levy employers pay just 5%
If your payroll is under £3m, you're not a levy payer. You still access apprenticeships — the government covers 95% of training costs, you contribute just 5%.
The levy formula
(Payroll × 0.5%) − £15,000 allowance =Annual levy (expires after 12 months)
Levy calculator
Illustrative only — actual amounts may vary. For a full funding plan, book a call with our team.
Annual payroll£5,000,000
£500k£50m
Number of apprentices planned5
150
Employer typeLevy payer
Annual levy payment£10,000
You pay annually—
Total training cost£35,000
Your estimated contribution£0
Did you know? A levy-paying employer can transfer up to 25% of their unused levy to you — meaning your training could be fully funded at no cost. We'd be delighted to help arrange this. Talk to us →
Annual levy available£10,000
Breakdown
Monthly levy payment£833
Total training cost£35,000
Covered by your levy£10,000
Excess (you pay 25%)£6,250
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Worked examples
See how it works in practice
£3m
Payroll exactly at threshold
Levy due (0.5%)£15,000
Allowance offset−£15,000
Annual levy payment£0
Employer typeNon-levy (5% co-invest)
5 x Business Admin L3 (£5,000 each)£1,250 total (5% of £25,000)
£8m
Mid-size levy payer
Levy due (0.5%)£40,000
Allowance offset−£15,000
Annual levy payment£25,000
5 x Business Admin L3 (£5,000 each)£0 (fully covered by levy)
£50m
Large employer
Levy due (0.5%)£250,000
Allowance offset−£15,000
Annual levy payment£235,000
20 x Business Analyst L4£0 (fully covered by levy)
Common questions
Levy FAQ
What happens if my payroll is under £3 million?
You're a non-levy employer. You access apprenticeships through government co-investment — the government pays 95% of agreed training costs and you contribute 5%. For a £5,000 programme, that's just £250 from your business.
What if I have fewer than 50 employees?
If you employ fewer than 50 people and take on an apprentice aged 16–18, the government covers 100% of training costs. You pay nothing toward the training — just the apprentice's wages.
When does levy funding expire?
Levy funds expire 12 months after they enter your account. If unused, they return to government. This is one of the main reasons we work with employers early — to make sure levy funds are put to work before they're lost.
Can I use levy funding to train existing employees?
Yes. Apprenticeships aren't just for new hires. Levy funds can be used to upskill your existing workforce through apprenticeship programmes, provided the training delivers genuinely new skills and knowledge.
Can I transfer levy funds to another business?
Yes — you can transfer up to 25% of your annual levy funds to other businesses, including companies in your supply chain or smaller businesses that don't pay the levy. This is a great way to support partners while using funds that might otherwise expire.
Want a personalised funding plan?
Book a free call and we'll work through your exact situation — payroll, number of apprentices, which programmes, and what it'll cost you.