Start with the part that is never in doubt: the apprentice does not pay for their training. There are no tuition fees and no student loan for an apprenticeship.
Two separate costs sit behind an apprenticeship, and it helps to keep them apart.
1. The wage
Paid entirely by the employer. Apprentices are employees and must be paid at least the apprentice rate of the National Minimum Wage, which applies to apprentices under 19 and to those in the first year of their apprenticeship; after that the normal age-related minimum wage applies. Many employers pay well above the minimum. Apprentices are also paid for the time they spend on off-the-job training.
2. The training
Paid for through the apprenticeship funding system. How much the employer contributes depends on two things: whether they pay the apprenticeship levy, and how old the apprentice is.
Each standard has a funding band which caps how much of the training cost can be met from apprenticeship funding. If an employer negotiates a price above the band, they pay the difference themselves.
| Employer | Apprentice age | Government contribution | Employer co-investment |
|---|---|---|---|
| Non-levy employer | 16 to 24 | 100% | 0% |
| Non-levy employer | 25 and over | 95% | 5% |
| Levy payer with insufficient levy funds | 16 to 24 | 100% | 0% |
| Levy payer with insufficient levy funds | 25 and over | 75% | 25% |
These rates apply up to the funding-band maximum for the standard.
Two points that are easy to miss in that table. A levy-paying employer normally pays for training from the funds in its apprenticeship service account; co-investment only comes into play when those funds are insufficient. And for apprentices aged 16 to 24, government currently meets the full cost up to the funding band maximum whether or not the employer pays the levy.
The hiring payment from October 2026
From 1 October 2026, non-levy-paying employers will be able to claim a £2,000 hiring payment for recruiting a new apprentice aged 16 to 24. Paid in two instalments, the first after the apprentice has completed 90 days. It applies to standard and foundation apprenticeships, for apprentices who started their job within the previous three months.
Note the date. At the time of writing this has not yet started. Employers planning recruitment now should check the current position before relying on it.
How much of the system runs on levy funds?
In the current period, 67.3% of apprenticeship starts in England were supported by apprenticeship service account levy funds, and 32.7% were funded another way.
Two things employers often miss
- Off-the-job training is paid working time. It is not something an apprentice is expected to do in the evening. This is a real cost and should be planned for.
- Funding rules change, and 2026 was a big year for it. The 10% top-up ended, fund expiry shortened, and Level 7 funding was restricted to younger apprentices from 1 January 2026. Always check the current guidance rather than a summary – including this one.