Apprenticeship Levy Calculator 2025/26
Calculate your Apprenticeship Levy liability: 0.5% of payroll above £3 million, with £15,000 annual allowance. Find out how much you owe and how to use your funds.
Last updated: March 2026
UK Apprenticeship Levy Calculator 2025/26
Find out your annual levy liability, monthly payments, and available training fund
Apprenticeship Levy: Quick Reference Table 2025/26
Formula: Annual Levy = (Annual Pay Bill × 0.5%) − £15,000 allowance
| Annual Pay Bill | 0.5% of Payroll | Less Allowance | Annual Levy Due | Monthly Payment | England Fund (+10%) |
|---|---|---|---|---|---|
| £3,000,000 | £15,000 | −£15,000 | £0 | £0 | £0 |
| £4,000,000 | £20,000 | −£15,000 | £5,000 | £417/mo | £5,500 |
| £5,000,000 | £25,000 | −£15,000 | £10,000 | £833/mo | £11,000 |
| £10,000,000 | £50,000 | −£15,000 | £35,000 | £2,917/mo | £38,500 |
| £20,000,000 | £100,000 | −£15,000 | £85,000 | £7,083/mo | £93,500 |
| £50,000,000 | £250,000 | −£15,000 | £235,000 | £19,583/mo | £258,500 |
England 10% top-up: For every £1 paid into the digital apprenticeship service account in England, the government adds 10p. So a £10,000 annual levy becomes £11,000 of available training funds. This top-up does not apply in Scotland, Wales, or Northern Ireland.
How the Apprenticeship Levy Works: A Full Guide
The Apprenticeship Levy was introduced in April 2017 to fund apprenticeship training across the UK. It is a mandatory payroll tax paid by all UK employers whose annual pay bill exceeds £3 million. The levy is calculated as 0.5% of the total annual pay bill, minus a £15,000 allowance. For a business with exactly a £3 million pay bill, the calculation results in £0 of levy due. Any business above this threshold contributes to the national apprenticeship training fund.
Levy payments are collected monthly via PAYE alongside income tax and National Insurance. Employers declare their pay bill and levy liability each month in their PAYE submission. There is no separate registration process — if you run payroll, HMRC will calculate your liability automatically. Levy funds are then made available in the employer’s digital apprenticeship service account, where they can be used to pay for approved apprenticeship training programmes.
Who Pays the Apprenticeship Levy?
Any employer — in the public, private, or voluntary sector — with an annual pay bill above £3 million must pay the levy. The pay bill includes all wages, salaries, bonuses, and commissions, but excludes employer National Insurance and employer pension contributions. Connected companies (companies under common control) must share the £15,000 allowance between them, so a group of 5 connected companies has a combined allowance of £15,000, not £75,000.
Public sector employers pay the levy on the same terms as private sector businesses. NHS trusts, universities, local councils, and central government departments are all liable if their pay bill exceeds £3 million. Given that most sizeable public bodies have pay bills well into the hundreds of millions, the levy represents a significant cost — but also a significant training resource if used effectively.
How to Use Your Apprenticeship Levy Funds in England
In England, levy funds are accessed via the apprenticeship service (apprenticeships.education.gov.uk). Once registered, your digital account shows your available balance, which is your paid-in levy plus the government’s 10% top-up. You use the account to:
- Find and select approved apprenticeship training providers
- Agree on apprenticeship standards and funding bands with your provider
- Authorise payments from your account to your training provider each month
- Track each apprentice’s progress and end-point assessment
Funds can only be spent on apprenticeship training and end-point assessment. You cannot use them for recruitment, wages, travel, or any costs other than qualifying training. Each apprenticeship standard has a maximum funding band — if your training provider’s price exceeds the band, you pay the excess yourself.
The 24-Month Expiry Rule
Unused levy funds expire 24 months after they enter your account. If you paid £833 into your account in April 2025, those specific funds will expire in April 2027 if unspent. This rolling expiry means that businesses with large levy obligations but no active apprenticeship programmes lose their funds back to the government. Planning is critical: start your apprenticeship programme design at least 6 months before funds start expiring.
Levy Transfers: Share Your Funds
Levy-paying employers in England can transfer up to 25% of their annual levy to other employers — including those in their supply chain, industries, or local areas. The receiving employer uses transferred funds just like their own levy — to pay for apprenticeship training. Transfers are voluntary and can be a powerful tool for building a skilled supply chain without wasting levy funds that would otherwise expire.
Non-Levy Payers: Co-Investment for Small Businesses
Businesses that do not pay the levy (pay bill £3 million or less) can still hire apprentices through a co-investment arrangement. The employer pays only 5% of the apprenticeship training costs; the government funds the remaining 95% (up to the funding band maximum). There is an even better deal for smaller employers: if you have fewer than 50 employees and hire an apprentice aged 16 to 18 (or aged 19 to 24 with an education, health and care plan), the government pays 100% of training costs — you pay nothing.
Scotland, Wales, and Northern Ireland: Key Differences
The levy is collected the same way across the whole UK. However, the devolved nations receive a share of levy receipts through the Barnett Formula and use the money for their own skills programmes. In Scotland, the levy funds Modern Apprenticeships and other skills programmes through Skills Development Scotland. Wales uses levy receipts for its Welsh Apprenticeships programme. Northern Ireland funds its Higher Level and Level 2/3 Apprenticeships. Employers in these nations cannot access the English digital apprenticeship service account or the 10% government top-up.
Maximising ROI from Your Apprenticeship Levy
- Audit your levy spend annually: Compare levy paid vs. training funds committed. Most employers — especially in the public sector — waste 30–50% of funds.
- Use apprenticeships for upskilling existing staff: Apprenticeships are not just for school leavers. Degree-level apprenticeships (Levels 6 and 7) can upskill experienced managers, finance professionals, and engineers.
- Plan intake cycles: New apprentices starting in September align with academic cycles and reduce drop-out.
- Transfer funds: If your spending is below 75% utilisation, consider transferring surplus levy to supply chain partners — which builds goodwill and supports recruitment pipelines.
- Monitor the 24-month clock: Set calendar reminders when each monthly levy batch was paid in. Start training commitments well before expiry.
Frequently Asked Questions: Apprenticeship Levy
Expert Reviewed — Uses 2025/26 Apprenticeship Levy rate (0.5%) and £15,000 allowance. Last verified: March 2026.