How do I know if I pay the levy or if I am a non-levy employer?

If you are an employer with a wage bill of £3 million or more per annum, you will pay the levy from 6th April 2017.

You will need to be aware of the following:

  • The levy applies to all employers regardless of sector or number of employees
  • The levy will be 0.5% of your wage bill paid monthly via PAYE
  • A £15,000 allowance will be available for each employer to offset against their levy payment
  • Example: £10m wage bill x 0.5% = £50,000 less £15,000 allowance = £35,000

  • Single employers with multiple PAYE schemes will only have one allowance
  • You will need to register for a Digital Apprenticeship System account (DAS) to manage your levy spend
  • Funds will be available from May 2017
  • Funds expire after 24 months of entering your DAS
  • Employers in England who pay the levy will be able to get out more than they pay in, through a 10% top up to their digital account by the government
  • Funds will be paid directly from your levy account to your chosen provider on a monthly basis
  • Funding to support development of maths and English skills as well as additional support needs (where applicable) will be provided by the government and will not be charged against the levy
  • Funds can be transferred to other employers
  • To estimate the funding available to you as an employer you can access the government’s Digital Apprenticeship System calculator


If you are an employer with an annual wage bill less than 3 million a year, you are classed as a non-levy employer.

If you are an employer who will not have to pay the levy from 6th April 2017, you will need to be aware of the following:

  • The new funding system came into effect from 1 May 2017
  • Non-levy employers will pay a 10% contribution towards the training directly to the provider
  • Every apprenticeship (framework or new standard) is allocated a maximum value to which the government will contribute 90%
  • The cost of the apprenticeship training will be negotiated between the employer and their chosen training provider
  • Employers with less than 50 employees will not have to contribute towards the costs of a 16-18-year-old apprentice
  • For all other apprentices the government will pay 90% with a 10% employer contribution (up to a maximum value)
  • For new apprentices who are aged 16-18 there may be a £1,000 employer incentive available
What is the difference between an Apprenticeship framework and an Apprenticeship standard?
The New Apprenticeship Standards
All existing apprenticeship frameworks will be replaced with standards by 2019/20
  • Standards have been developed by employers based on a job role and cover the core skills, behaviours and knowledge an individual is required to develop to carry out their role at work
  • Some standards will not include accredited qualifications
  • All standards will have an independent end–assessment
  • Successful apprentices will be awarded a grade for their achievement and can progress to higher study, including university-level qualifications
  • Not all standards have been developed yet and the apprenticeship framework has to be used

The Apprenticeship Frameworks

All apprenticeship frameworks are moving across to apprenticeship standards and soon will be abolished.

  • Frameworks contain accredited qualifications
  • They do not have an independent end -assessment
  • Frameworks have optional units that have to be picked to make up the qualification

See the latest apprenticeship standards available and those still in development

As an employer how much will I have to pay for a qualification?

Apprenticeship frameworks and standards have been put into funding bands by the government, Training providers and employers will negotiate the training cost.

Apprenticeship standards funding bands

Apprenticeship framework & standard funding bands

What service will my organisation receive from Mercia College?
Consultancy service
Mercia College Limited will provide a free consultancy service to explore a range of workforce development solutions. This will include apprenticeships in conjunction with a workforce development plan tailored to your business needs.

Workforce development planning

As part of the consultancy service, our highly trained and experienced Employer Engagement Team will identify your current and future workforce development needs. They will work with you to create a proposal that addresses the upskilling of your existing employees and help you assess current and future skills gaps, the delivery of apprenticeship services in your organisation and any future workforce development needs, including any mandatory training your business requires. The proposal will be presented to you as a free service to assist you in your business planning.

Delivering the plan

Your learning and skills partner Mercia College Limited will form a learning and skills partnership in conjunction with your business to bring your training plan to life. Our services include:

  • A dedicated account manager
  • Apprenticeship recruitment and selection
  • Support to manage your levy
  • Bespoke apprenticeship delivery proposals
  • Commercial training
  • Higher level skills and management development
  • Apprenticeship training for existing staff
  • Mandatory training and short courses, including e-learning
As a levy employer can I transfer funds to another employer?

From April 2018, levy-paying employers will be able to transfer apprenticeship service funds to one other employer to pay for their apprenticeship training and assessment.

The number of employers they will be able to transfer funds to will increase over time and after user feedback from the first phase.

By making a transfer you can support an employer who may not otherwise have been able to take on an apprentice.

As an example, they could increase their business productivity by working in partnership with a smaller employer in their supply chain, increasing skills in their sector or region.

Initially, training providers transferring funds to another employer won’t be able to provide the training for that transfer.

However, as transferring funds is a new aspect of apprenticeship funding policy, we will review how the system is operating in practice and continue to consider changes to enable employers to make the best use of transfers.

What next?

Employers will be able see their transfer balance in their apprenticeship service account at the end of April.

Please see the below links that provide online materials to support employers understand transfers:-

Watch this 3-minute video about transfers

Read the GOV.UK page on transferring apprenticeship service funds

Read this updated transfers blog that now includes key dates