How Much Does Hiring And Being An Apprentice Cost?

Two weeks ago, it would have been fair to say I knew very little about apprenticeships.

I had just started my role as the Digital Marketing Manager at the LDN Apprenticeship and quickly realised what little knowledge I had when it came to everything apprentice.

One of my biggest misconceptions, before I began, was the cost of hiring an apprentice. Why would a business hire an apprentice and invest valuable time training one? Could they just spend the money on someone who already knows what they’re doing?

First of all, the cost of training an apprentice for many businesses is free. For the bigger companies, a large percentage of the training is paid for by the government.

Businesses that hire apprentices are funded in slightly different ways. They are split into two categories;

• Levy payers (businesses with a payroll of MORE than £3m a year)

• Non-levy payers (businesses with a payroll of LESS than £3m a year).

Levy payers pay a tax on their payroll. This is stored in a digital account and ring-fenced for spending on their apprenticeship scheme. If they don’t use the money within two years, they lose it and the expense is effectively written off as a tax.

The apprenticeship levy isn’t the easiest thing to understand, as I discovered, so to find out about the levy in more detail, check out the simple breakdown on our website HERE.

Smaller companies (non-levy payers) are exempt from paying into the apprenticeship levy. For them, the cost of training an apprentice is either heavily subsidised or completely free.

Such heavily subsidised training costs mean that in most cases the employer only really needs to consider the cost of the apprentice’s salary when they’re thinking about taking on a young person.

Because apprentices are working at the same time as getting a qualification, starting salaries are lower than you might expect. For example at LDN Apprenticeships, we recommend a starting salary of £300 per week for apprentices on our Business Administration Apprenticeship.

But what about the cost of being an apprentice? 

Gaining an apprenticeship is completely free for young people. Unlike a university course, there is no fee to pay for learning. They are paid to do their job at the same time as receiving training relevant to the role.

So, the deal for young people is that they receive nationally recognised training and at least a year of paid work. Doesn’t that seem a little too good to be true!?

It’s certainly not what I expected and it has completely opened my eyes to the way businesses hire apprentices and to how enthusiastic young people are about gaining the skills and getting the jobs they want in today’s economy.

There are a lot of things in this piece that you may already know. But for many, apprenticeships are uncommon knowledge.

The system benefits everyone and it’s now time to make sure everyone knows about it.