Apprenticeship cost calculator

How much will taking on an apprentice cost you, and what funding is available?


When you’re thinking about taking on an apprentice, it’s important to have a clear view of how much it’ll cost your business.

It’s important to know, firstly, the government will help pay for apprenticeship training – up to around 95% or in some cases 100% of the costs – and there’s also extra funding of up to £1,000 depending on the apprentice’s age and circumstances.

You can use our apprenticeship cost calculator below to find out how much the training costs and what the wages will be, plus there’s extra information on the apprenticeship levy and the funding options available.

The costs for taking on an apprentice can vary, depending on the size of your company, the available funding band associated with the specific apprenticeship and whether or not you pay the apprenticeship levy.

Calculate your apprenticeship costs

It’s easy! Select your wage bill below, complete the form, and we’ll calculate the rest!

Under £3m wage bill
Over £3m wage bills

The GREAT NEWS is there are various funding options available for employers with less than a £3 million wage bill to help with these costs, please see the funding section below.

*This figure does not include any additional costs such as pension contributions (if applicable), benefits package or travel / equipment contributions you may wish to award your employees. This should be discussed and agreed at the interview and offer stage and where possible written into their contract of employment.

Available funding for apprenticeships

There are a number of funding options available to you, but the amount you’ll get will depend on the size of your wage bill.

For businesses with wage bills of less than £3m per year

If you have an annual wage bill of under £3m:

  • You don’t pay the apprenticeship levy and you will need to pay 5% of the costs of training and assessment for each apprentice you employ.

    These 5% training and assessment costs are paid directly by your business to the training provider on a schedule agreed between you and them.
  • The government will pay the remaining 95%, up to the funding band maximum. If your apprenticeship training costs exceed the funding band maximum, as the employer, you’ll need to pay the difference.
  • If your apprentice is aged 16-18 years, or is aged 19-24 with an education, health and care plan, or has been in the care of their local authority, the government will pay 100% of the training costs, up to the funding band maximum.

A key first step is for you to set up an online
apprenticeship service account as this allows you to access apprenticeship funding. Check out our handy DAS registration guide on how to do it.

A larger, levy-paying employer may also transfer some of their unused funds to your business to use for paying apprenticeship costs.

For businesses with wage bills over £3m per year

If your company has a £3m+ wage bill, you’re classed as a “Levy Paying” employer, which means:

  • The apprenticeship levy was introduced in April 2017 to help drive more apprenticeships in the UK and it is a mandatory tax that larger employers pay.
  • You’re already paying 0.5% of your annual wage bill into the apprenticeship levy.
  • The government will top up this fund by 10% to be used to help with training costs.
  • The funds are added into an Apprenticeship Service account that you can access online, but the money can only be used for training.

You have 24 months to use your Levy. If it’s not used within that timeframe, it then goes back to the government.

Levy paying employers also have the option to donate (or ‘gift’) their levy to smaller employers (i.e., those that do not pay the levy) if they will not use it themselves.

Apprenticeship funding from the government

Separately to any contributions made by the government towards training and assessment costs for smaller companies with an annual wage bill less than £3m, there’s also an apprenticeship funding payment for any size of employer when they take on an apprentice:

  • Your company will receive a £1,000 payment for all new 16-18 year-old apprentices (and those aged under 25 with an Education, Health and Care Plan, where this applies).

The Construction Industry Training Board (CITB) Levy

If you are a member of the CITB, there are extra grants available to contribute to the costs of training an apprentice. These grants can add up to £7,000 over three years, and a list of the eligible trades can be found on the CITB website. Just click below to find out more.

Visit the CITB website

Apprenticeship levy calculator

If your company is growing and you’re due to pass the £3 million+ wage bill threshold, you will automatically be required to pay the apprenticeship levy once you pass it.

Every business receives an apprenticeship levy allowance from the government of £15,000, spread across the year, which reduces the amount of levy they need to pay.

Working out what you need to pay will depend on when in the tax year you passed the threshold.

If you start paying the apprenticeship levy at the beginning of a new tax year

n the first tax month of the year, to work out what you will need to pay:

  • Calculate 0.5% of your monthly pay bill

  • Divide the £15,000 allowance by 12 (to get a monthly allowance figure)

  • Subtract the monthly allowance figure from the 0.5% sum of your monthly pay bill

  • You are left with the figure you need to pay in this first month of the tax year.

For the remaining months of the year:

  • Calculate 0.5% of your total pay bill since the start of the tax year

  • Add up the monthly levy allowance figures for each month since the start of the tax year

  • Subtract your combined monthly levy allowance figure from the 0.5% of your total pay bill for the year so far

  • Subtract any levy payments you have already made in that tax year

  • You are left with the sum to pay in that month.

If you start paying the apprenticeship levy part of the way through a tax year

You are able to use the full annual levy allowance even if you only become a levy-paying business part way through the tax year.

To calculate the amount of annual levy allowance that has been accumulated already in the current tax year:

  • Divide the full allowance amount by 12

  • Multiply the allowance figure by the number of months that have passed in the tax year already

  • You are left with the allowance amount for the first month that you report the levy. If there is some unused allowance after you have deducted it from 0.5% of your monthly wage bill, this can be carried over to the following month, as long as it falls within the same tax year.

You can find out more about paying the apprenticeship levy here.

Got any questions? We can help

If you have any questions about the cost of an apprenticeship to your business, the available funding options, or questions about the apprenticeship levy, we can help.