As an employer interested in apprenticeship training for your teams, you may have heard that there are apprenticeship incentive payments which you could be eligible for.
But what exactly are they, who is eligible and what do you need to do to claim them? As a leading apprenticeship provider, we’re here to guide you. In this blog, we’ll break down everything you need to know about incentive payments and whether you can claim this financial support.
So what is an apprenticeship incentive payment?
Put simply, an apprenticeship incentive payment is a government-funded reward provided to employers. It’s designed to encourage and financially support employers who utilise apprenticeship training with younger members of their team.
The current standard incentive payment is £1,000 per eligible apprentice.
Who is eligible?
Eligibility is determined by the age of the apprentice when they start their apprenticeship programme. It is not affected by the size of your business and whether or not you pay the apprenticeship levy.
To qualify, your apprentice must meet one of the following criteria:
- Aged 16 to 18 on the first day of their programme
- Aged 19 to 24 and they have an Education, Health and Care plan or they are a care leaver (meaning they have been in the care of their local authority).
How do apprenticeship incentive payments work?
If granted, this £1,000 is paid in two separate instalments:
- £500 after the apprentice completes 90 days of their apprenticeship programme
- £500 after the apprentice completes one year of the programme.
You’ll be pleased to know that there is no separate application that you need to make. The payment is triggered automatically through your training provider, who must pay you within 30 days of receiving the payment from the government.
What can apprenticeship incentive payments be spent on?
The incentive payment can be spent on any costs that relate to your apprentice’s employment. Some of the most common ways that the incentive is spent include:
- Wage costs, helping to offset the apprentice’s salary
- Essential equipment, such as tools and uniforms
- Travel expenses, to help the apprentice get to work or travel between sites
- Training materials, such as digital subscriptions.
Incentive payments for foundation apprenticeships
Foundation apprenticeships can be eligible for incentive payments of up to £2,000 from the government. Your apprentice must be:
- Aged 16 to 21 on the first day of their programme
- Aged 22 to 24 and they have an Education, Health and Care plan, they are a care leaver, or they are a prison leaver.
Other funding and incentives to be aware of as an employer
As well as the apprenticeship incentive payment, there are other types of financial support packages that the government provides to support apprenticeship training. These include:
Government funding for training costs – If you are a non-levy paying employer, the government will cover 100% of the training and assessment costs up to the funding band maximum for apprenticeships aged 16 to 21. Apprenticeship training costs are 95% funded for apprentices aged 22 and over.
In the November budget, it was announced that the 100% funding for non-levy payers will be extended up to apprentices aged 24. This change will come into effect in August 2026. See our budget update for more information.
National insurance contribution relief – You do not have to pay employer class 1 national insurance contributions for an apprentice who is under the age of 25. For apprentices on a typical salary, this saving can amount to thousands of pounds per year and provide a substantial saving in your employee costs.
Levy transfers for SMEs – If your business is an SME and a non-levy payer, employing an apprentice over 21 (or over 24 in the new funding rules), you can potentially access an apprenticeship levy transfer that would cover your 5% contribution. Large levy-paying businesses can transfer up to 50% of their unspent levy funds to other employers, and if you receive the transfer, it means that your organisation won’t have to contribute anything at all to the apprenticeship training costs.
Let Damar support you with a new apprentice hire
Hopefully, this blog has taught you more about apprenticeship incentive payments and the eligibility criteria. With the funding options, NI exemptions and incentive payments on offer, apprenticeships represent a cost-effective solution for organisations of any size.
By working with us here at Damar Training, you can ensure you’re meeting all the necessary requirements needed to access this incentive. With 45 years of experience, we’ve helped many of the country’s leading employers to train impactful apprentices.