Many employers are concerned about the recent Government announcement that employer national insurance contributions will rise from 13.8% on salaries over £9,100, to 15% on salaries above £5,000 from April 2025.
But what is less known is that in most cases, there is no employer NI at all for apprentices under 25. The saving can amount to several thousand pounds per apprentice.
The NI exemption applies when using apprenticeships to train up new recruits and existing staff. The apprentice just needs to be under 25 and paid less than £967 per week. And, if you recruit an apprentice aged 16-18, you are also eligible to receive a £1,000 grant.
If you employ or recruit someone under 25 on a £20,000 salary and put them on an apprenticeship, you will save £2,250 in annual NI contributions (the saving ends on their 25th birthday) . For an apprentice on £25,000, the saving is £3,000 a year.
Remember, this applies to existing colleagues too – so if you have a colleague who you think could benefit from the structured development programme within an apprenticeship, please get in touch.
Finally, SMEs (i.e. those who don’t pay the Apprenticeship Levy) can also receive 100% funding for apprenticeship training costs for apprentices aged up to 21 on enrolment and 95% funding for apprentices aged 22 and over.
For a recruited apprentice aged 16-18 on £18,000, a non-Levy paying employer would therefore be eligible for:
| Salary | NI saving (per year) | Training costs | Additional grant |
| £18,000 | £1,950 | £0 | £1k |
If you would like to find out more about how you can use apprenticeships to support and grow your business, get in touch with us here.