Employers of any size can use the Growth and Skills Levy to fund apprenticeship training within their business
Funding can be used flexibly to pay for full apprenticeships, shorter apprenticeship units and foundation apprenticeships
A range of financial incentives are available to all employers to make apprenticeship training within your business affordable and cost effective
The Growth and Skills Levy funds apprenticeship training to help businesses across the country develop the workforce skills they need. Formerly known as the Apprenticeship Levy, it is a UK tax on employers with an annual pay bill over £3 million, charged at 0.5%.
The Growth and Skills Levy gives employers greater flexibility in how apprenticeship funding is used, including access to new types of training.
What types of training can I fund?
You can use the Growth and Skills Levy to pay for:
Full apprenticeships: funding is available for all Level 2 to Level 6 apprenticeships, with funding available for Level 7 apprenticeships where the learner is aged 16-21 (or under 25 where eligible*).
Please note that funding eligibility for Level 7 apprenticeships has changed as of January 2026
Apprenticeship units: short training units lasting between approximately one and 16 weeks, available to existing employees aged 19 and over
Foundation apprenticeships: entry-level apprenticeships designed for learners aged 16-21 (or under 25 where eligible*) and at the start of their career
How much funding do I receive?
If your business pays into the levy
Levy payers can access 100% government funding for new apprentices and upskilling existing staff with apprenticeship training (subject to the criteria stated above).
If you’re a UK-based employer with a pay bill of over £3 million, your business automatically pays into the levy through a government tax scheme. These funds are set aside specifically for your business to fund apprenticeship training.
Changes to levy funds from 1 August 2026
Levy funds will expire quicker
New levy funds received will expire after 12 months instead of 24 months. Funds received before 1 August 2026 will continue to expire after 24 months and will be used first.
If you use all your levy funds
If your levy funds run out, you pay part of the remaining training costs. This is known as co-investment and applies to funding for full apprenticeships, apprenticeship units and foundation apprenticeships.
The co-investment rate for levy payers will increase from 1 August 2026. Here’s what you need to know:
- Up to and including 31 July 2026: you pay a maximum of 5% of funding costs for each apprenticeship start. The government pays the remaining 95%
- From 1 August 2026: you pay a maximum of 25% of funding costs for each apprenticeship start. The government pays the remaining 75%
10% government top-up will end
The levy fund for your business will no longer receive a 10% top-up from the government.
If your business does not pay the levy
You can still access at least 95% government funding through the Growth and Skills Levy. You pay the remaining 5% directly to your training provider.
You can receive 100% government funding:
- From 1 August 2026: for any apprentice aged under 25
Transferring levy funds between businesses
Any employer that pays into the levy can choose to transfer a maximum of 50% of their funding to a:
- Non-levying paying employer, or
- A levy-paying employer that has used all their levy funds
This can be used to cover all training costs for full apprenticeships, apprenticeship units and foundation apprenticeships.
Additional incentives for hiring a young person
All employers can:
- Receive an additional £1,000 for hiring an apprentice aged 16-18 (or under 25 where eligible*)
- Receive up to an additional £2,000 for hiring an apprentice onto a foundation apprenticeship (aged 16-21, or under 25 where eligible*)
- Receive a £3,000 youth jobs grant when hiring a young person aged 18-24, either in an apprenticeship or non-apprenticeship role, who has been unemployed and on Universal Credit for at least six months
- From 1 August 2026, benefit from zero secondary Class 1 National Insurance contributions for apprentices under 25. This exemption ends on the apprentice’s 25th birthday, regardless of the duration remaining on their apprenticeship
Non-levy paying employers can:
From 1 October 2026, receive an additional £2,000 cash payment for apprentices aged 16-24, either hired onto an apprenticeship or starting an apprenticeship on or after 1 October 2026