SME & non-Levy Employers apprenticeship funding
SME & Non-Levy Employers: Apprenticeships Explained
Apprenticeships are a powerful tool for small and medium-sized enterprises (SMEs) to build talent, boost productivity, and grow their business using government funding. With up to 100% of training costs covered for eligible apprentices, SMEs can upskill staff, fill critical roles, and stay competitive—especially as rivals are already leveraging these schemes to strengthen their workforce.
This guide outlines how apprenticeships work for non-levy employers, what funding is available, and how to get started.
What Is a Non-Levy Employer?
Non-levy employers are businesses that do not contribute to the Apprenticeship Levy, a tax charged at 0.5% of payroll for companies with wage bills over £3 million. As a non-levy employer, you’re eligible for co-investment funding or even full government funding in certain cases.
SME and non-levy paying employers
SME Apprenticeship Funding
From August 2025, SMEs can benefit from enhanced apprenticeship funding support. If you employ fewer than 50 staff, and your apprentice is aged 16–21, the government will fund 100% of the training and assessment costs.
For other apprentices, SMEs pay just 5% of the total training costs, with the government covering the remaining 95%. This co-investment model makes apprenticeships highly affordable, especially when paired with additional incentives such as levy transfers and progression bonuses.
National Insurance Relief
Employers hiring apprentices under the age of 25 may also benefit from National Insurance relief. If the apprentice is on an approved programme and earns below the upper threshold, you won’t need to pay Class 1 employer contributions—helping reduce overall employment costs.
Build a Recruitment Plan Around Apprenticeships
If you’ve never hired an apprentice before, the best way to begin is with one well-supported hire. Many SMEs start small, then quickly see the value apprentices bring—fresh thinking, loyalty, and practical skills aligned to your business needs.
Over time, we see apprenticeships evolve from a tactical hire into a strategic workforce solution. Employers begin to build structured recruitment plans around apprenticeships, using them to fill skills gaps, support succession planning, and drive long-term growth. In fact, 90% of SMEs surveyed in 2025 said they anticipate apprenticeships becoming a core part of their future recruitment strategy.
We’ll help you design a recruitment plan that fits your business goals—whether you’re hiring one apprentice or building a multi-role pipeline.
No Recruitment Fees for New Hires
We believe in making apprenticeships accessible and cost-effective for SMEs. That’s why we don’t charge any recruitment fees when you hire a new apprentice through us. Whether you’re filling a digital, business, or technical role, our team will help you source, screen, and match candidates at no extra cost. You only pay the training contribution—nothing more.
This means you can focus on finding the right talent without worrying about hidden costs or agency-style fees.
Reserving Apprenticeship Funding
To access funding, you must reserve funds through your Apprenticeship Service account. This ensures that government support is available from the start of the apprenticeship.
You should reserve funds before:
Recruiting a new apprentice
Offering an apprenticeship to an existing employee
If this isn’t possible, you can backdate the reservation by one calendar month from the apprenticeship start date.
Your training provider can reserve funds on your behalf, but you retain control over which provider you use. For more information, please visit our Funding Guidance page.
Levy Transfers
If your reserved funding is paused or unavailable, you can apply for a levy transfer. Large levy-paying employers can pledge up to 50% of their unused levy funds to support SMEs. This can cover 100% of your training costs, up to the funding band maximum.
Employer Responsibilities
As a non-levy employer, you must:
- Pay your apprentice for all working hours and training time
- Contribute 5% of training costs (unless eligible for full funding)
- Support off-the-job training, which must be paid and protected
- Create or manage your Apprenticeship Service account
- Work with a training provider to agree on the training plan
You must also pay your apprentice at least the National Minimum Wage, based on their age and apprenticeship year.
Why SMEs Choose Apprenticeships
Apprenticeships help SMEs:
- Fill skills gaps cost-effectively
- Build a loyal, skilled workforce
- Access government incentives and tax relief
- Contribute to local employment and growth
- Stay competitive in a fast-moving market
- Embed long-term recruitment and growth strategies
With flexible training options, generous funding, and no recruitment fees, apprenticeships are more accessible than ever for small businesses—and they’re already being used by your competitors to gain an edge.
Trusted by leading employers
Ready to Get Started?
Our Employer Partnerships Team is here to help you navigate funding, recruitment, and training options tailored to your business. Whether you’re hiring your first apprentice or expanding your team, we’ll guide you every step of the way.
Contact our Employer Partnerships Team to start your apprenticeship journey today.