Right, let’s cut straight to the chase, how much will it cost you to hire an apprentice
Well, that depends on a few factors:
- Do you pay the apprenticeship levy?
- Are there any recruitment expenses if you’re bringing in a new apprentice?
- How much are you going to pay your apprentice?
- National Insurance payments
- Is your apprentice eligible for some incentive payments or other government goodies?
Let’s start with the first point – levy payers
The Apprenticeship Levy, it’s basically a tax that employers have to pay to support apprenticeship training along with other things. It rule came into play at the beginning of 2017/18, and if you’re an employer paying out more than £3 million in salaries each year, you’ve got to pay 0.5% of your total pay bill into a levy pot.
So, If you’re part of the wonderful world of the apprenticeship levy you’ve probably got the golden ticket to cover those apprenticeship training costs already. The great news is the UK government has also gone above and beyond to make hiring apprentices using your levy funds a breeze. They’ve even cooked up some fantastic schemes and incentives to sweeten the deal.
What if you’re not a levy payer?
Not to worry! There are more funding options out there.
The key word here is, co-investment. If your payroll is smaller than the apprenticeship levy threshold of £3 million (or you’ve used up your levy stash), you’re in for some government generosity. The UK government can cover 95% of the apprenticeship costs, with your funding capped at the program’s funding band (we’ll write an article on this later). If your training costs stretch beyond those bounds, it’s on you to foot the bill. However, this doesn’t apply to a huge proportion of smaller businesses anyway. Ultimately, this means that you’ll have to pay a 5% contribution toward the apprenticeship course cost. For example, a £10,000 course will require you to pay £500 and the government pays the rest. Good huh?
But wait, it may get even better!
If you have fewer than 50 employees you will be eligible for 100% funding for individuals aged 16-18. That means you could get £11,000s worth of training and support for your learner for free!
How much does it cost for that top-notch apprenticeship training?
If you’re in the apprenticeship levy club, your training funds are like a pre-paid gift card. These funds can be used to cover your apprenticeship training expenses, though keep in mind it doesn’t extend to additional qualifications. But it does include the End-Point Assessment.
Who pays my apprentice?
That’s on you, just like any of your employees. This also includes the time they spend at the workplace, college, or with your training provider.
So, what’s their paycheck supposed to look like?
Your apprentice should get at least the minimum apprentice wage, which currently sits at £6.40 for the under-19 age group and 19+ s in their first year of an apprenticeship agreement. When they hit the second year, they should be making the minimum wage for their age. You can find out more on the ACAS website. They’re your employees, so they also get things like holiday pay, sick leave, and other perks. Depending on their age and income, they might even be eligible for pension auto-enrollment.
However, most employers tend to be pretty generous, paying more than the minimum wage to recognise the value their apprentice brings to the table. These apprentices are your secret ingredient for building resilient teams that are ready for the future.
The national minimum wage for apprentices was changed as of November 2023 to the following:
- 16-17 year-olds: £6.40;
- 18-20 year-olds: £8.60;
- 21 and over: £11.44.
What about National Insurance?
The good news is that you likely won’t need to pay national insurance contributions for your apprentices. However, there are some caveats to it. For example, if your apprentice is over the age of 25 and earns more than £967 per week then you’d need to do so. However, anything below that, and it’s unlikely you’ll need to do anything. You can find out about apprentice national insurance here.
Are there any incentives?
Do you feel like you could use some extra padding in the ol’ wallet? Well, you’re in luck! There are a few government grants to help cover the costs of taking on an apprentice. They’re here to make it even easier for your business.
For instance, you could get a £1000 incentive if you hire an apprentice aged 16-18 or under 25 with an education, health, and care plan or who’s been in local authority care. This bonus could help with uniform, travel, and wage expenses and is sent to your Training Provider 90 days after your apprentice starts.
In summary
When it comes to measuring success, apprenticeships are like planting seeds for your business, eventually, they’ll grow into big ol’ trees, metaphorically of course. Whether you’re tapping into the levy or government co-investment, you’ll see fantastic returns in the form of higher retention, skill upgrades, and financial gains. An apprentice can work wonders for your business.
If the cost of hiring a marketing apprentice is causing you some confusion, don’t worry! We’re here to lend a hand. We’re experts in driving and crafting marketing apprenticeship programmes in marketing. We’ll help you maximise your levy contributions or take you through co-investment and even take care of recruitment – and yes, that service is free! Get in touch and one of our Client Success Managers will discuss the various apprenticeship opportunities open to you as an employer.
