Apprenticeship Levy Calculator
Calculate your Apprenticeship Levy liability, available training funds and plan optimal apprenticeship spending. 2026/27 UK rates.
The Apprenticeship Levy is a 0.5% tax on your total annual pay bill if it exceeds £3 million. You get a £15,000 annual allowance to offset against the levy, so in practice you only start paying once your pay bill crosses that threshold. The funds go into a digital apprenticeship account, topped up by the government at 10%, that you can spend on approved training programmes.
Here is what trips people up: the money in your account expires after 24 months if you do not use it. So if you are paying the levy but not running apprenticeship programmes, you are essentially handing HMRC free money. You can also transfer up to 25% of your annual levy funds to other employers in your supply chain, which is worth knowing if you work with smaller contractors.
If your pay bill is below the threshold you do not pay the levy at all. Employers with fewer than 50 employees that do not pay the levy contribute nothing towards training for apprentices aged 16 to 21, or aged 22 to 24 where the apprentice has an Education, Health and Care (EHC) plan or has been in local authority care — the government has funded 100% of the training cost in those cases since 1 April 2024. Everyone else co-invests: the government pays 95% of the training cost and you pay 5%. Training funding never covers wages, and the apprentice rate of £8.00 an hour applies from 1 April 2026.
According to the Department for Education, there were 337,140 apprenticeship starts in England in the 2022/23 academic year (DfE Apprenticeship Statistics, 2024). Whether you are a levy-paying employer or a smaller business accessing co-funded training, this calculator shows your exact liability and available training budget.
How to calculate your apprenticeship levy
- Enter your total annual pay bill (all employees)
- The calculator applies the £15,000 allowance and 0.5% rate automatically
- Add your headcount and the apprentice’s age to test the 100% funding rules
- See your monthly levy payment and annual training fund balance
- Plan your apprenticeship spending to use funds before they expire
Written by the CalcStack team
Figures for the 2026/27 UK tax yearlast verified Sources: HMRC Apprenticeship Levy guidance, HMRC rates and thresholds for employers
Employer Details
Planned Apprenticeships
Age at the start of the apprenticeship. Ages 16–21 unlock 100% funding for employers with fewer than 50 staff.
Levy Payer
£10,000
annual levy payable
| Item | Amount |
|---|---|
| Gross Levy (0.5% of pay bill) | £25,000 |
| Annual Allowance | -£15,000 |
| Net Levy Payable | £10,000 |
| Government 10% Top-Up | +£1,000 |
| Total Funds Available | £11,000 |
| Training Cost (5 apprentices) | £45,000 |
| Shortfall | £34,000 |
| Co-Investment on the Shortfall (5%) | £1,700 |
CalcStack Pro
Optimise your levy spend
Optimal Mix Planner
Best combination of apprenticeship levels to maximise fund use
Fund Utilisation Strategy
Monthly drawdown plan to avoid fund expiry at 24 months
Expiry Tracking
Track when each tranche of levy funds expires and plan accordingly
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Frequently Asked Questions
What is the Apprenticeship Levy?
The Apprenticeship Levy is a UK tax on employers with an annual pay bill of over £3 million. Introduced in April 2017, it is charged at 0.5% of the total pay bill. Employers receive a £15,000 annual allowance to offset against the levy. The funds collected are placed in a digital apprenticeship service account and can be used to pay for apprenticeship training and assessment.
Who pays the Apprenticeship Levy?
All UK employers with an annual pay bill exceeding £3 million must pay the Apprenticeship Levy. This is calculated on total employee earnings subject to Class 1 secondary NICs. Connected companies share a single £15,000 allowance. Approximately 2% of UK employers pay the levy, but they employ around 60% of the workforce.
What happens if my pay bill is under £3 million?
Employers with a pay bill under £3 million do not pay the levy. Instead, they access apprenticeship funding through co-investment: the government pays 95% of apprenticeship training costs and the employer pays 5%. Employers with fewer than 50 employees that do not pay the levy contribute nothing towards training for apprentices aged 16 to 21, or aged 22 to 24 where the apprentice has an Education, Health and Care (EHC) plan or has been in local authority care — the government has funded 100% of the training cost in those cases since 1 April 2024.
How long do levy funds last before they expire?
Apprenticeship Levy funds expire 24 months after they enter your digital apprenticeship service account. Funds are used on a first-in, first-out basis. If you do not spend your levy within 24 months, the funds are returned to the government. This makes it important to plan apprenticeship activity to maximise the use of available funds before expiry.
What can Apprenticeship Levy funds be spent on?
Levy funds can only be spent on apprenticeship training and end-point assessment costs with an approved training provider. They cannot be used for wages, travel expenses, work equipment, uniforms, or any costs not directly related to the apprenticeship training. Employers choose from government-approved apprenticeship standards at funding bands set by the Institute for Apprenticeships.
Can I transfer unused levy funds to another employer?
Yes, since April 2019, levy-paying employers can transfer up to 25% of their annual levy funds to other employers. This is often used to support smaller businesses in your supply chain. Transfers are arranged through the apprenticeship service account. The receiving employer does not need to pay the levy themselves. This is a useful way to avoid fund expiry.
What are the different apprenticeship levels?
Apprenticeships in England range from Level 2 (Intermediate, equivalent to GCSEs) through Level 3 (Advanced, equivalent to A-levels), Level 4/5 (Higher, equivalent to foundation degree), to Level 6/7 (Degree and Masters level). Training costs increase with level: Level 2 starts around £3,000-5,000, while degree apprenticeships can cost £18,000-27,000 over 3-4 years.
How does the 10% government top-up work?
The government adds a 10% top-up to monthly levy funds entering your apprenticeship service account. For example, if your monthly levy contribution after allowance is £10,000, the government adds £1,000, giving you £11,000 to spend on training. This top-up applies only to levy-paying employers and is added automatically each month.
Can existing employees do apprenticeships?
Yes, apprenticeships are not just for new hires. Existing employees can undertake apprenticeships to gain new skills or qualifications, as long as the training provides substantial new learning. This is a popular way for levy payers to upskill their workforce. The apprentice must spend a minimum of 6 hours a week on off-the-job training, the requirement that replaced the old 20% of working hours rule in August 2022.
What is the apprenticeship minimum wage?
The apprentice rate is £8.00 an hour from 1 April 2026. It applies to apprentices aged under 19, and to apprentices aged 19 or over who are in the first year of their apprenticeship. Once an apprentice aged 19 or over completes that first year, they must be paid at least the National Minimum Wage or National Living Wage for their age: £12.71 for those aged 21 and over, £10.85 for ages 18 to 20 and £8.00 for ages 16 to 17. Many employers pay above these minimums to attract and retain quality apprentices.