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Should you be paying the Apprenticeship Levy?

Apprenticeship Levy is an amount paid at a rate of 0.5% of an employer’s annual pay bill. As an employer, you have to pay Apprenticeship Levy each month if you:

  • have an annual pay bill of more than £3 million

  • are connected to any companies or charities for Employment Allowance purposes and have a combined annual pay bill of more than £3 million

All sectors must pay the levy if they have an annual pay bill of over £3 million and you must report and pay Apprenticeship Levy monthly through your Employee Payment Summary. Your annual pay bill Your annual pay bill is all payments to employees that are subject to employer Class 1 secondary National Insurance contributions such as wages, bonuses and commissions. Your pay bill must include payments to:

  • all employees earning below the Lower Earnings limit and the Secondary Threshold

  • employees under the age of 21

  • apprentices under the age of 25

Your pay bill must not include earnings:

  • of employees under the age of 16

  • of employees who are not subject to UK National Insurance contributions legislation

  • on which Class 1A National Insurance contributions are payable, such as benefits in kind

Using your Apprenticeship Levy Allowance


The allowance reduces the amount of Apprenticeship Levy you have to pay by £15,000 across the year. You cannot carry over any unused allowance into the next tax year. At LAT Apprenticeships we can help and advise you on accessing your levy along with other matters relating to apprenticeships, including how to claim incentive payments. Please call on 07729 115972 or email info@latapprenticeships.org.uk Further information regarding this, please visit Apprenticeship Levy.

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