How to hire an apprentice

Research carried out by the government in 2021 showed that:  

• 85% of employers said apprenticeships helped them develop skills relevant to their organisation  
• 78% of employers said apprenticeships helped them improve productivity  
• 67% of employers said apprenticeships brought new ideas to their business  

Bringing an apprentice onboard means you are able to train them in accordance with your business’s needs. Apprentices are likely to be motivated and enthusiastic - and learning over an extended period can increase their long-term commitment to the business.  

One of the biggest fiscal benefits of hiring apprentices is the government funding businesses can potentially receive.

The amount of funding a business is entitled to depends on its size and whether it pays an apprenticeship levy or not.  

If your pay bill is more than £3m per year, you must pay the apprenticeship levy. This means you’ll need to make a mandatory contribution towards your apprenticeship service account each month. The amount will be 0.5% of your annual wage costs.  

The funds that accumulate within your apprenticeship service account can be used to train apprentices within your business. The government will also apply a 10% top-up of the money in your account. 

If you don’t have enough in your Apprenticeship service account, you will only be required to pay 5% of the outstanding balance, the government will pay the other 95% (to the funding maximum for each individual apprentice).  

If you don’t use the money in your account within 24 months, it will automatically go to the government.  

Levy-paying employers can also ‘gift’ 25% of their accumulated levy funding to smaller, non-levy businesses, transferring the funds to help them train apprentices in their organisation.  

For businesses with a wage bill less than £3m per year, you will not pay the apprenticeship levy. Instead, you will be included in the co-investment funding model, meaning you can receive funding towards training apprentices within your business.  

If your business has fewer than 50 employees. The Education and Skills Funding Agency (ESFA) will fund 100% of the costs of training apprentices between the ages of 16 to 18, or ages 19 to 24 with an education, health and care plan under the local authority.   

For apprentices aged 19 and up, businesses will receive 95% of the funding from the ESFA and must contribute the remaining 5% themselves.  

For non-levy paying businesses with more than 50 employees, 95% of the funding will be provided for any apprentice above the age of 16, the remaining 5% must be covered by the business.  

As a smaller employer not paying the apprenticeship levy, you reserve funds for apprenticeship training in the ‘finance’ section of your apprenticeship service account and can do this up to six months before the apprentice starts.

Employers will receive a cash incentive of £1,000 for hiring an apprentice between the ages of 16-18 or under 25 with an education, health and care plan in place. 

When you create an apprenticeship opportunity, the government will advertise it on their ‘find an apprenticeship’ page.   

You can also attend open days, arrange visits to schools, universities and colleges, use social media to advertise available positions or take part in career events.  

If you’re based in Scotland and looking to take on an apprentice you can go to Apprenticeships.Scot for information on funding, training and hiring.  

For information on hiring an apprentice in Wales go to Welsh Government Apprenticeships. 

If you’re in Northern Ireland, visit NI Direct Apprenticeships.