Apprenticeship Levy Calculator
Work out what your organisation pays into the Growth and Skills Levy, how much is available to spend on training, and when it expires. Updated for the changes taking effect on 1 August 2026.
Total earnings subject to Class 1 secondary National Insurance, across the whole group.
Leave as 1 if your organisation is not part of a group. Connected companies share a single allowance.
How the levy is calculated
The calculation has three parts and has not changed since the levy was introduced, even though the levy itself was renamed the Growth and Skills Levy in April 2026.
| Rate | 0.5% of your annual pay bill |
|---|---|
| Allowance | £15,000 per year, offset against what you owe |
| Effective threshold | £3,000,000 annual pay bill, because 0.5% of £3m is exactly £15,000 |
Your pay bill is total employee earnings subject to Class 1 secondary National Insurance contributions. It includes wages, bonuses and commission. It does not include benefits in kind or employer pension contributions.
Worked example
An employer has an annual pay bill of £5,000,000.
0.5% of £5,000,000 = £25,000
£25,000 less the £15,000 allowance = £10,000 payable for the year
In practice HMRC works this out cumulatively each month, with £1,250 of allowance applied per month, so the figure is spread across the year rather than paid in one go.
Connected companies
If your organisation is part of a group, the group shares a single £15,000 allowance rather than getting one each. You decide how to divide it between the connected companies at the start of the tax year, and that split cannot be changed until the following year.
What changed on 1 August 2026
Three changes take effect from the start of the 2026/27 academic year, and they matter more to how you spend the money than to how much you pay.
| Change | Before | From 1 August 2026 |
|---|---|---|
| Government top-up on funds entering your account | 10% | Removed |
| Time before unspent funds expire | 24 months | 12 months |
| Your contribution once your funds are exhausted | 5% | 25% |
The halved expiry window is the one to plan around. Funds that entered your account before the change keep their original 24 month window and are drawn down first, so the tightening arrives gradually rather than all at once. But from now on, money you contribute has one year to be committed to training before it returns to the Treasury.
What your levy buys
Apprenticeship funding is set in bands per standard. The Level 4 Artificial Intelligence and Automation Practitioner apprenticeship, standard ST1512, sits at a maximum band of £18,000 per learner. That covers training and end point assessment in full for an eligible learner in England. It does not cover wages, travel or equipment, which remain your cost.
The apprenticeship is fourteen months plus end point assessment, requires no degree and no coding, and is designed for people already employed rather than new hires. Your apprentice keeps their job, their salary and their responsibilities throughout.
Why AI apprenticeships may be the strongest use of your levy
Your levy can fund hundreds of different standards. Here is the case for spending it on this one.
The evidence that AI capability separates businesses is now substantial rather than anecdotal. PwC’s 2026 Global AI Jobs Barometer analysed more than a billion job adverts across 27 countries alongside company financial data, and the picture it describes is one of widening distance between organisations.
Productivity growth is 40% higher at the companies most exposed to AI than at the least. The top fifth of those companies have grown labour productivity by 163% since 2018. And just 20% of companies are capturing 74% of all the value AI has created so far.
That last figure is the one worth sitting with. If a fifth of companies are capturing three quarters of the value, then AI is not behaving like a technology that lifts everybody who buys it. Almost every organisation now has access to the same tools, at broadly the same price, from the same handful of vendors. Access is not the variable.
PwC also found that the skills demanded by the most AI-exposed jobs are changing more than twice as fast as elsewhere in the labour market, that job postings requiring specific AI skills grew by 69% in a year against 9% growth in the jobs market overall, and that the average wage premium on roles requiring AI skills has reached 62%, up from 57% the year before. The demand is real and it is moving faster than most organisations can hire against.
It is worth being straight about the other half of the picture. Adoption has run well ahead of results for most organisations, and only a small minority of chief executives report that AI has produced more than a slight increase in revenue so far. That gap between deploying tools and getting value from them is the whole problem, and it is a capability problem rather than a software problem.
Why an apprenticeship rather than a course
Short AI courses teach people what the tools do. That is the part that is already widely available and it is not where organisations are stuck.
The Level 4 AI and Automation Practitioner apprenticeship runs for fourteen months plus end point assessment, and the majority of it is applied work inside your own organisation, on your own processes, reviewed by a qualified coach. Your apprentice spends a year identifying which of your workflows are worth automating, building them, and measuring whether they helped. What you get at the end is not a certificate. It is someone who has already done the work once, in your business, and can do it again.
And it comes out of money you have already paid. The levy is not a training budget you are choosing to spend. It is a contribution you have already made, sitting in an account, with a twelve month clock on it from August. Spending it on capability your competitors are visibly converting into productivity is a straightforward decision. Letting it return to the Treasury is also a decision.
Productivity and wage figures from PwC’s 2026 Global AI Jobs Barometer, published 15 June 2026, based on analysis of over one billion job adverts across 27 countries and territories. Comparisons are between companies with the highest and lowest AI exposure and describe an observed gap between groups of companies rather than a predicted outcome for any individual employer. Read the report.
Common questions
Who pays the apprenticeship levy?
Any UK employer with an annual pay bill above £3 million, across all sectors, public and private. Roughly two per cent of employers pay it.
Do employees pay the levy?
No. It is an employer charge collected through PAYE alongside National Insurance. Nothing is deducted from employee pay.
What can the levy be spent on?
Training and end point assessment against an approved apprenticeship standard, delivered by a provider on the register. It cannot be spent on wages, travel, subsistence, equipment, recruitment costs, or short courses that are not apprenticeships.
Can existing staff do an apprenticeship?
Yes, and for most employers this is the better use of the money. An apprenticeship is a funded training programme rather than an age bracket or a hiring route. Existing employees of any age can do one provided the training is materially new to them.
What if we do not pay the levy?
Employers below the £3 million threshold do not pay in, but can still access apprenticeship funding through government co-investment, and there is full government funding for younger apprentices at smaller employers. You can also receive transferred funds from a levy paying employer.
Can we transfer unused levy funds?
Yes. Levy paying employers can transfer a proportion of their annual funds to other employers, including within a supply chain. Transferred funds cover the full cost of the apprenticeship for the receiving employer.
Figures reflect the rules in force from 1 August 2026. The levy rate, allowance and threshold are set by HM Revenue and Customs; funding bands and spending rules are set by Skills England. This calculator is for guidance and is not a substitute for advice from your payroll provider or accountant.