The Apprenticeship Levy Degree apprenticeships

The Apprenticeship Levy:

  • Is proposed to commence April 2017
  • Ensures 0.5% of pay bills in excess of £3 million
  • Will raise £3 billion annually
  • Is the only way to recoup through apprenticeship delivery
  • Will be paid via digital vouchers as part of the Digital

The Apprenticeship Service (DAS) is also launched April 2017

  • Proposed funding for non-levy payers –90% / 10%
The government believes that the rate of 0.5 per cent will deliver the increase in quality businesses have been asking for while making sure it does not place an unreasonable burden on employers.

Levy payer example

Annual payroll £10 million

Percentage of employees in UK = 100%


This is calculated per month based on levy payment of 0.5% less £15,000 allowance

£2916 per month with government top up of 10% = £3208 Levy per month

£38,496 Levy credit per year*

Total Levy from May 2017 – April 2019 = £76,992 Levy

Non Levy payers

As a Non-levy payer the government asks for 10% contribution to the cost of this training and government will pay the rest (90%). Monies will be paid directly to the training provider i.e. University and you will be able to spread it over the life time of the apprenticeship. As both you and the government make a payment, we call this 'co-investment'.

Every individual apprenticeship framework and standard will be allocated to a funding band. The upper limit of the funding band will cap the maximum price that government will 'co-invest' towards.

* Levy credit will expire after 24 months if not used. Levy payments are active from May 2017

Banding breakdown

Every apprenticeship will be placed in a funding band. The upper limit of each funding band will cap the maximum amount of digital funds an employer who pays the levy can use towards an individual apprenticeship.

That government will 'co-invest' towards, where an employer does not pay the levy or has insufficient digital funds.

Employer can negotiate the best price for the training they require;

  • If the employer wants to spend more than the funding band limit, using their own money, then they will be free to do that
  • Funding bands do not have a lower limit