In today’s competitive business landscape, organisations are constantly seeking ways to develop talent while managing costs effectively. Apprenticeships have emerged as a powerful solution, offering a structured pathway to build skills within a workforce. However, a common question arises: Do employers get paid for having an apprentice?
Here at Damar, we’re committed to making apprenticeships accessible for employers. And in this blog, we’ll directly address your questions about whether employers get paid for having an apprentice, providing a clear breakdown of the funding processes and how your organisation can benefit.
Do employers get paid for having an apprentice?
For employers taking on a new apprentice or utilising apprenticeship training for existing staff, the short answer is no, employers don’t receive regular payments. However, the government offers various financial incentives and support mechanisms that can make apprenticeships highly cost-effective for businesses of all sizes.
What funding is available for apprenticeships?
Understanding what financial support is available for apprenticeships can seem complex, but the government does provide substantial support to help employers invest in their workforce.
Here is a breakdown of the key government funding mechanisms:
- The apprenticeship levy
If you are a large employer with an annual pay bill exceeding £3 million, then you will pay the apprenticeship levy, contributing 0.5% of your annual payroll. The government adds a 10% top-up to the funds in the digital account, so for every £100 an employer pays in, they have £110 to spend. Unspent levy funds will expire after 24 months, encouraging employers to regularly invest in apprenticeships.
Find out more about what the apprenticeship levy is here.
- Co-investment (for non-levy paying employers)
If you have an annual pay bill under £3 million, then you won’t pay the apprenticeship levy. For apprentices aged up to 21, the government funds 100% of the apprenticeship training costs (excluding any non-eligible accreditation costs). For apprentices aged 22 and over, the government covers 95% of the training costs, with the employer contributing just 5%.
Are there apprenticeship grants available?
The government also offers apprenticeship grants to employers who hire an apprentice. The grant offers a payment of £1,000 for every new apprentice who is 16 to 18 years old (or is 19 to 24 and has been in care or has an education, health and care plan).
These grants have been put in place to incentivise employers to offer opportunities to young people and those who may face barriers to employment.
Another substantial benefit for you as an employer comes in the form of National Insurance (NI) contribution exemptions. Many employers are unaware that they are exempt from paying employer NI contributions for apprentices under 25 years of age. This exemption applies to both newly recruited apprentices and the upskilling of existing staff members through apprenticeship programmes.
How do employers receive apprenticeship funding?
Apprenticeship funding is sent directly to the chosen training provider, not to the employer. This is all set up and managed through the employer’s apprenticeship service account.
If an employer is eligible for the £1,000 grant, they will receive this in two instalments through their apprenticeship provider.
Does the government pay the apprentice’s wage?
Your apprentice’s wages are not covered by the apprenticeship levy or government funding.
The government sets a specific minimum wage for apprentices, which is typically lower than the standard minimum wage for other employees. As of April 2025, the apprentice minimum wage stands at £7.55 per hour for apprentices under 19 years of age or those in the first year of their apprenticeship. After completing the first year, apprentices aged 19 or over are entitled to the national minimum wage for their age group.
However, it’s worth noting that many employers choose to pay above the apprentice minimum wage to attract higher calibre candidates and improve retention rates.
While the financial incentives are significant, the true value of apprenticeships extends far beyond immediate cost savings. Employers who implement effective apprenticeship programmes report numerous business benefits that contribute to long-term financial performance.
Tracey Wilson, Operations Director at Blue Cube Travel, said: “Offering apprenticeships demonstrates our commitment to career development and employee growth. Apprenticeships contribute to a dynamic and inclusive workplace culture. The integration of enthusiastic, motivated apprentices energises the team, promoting a collaborative and supportive environment that benefits all employees.”
Read more of our employer testimonials here.
Choose Damar as your leading apprenticeship provider
Hopefully, this blog has answered your questions about wherther employers get paid for having an apprentice.
Here at Damar, we’re truly passionate about the delivery of apprenticeships, and we’ve got over 40 years of experience under our belt. We’d love to talk to you about the funding that is available and the benefits that apprenticeship training can bring to your organisation.