Minimum wage for apprentices

A National Minimum Wage (NMW) for apprentices exists and applies to all apprentices aged under 19 and apprentices aged 19 or over in the first year of their apprenticeship. 

The apprentice minimum wage can be found here and applies to time working and time spent training as part of the apprenticeship. Many employers pay above the national minimum wage.

Training costs for new apprentices (up to age 21) are fully funded by the government

Small businesses do not have to pay anything towards the cost of training a new apprentice up to the age of 21.

For apprenticeships starting on or after April 1st 2024, the government will pay 100% of the cost of apprenticeship training for anyone up to the age of 21.

Funding depends on apprenticeship start date

There are different funding rules for different apprenticeship start dates. You must follow the specific funding rules that apply to each different apprentice.

For apprenticeships starting after 1st April 2019, employers pay 5% towards the cost of apprenticeship training. The government will pay the rest (95%) up to the funding band maximum.

For apprenticeships that started before 1st April 2019, employers pay 10% of the cost, with the government paying the rest (90%).

Funding for apprentices aged 22 or over

For people aged 22 and over starting an apprenticeship after 1st April 2019, employers pay 5% towards the cost of apprenticeship training. The government will pay the rest (95%) up to the funding band maximum.

For people aged 22 and over who started an apprenticeship before 1st April 2019, employers pay 10% of the cost, with the government paying the rest (90%).

This applies to businesses that do not pay the apprenticeship levy.

Additional payments for providing apprenticeships

Incentives for care leavers and employers

Employers could get £1,000 for taking on apprentices who are:

• aged 19 to 25 years old and have an education, health and care (EHC) plan or have been in the care of their local authority

This payment is dependent on the apprentice giving their permission for the information about their care status to be shared with the employer. If this permission is not granted, the £1,000 payment will not be made.

Care leavers who start an apprenticeship can get a bursary of £3,000 for apprenticeships that began from August 1st 2023. Care leavers who started an apprenticeship before and including July 31st 2023 are eligible for a single payment of £1,000.

The bursary is paid by the Education and Skills Funding Agency (ESFA) to the apprenticeship training provider once the apprentice has been on the apprenticeship for at least 60 days, with the provider then passing the bursary onto the apprentice within 30 days of receiving it.

Incentives for hiring 16-18 year olds

Employers could also receive a payment of £1,000 if they take on an apprentice who, at the start of the apprenticeship, is:

• aged 16 to 18 (or 15 years of age if their 16th birthday is between the last Friday of June and 31st August.)

Paying employer National Insurance contributions

Employers may not need to pay Class 1 National Insurance contributions for an apprentice, if the apprentice is under 25 years old and on an approved UK government apprenticeship standard or framework.

Read HMRC's guidance on paying National Insurance contributions.

The apprenticeship levy

The apprenticeship levy is an amount paid at a rate of 0.5% of an employer’s annual pay bill if you:

• have an annual pay bill of more than £3 million
• are connected to any companies or charities for Employment Allowance purposes and have a combined annual pay bill of more than £3 million

You can benefit from this investment by training apprentices.

How funding works if you pay the apprenticeship levy

If you pay the apprenticeship levy, you will need to work with your payroll department to understand how much apprenticeship levy you are due to pay each month and submit to HMRC through the PAYE process.

The amount of funding you will receive is calculated by factors including the levy you declare to HMRC, your pay bill, and any government top-up.

Learn how funding works if you pay the apprenticeship levy >

Passing on apprenticeship levy funds to other businesses

Employers who pay the apprenticeship levy can pass on up to 50% of their unused levy to another employer, including small businesses, take on an apprentice.

This figure has increased from 25% as of April 1st 2024.

Can’t afford to take on an apprentice?

For those that would like to recruit an apprentice but can’t afford the costs involved, an flexi-job apprenticeship agency will hire an apprentice for you, place them with you and take care of payroll and tax. Learn more here >

Learn more about hiring an apprentice

Visit the Employers section of the government's apprenticeship website for more information on hiring apprentices.

You can also contact the Business Support Team at Buckinghamshire Business First at [email protected] or on 01494 927130.