Apprenticeship funding updates all businesses should know about

The government is changing some of the funding rules for employers taking on apprentices, including different age groups and employer types. Here's what's changing, what you'll get, and how Realise can help you at every stage.

If you’re a non-levy employer

If you run a business with a payroll under £3 million, you will be classed as non-levy, which means you don’t currently pay into an apprenticeship service account fund.

From 1 August 2026, non-levy businesses will not have to contribute to training costs for apprentices aged 16 to 24. The government picks up 100% of the training and assessment bill, up to the funding band maximum for your chosen programme.

You still pay the apprentice's wage.

And from 1 October 2026, if you are a non-levy employer, you may receive £2,000 for every new apprentice - aged 16 to 24 - you bring on. The new rules say that your apprentices must have a practical period start date from 1 October 2026 onwards and must not have been employed by the employer for more than 90 days before that date.

The payment is made in two instalments:

• > £1,000 after 90 days in learning
• > £1,000 after 365 days in learning
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The apprentice must still be in learning when each payment is due. Non-levy employers using gifted levy to pay for the apprenticeship are still eligible

Also, employers don’t have to pay secondary (employer) National Insurance contributions on an apprentice’s wage, as long as they are aged under 25 on earnings up to the Apprentice Upper Secondary Threshold (currently set at £967 per week).

However, it’s worth noting that for apprentices aged 25 and over, non-levy employers will pay 5% co-investment towards the cost of training and assessment.

Non-levy employer examples:

1. A non-levy employer takes on a 17-year-old apprentice. 

The employer may be eligible for: 

• > Government-funded training and assessment, up to the funding band maximum.
• > The existing £1,000 employer additional payment for eligible 16- to 18-year-olds.
• >  The new £2,000 hiring payment, if the apprentice starts from 1 October 2026 and is still in learning after 365 days.
  > Employer National Insurance relief, if the apprentice is under 25 and earns below the relevant threshold.
•  

In simple terms: the employer could access funded training and up to £3,000 in employer payments, if all eligibility criteria are met.

• > Government-funded training and assessment, up to the funding band maximum.
• > The new £2,000 hiring payment, if the apprentice starts from 1 October 2026 and meets the 90-day employment rule.
• > Employer National Insurance relief, if the apprentice is under 25 and earns below the relevant threshold.
•  

In simple terms: the employer could access funded training and up to £2,000 in hiring support, if eligible.

3. A non-levy employer takes on a 26-year-old apprentice. 

The employer will pay 5% co-investment towards training and assessment costs, up to the funding band maximum. 

The £2,000 hiring payment would not apply because the apprentice is over 24. 

In simple terms: the employer contribution is usually 5%.

If you’re a levy employer

If you run a business with a payroll over £3 million, you will be classed as a levy-paying employer, which means you pay into an apprenticeship service fund.

Levy-paying employers will continue to use their apprenticeship service account to fund apprenticeship training.

However, from 1 August 2026, if a levy-paying employer does not have enough funds available in their apprenticeship service account, the employer co-investment rate will be 25% for new starts.

Levy employer examples:

 1. A levy-paying employer takes on an apprentice and has enough funds in their apprenticeship service account.

In simple terms: the apprenticeship is paid for through the employer’s levy account, up to the funding band maximum.

2. A levy-paying employer takes on an apprentice but does not have enough funds available in their apprenticeship service account.

For new starts from 1 August 2026, the employer co-investment rate would be 25%.

In simple terms: where levy funds are not sufficient, the employer contribution is 25%.

One thing to check first

Employers should make sure their apprenticeship service account is set up, and up to date, with their levy status and PAYE scheme currently added. This is especially important for non-levy employers because PAYE information will be used to check eligibility for the £2,000 hiring payment

Ready to find out what's available to your business?

Funding rules can be difficult to navigate, especially when they change. Talk to the Realise team – the earlier the better. We'll check which funded programmes fit your roles, confirm your eligibility for the grants, and handle the paperwork so you can focus on finding the right person. We can even recruit an apprentice on your behalf – for free!

Click here to speak to the team today and we’ll talk you through it all.