Which UK employers pay the Apprenticeship Levy?

Any UK employer - private sector, public sector, or charity - with an annual pay bill above £3,000,000 pays the levy. The "pay bill" is the total of all earnings on which employers pay Class 1 secondary National Insurance (broadly, gross salary plus most taxable benefits). The £15,000 annual allowance offsets the first £15,000 of levy due, so the 0.5% rate only bites once the pay bill exceeds the £3m effective threshold.

How is the £15,000 allowance shared across a connected group?

Companies under common control - a parent plus its subsidiaries - count as a connected group for Apprenticeship Levy purposes and share a single £15,000 allowance between them. The group decides how to split the allowance at the start of the tax year and reports each member's share via PAYE. The split is fixed for the year (you cannot reallocate mid-year), so the choice matters: giving the largest member 100% of the allowance leaves the smaller members paying levy from £1 of pay bill.

Do employers in Scotland, Wales, and Northern Ireland pay the levy?

Yes - the Apprenticeship Levy is a UK-wide tax collected by HMRC, so a Scottish, Welsh, or Northern Irish employer above the £3m threshold pays exactly the same 0.5% as an English employer. The difference is what happens to the funds. English employers see their levy credited to a digital Apprenticeship Service account with a 10% government top-up. Scotland, Wales, and NI fund their own devolved schemes (Modern Apprenticeships, Apprenticeships Wales, ApprenticeshipsNI) - the levy is paid to HMRC but the funding routing is via the devolved administrations, with no top-up.

What happens to unused funds in the Apprenticeship Service account?

Funds credited to an English employer's Apprenticeship Service account expire 24 months after they enter the account, on a rolling first-in-first-out basis. Each month's top-up sits in the account for 24 months; if not spent on apprenticeship training, the funds are reclaimed by the Treasury and redirected to fund apprenticeships at non-levy-paying employers. Levy-payers should therefore plan a training pipeline that draws down the oldest funds first to avoid forfeiture.

Can I transfer unused Apprenticeship Levy funds to another employer?

English levy-payers can transfer up to 25% of their annual funding allocation to other employers - typically smaller employers in their supply chain or sector. The transfer is managed through the Apprenticeship Service account and is restricted to funding apprenticeship training and assessment for the receiving employer (not wages or other costs). Transfers are a one-way commitment: once allocated, the receiving employer draws down the funds and the transferring employer cannot reclaim them.

How and when is the levy paid?

The Apprenticeship Levy is paid monthly via PAYE Real Time Information (RTI) alongside Income Tax and Class 1 National Insurance. Each month an employer reports 1/12 of the gross levy and 1/12 of the allowance, paying HMRC the net amount by the 22nd of the following month (or 19th if paying by post). The Apprenticeship Service credits the matching net amount (plus the 10% English top-up) to the digital account roughly two working days after the PAYE submission clears.

£4,000,000 Annual Pay Bill: UK Apprenticeship Levy 2026/27

A UK employer with a £4,000,000 annual pay bill faces a gross Apprenticeship Levy of £20,000 at the 0.5% rate. After applying the £15,000 annual employer allowance, the net levy due is £5,000 (£417 per month via PAYE). An English employer gets a 10% government top-up taking total Apprenticeship Service training funds to £5,500. Verified against gov.uk: pay apprenticeship levy.

Net levy (England, full allowance)

£5,000

Monthly via PAYE £417

Apprenticeship Service funding

£5,500

Net levy + 10% government top-up

Scotland / Wales / NI (no top-up)

£5,000

Funding via devolved scheme

How the levy is calculated on £4,000,000

Take the annual pay bill (total Class 1 NICable earnings): £4,000,000.
Apply the 0.5% Apprenticeship Levy rate to get the gross levy: £20,000.
Subtract the £15,000 annual employer allowance (full share for a single employer): £5,000 net levy due (floored at zero).
Divide by 12 to get the monthly PAYE payment: £417 per month reported alongside Income Tax and NI on the monthly RTI return.
English employers see the net levy credited to their digital Apprenticeship Service account with a 10% government top-up, giving £5,500 of training funds (expires 24 months after entering the account). Up to 25% can be transferred to other employers.

All 16 scenarios at £4,000,000

Net levy, monthly PAYE payment, and Apprenticeship Service funding available for each region and allowance split. Adjust the values interactively on the main calculator.

Region	Allowance share	Gross levy	Net levy	Monthly	Funding
England	Full allowance (£15,000)	£20,000	£5,000	£417	£5,500
England	Half (£7,500)	£20,000	£12,500	£1,042	£13,750
England	Third (£4,950)	£20,000	£15,050	£1,254	£16,555
England	Quarter (£3,750)	£20,000	£16,250	£1,354	£17,875
Scotland	Full allowance (£15,000)	£20,000	£5,000	£417	£5,000
Scotland	Half (£7,500)	£20,000	£12,500	£1,042	£12,500
Scotland	Third (£4,950)	£20,000	£15,050	£1,254	£15,050
Scotland	Quarter (£3,750)	£20,000	£16,250	£1,354	£16,250
Wales	Full allowance (£15,000)	£20,000	£5,000	£417	£5,000
Wales	Half (£7,500)	£20,000	£12,500	£1,042	£12,500
Wales	Third (£4,950)	£20,000	£15,050	£1,254	£15,050
Wales	Quarter (£3,750)	£20,000	£16,250	£1,354	£16,250
Northern Ireland	Full allowance (£15,000)	£20,000	£5,000	£417	£5,000
Northern Ireland	Half (£7,500)	£20,000	£12,500	£1,042	£12,500
Northern Ireland	Third (£4,950)	£20,000	£15,050	£1,254	£15,050
Northern Ireland	Quarter (£3,750)	£20,000	£16,250	£1,354	£16,250

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Related calculators

Apprenticeship Levy calculator - change pay bill, region, allowance split, and tax year.
Corporation Tax calculator - the net levy is deductible for Corporation Tax; pair the levy figure with your taxable profit.
Capital Allowances calculator - first-year deductions for plant and machinery capex.

Frequently asked questions

Which UK employers pay the Apprenticeship Levy?: Any UK employer - private sector, public sector, or charity - with an annual pay bill above £3,000,000 pays the levy. The "pay bill" is the total of all earnings on which employers pay Class 1 secondary National Insurance (broadly, gross salary plus most taxable benefits). The £15,000 annual allowance offsets the first £15,000 of levy due, so the 0.5% rate only bites once the pay bill exceeds the £3m effective threshold.
How is the £15,000 allowance shared across a connected group?: Companies under common control - a parent plus its subsidiaries - count as a connected group for Apprenticeship Levy purposes and share a single £15,000 allowance between them. The group decides how to split the allowance at the start of the tax year and reports each member's share via PAYE. The split is fixed for the year (you cannot reallocate mid-year), so the choice matters: giving the largest member 100% of the allowance leaves the smaller members paying levy from £1 of pay bill.
Do employers in Scotland, Wales, and Northern Ireland pay the levy?: Yes - the Apprenticeship Levy is a UK-wide tax collected by HMRC, so a Scottish, Welsh, or Northern Irish employer above the £3m threshold pays exactly the same 0.5% as an English employer. The difference is what happens to the funds. English employers see their levy credited to a digital Apprenticeship Service account with a 10% government top-up. Scotland, Wales, and NI fund their own devolved schemes (Modern Apprenticeships, Apprenticeships Wales, ApprenticeshipsNI) - the levy is paid to HMRC but the funding routing is via the devolved administrations, with no top-up.
What happens to unused funds in the Apprenticeship Service account?: Funds credited to an English employer's Apprenticeship Service account expire 24 months after they enter the account, on a rolling first-in-first-out basis. Each month's top-up sits in the account for 24 months; if not spent on apprenticeship training, the funds are reclaimed by the Treasury and redirected to fund apprenticeships at non-levy-paying employers. Levy-payers should therefore plan a training pipeline that draws down the oldest funds first to avoid forfeiture.
Can I transfer unused Apprenticeship Levy funds to another employer?: English levy-payers can transfer up to 25% of their annual funding allocation to other employers - typically smaller employers in their supply chain or sector. The transfer is managed through the Apprenticeship Service account and is restricted to funding apprenticeship training and assessment for the receiving employer (not wages or other costs). Transfers are a one-way commitment: once allocated, the receiving employer draws down the funds and the transferring employer cannot reclaim them.
How and when is the levy paid?: The Apprenticeship Levy is paid monthly via PAYE Real Time Information (RTI) alongside Income Tax and Class 1 National Insurance. Each month an employer reports 1/12 of the gross levy and 1/12 of the allowance, paying HMRC the net amount by the 22nd of the following month (or 19th if paying by post). The Apprenticeship Service credits the matching net amount (plus the 10% English top-up) to the digital account roughly two working days after the PAYE submission clears.