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Funding· 9 min read

Government incentives for employers hiring an apprentice

Apprenticeship training is only part of the financial picture. Alongside levy and co-investment funding, the government offers a set of cash incentives, exemptions and additional payments that many schools, trusts and colleges never claim. This guide sets out what is available in England as of August 2026, who qualifies, and how the money reaches you.

A school business manager and headteacher reviewing apprenticeship funding paperwork

Rules change frequently, and the figures below reflect published Department for Education and HMRC guidance at the time of writing. Always confirm current eligibility in your apprenticeship service account or with your NCE Partnerships Manager before you build a budget around a payment.

1. £1,000 payment for hiring a young apprentice

Employers receive £1,000 when they take on an apprentice who is aged 16 to 18, or aged 19 to 24 with an education, health and care plan or who has been in the care of their local authority. The training provider receives a matching £1,000 to support that apprentice.

Paid in two equal instalments, at 90 days and at 365 days on programme.
Paid through your apprenticeship service account, so the account must be set up and the apprentice recorded on it.
Available to levy payers and non-levy payers alike.
It is not ring-fenced. You can spend it on anything, from equipment and travel to salary support.

2. Hiring payment of up to £2,000 from 1 October 2026

The government has confirmed a new hiring payment of up to £2,000 for employers recruiting new apprentices aged 16 to 24, applying to eligible starts from 1 October 2026. It is designed to reduce the up-front cost of creating a genuinely new apprenticeship role rather than upskilling an existing member of staff.

Eligibility is set out in the apprenticeship funding rules for 2026 to 2027. If you are planning autumn or spring recruitment, it is worth checking start dates against that threshold before you confirm contracts.

3. No employer National Insurance for apprentices under 25

You do not pay employer Class 1 National Insurance contributions for an apprentice who is under 25, on an approved English apprenticeship standard, and earning less than £967 a week (£50,270 a year). The apprentice still pays their own contributions, so the saving sits entirely with the employer.

For a school employing a young teaching assistant apprentice, this is often the largest single saving of the year, and it applies for the whole time the apprentice remains eligible.

4. Full training costs covered for young apprentices at smaller employers

Employers who do not pay the apprenticeship levy have their training and assessment costs met in full, up to the funding band maximum, for apprentices aged 16 to 24. The 5% co-investment contribution has been removed for that group, which means many small schools, nurseries, single-academy trusts and charities pay nothing towards training for a young apprentice.

For apprentices aged 25 and over at a non-levy employer, the standard split still applies: you pay 5% and the government pays the remaining 95%, up to the band maximum.

5. Levy transfer, which can remove your 5% entirely

Levy-paying employers can transfer up to 50% of their annual levy funds to other organisations. If you are a non-levy employer, or a levy payer who has exhausted their pot, a transfer can cover 100% of training and assessment costs, including the 5% you would otherwise pay.

Transfers are arranged through the apprenticeship service, and many large trusts, local authorities and employers advertise their unused funds publicly. NCE regularly brokers these arrangements for partner settings, so ask us before you assume you have to fund the contribution yourself.

6. Additional payments for apprentices who need more support

£150 a month of learning support funding for apprentices with an identified learning difficulty or disability, with additional evidence-based costs claimable above that.
A £3,000 bursary paid to care leavers aged 16 to 24 starting an apprenticeship, paid to the apprentice rather than the employer.
Funded English and maths training where an apprentice does not already hold the required qualifications, at no cost to your budget.

7. Wage flexibility through the apprentice rate

Apprentices under 19, and those aged 19 or over in the first year of their apprenticeship, can be paid the National Minimum Wage apprentice rate. Most education employers choose to pay above it, but the flexibility exists and can help fund a genuinely new post in a tight budget year.

What this looks like in practice

A primary school that is not a levy payer recruits a 17 year old teaching assistant apprentice. Training and assessment are funded in full by the government. The school pays no employer National Insurance on the apprentice's salary. It receives £1,000 in two instalments across the first year. If the start date falls on or after 1 October 2026 and the role is new, a hiring payment of up to £2,000 may also apply. The only cost the school carries is the wage and the time colleagues spend supporting the apprentice.

How to claim

Set up or log in to your apprenticeship service account. Almost every payment flows through it.
Add the apprentice and confirm their date of birth and eligibility category, including EHCP or care-experienced status where relevant.
Approve the training provider's record of the apprenticeship so the start date is registered correctly.
Check your account after 90 days and again at 365 days for incentive payments.
Speak to your NCE Partnerships Manager about levy transfer if you are being asked for a co-investment contribution.

"Most of the employers we work with are entitled to more than they claim. The money is there, it just has to be set up correctly at the start."
— NCE Partnerships Team

Where to check the official rules

GOV.UK, Employing an apprentice: get funding for apprenticeship training.
GOV.UK, Apprenticeship funding rules 2026 to 2027.
GOV.UK, Transferring your apprenticeship levy to another business.
Apprenticeships.gov.uk, Payments for hiring a young apprentice.

If you would like us to model what an apprentice would actually cost your setting once incentives are applied, our team can produce a written breakdown for your finance lead.

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