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How Much Does It Really Cost to Hire an Apprentice in the UK?
- Anaïs Hegarty
- Mar 16
- 3 min read
For many employers, one of the first questions about apprenticeships is simple:
“How much does it actually cost?”
The good news is that apprenticeships in England are heavily supported by the government. In many cases, the training costs are mostly – or even fully – funded, making apprenticeships one of the most cost-effective ways to recruit and develop talent.
In this guide, we’ll break down the real costs of hiring an apprentice in 2026, including training costs, wages, and the financial support available to employers.
Apprenticeship Training Costs
The highest cost most employers think about is training and assessment. However, government funding covers most of this.
How much you pay depends on whether your business pays the Apprenticeship Levy.
If your business does NOT pay the levy (most SMEs)
If your organisation has an annual payroll below £3 million, you usually only pay 5% of the training cost.
The government covers the remaining 95%, up to the maximum funding band for the apprenticeship.
Example:
Apprenticeship training cost | Employer pays | Government pays |
£10,000 | £500 | £9,500 |
In some cases, training can be completely free.
For example, the government currently funds 100% of training costs for apprentices aged 16–21, and for some 19–24 year olds with additional support needs.
If your business DOES pay the levy
Employers with a payroll over £3 million per year must pay the apprenticeship levy.
The levy is a 0.5% tax on the employer’s pay bill, which goes into a digital account that can be used to pay for apprenticeship training.
The government also adds a 10% top-up to the funds in that account.
This means:
Training is usually 100% covered by your levy funds
If your levy funds run out, you typically pay 5% of the remaining training cost
Levy Transfers (Another Way to Reduce Costs)
Large employers that do not use all their levy funds can transfer their unused funds to support other businesses.
This means smaller companies can access 100% funded apprenticeship training, even when they would normally pay the 5% contribution.
Apprentice Wages
Employers must pay apprentices for their working hours.
The minimum wage for apprentices depends on their age and year of apprenticeship. However, many employers choose to pay more to attract talent.
Your total wage cost will depend on:
apprentice age
working hours
your company’s pay structure
the industry
Although wages are a real cost, apprentices often deliver value quickly as they gain skills while working in your business.
National Insurance Savings
There is another financial advantage many employers don’t realise.
You do not have to pay employer National Insurance contributions for apprentices who:
are under 25
earn less than £50,270 per year
This exemption can save employers thousands of pounds each year in payroll costs.
Extra Government Incentives
In some situations, employers receive additional financial support.
For example, employers receive £1,000 in additional funding if they hire an apprentice who is:
aged 16–18
aged 19–24 with an Education, Health and Care plan
aged 19–24 who has been in local authority care.
This payment is typically made in two instalments during the first year of the apprenticeship.
What Are the Real Costs for Employers?
For most employers, the true cost of hiring an apprentice comes down to two things:
1. Salary: You must pay the apprentice’s wage.
2. A small training contribution (sometimes £0): Many SMEs pay just 5% of the training cost, and sometimes nothing at all, depending on the apprentice’s age and funding options.
Because the government covers most training costs, apprenticeships are often one of the most affordable ways to recruit and develop new talent.
Talk to our experts
If you're curious about how apprenticeships could work for your business, our team is always happy to talk.
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