Apprenticeship Levy

The Levy

All UK employers with annual salary bills of more than £3 million now pay an apprenticeship levy.

If you're an employer in Scotland who already has apprenticeship programmes in your organisation, apprenticeship funding will continue to be administered by Skills Development Scotland through contracted training providers and direct employer contracts.

If you don’t currently have any apprenticeship programmes, this is your opportunity to discover how work-based learning can drive your organisation forward in terms of performance and productivity. Read all about our Foundation, Modern and Graduate Apprenticeship programmes

Flexible Workforce Development Fund

If you’re an employer paying the apprenticeship levy in Scotland, you could apply for up to £15,000 towards the cost of training your workforce.

The Scottish Government’s Flexible Workforce Development Fund (FWDF) is available to employers across the private, public and third sectors subject to the UK Government’s Apprenticeship Levy.

The deadline for Levy-paying employers to make an application is the end of July 2019.

The Flexible Workforce Development Fund (FWDF) is administered by the Scottish Funding Council on behalf of the Scottish Government.

Tools and resources

Read more about the apprenticeship levy and its background on the Scottish Government website. They have also published a Seven things you need to know about apprenticeships guide featuring the levy. You can also view our levy FAQs.

For information on paying the levy read HMRC's published guidance.

To understand the difference in apprenticeship policy across the four home nations you can view the SQA’s interactive table

Get in touch

We can help you maximise apprenticeship opportunities for your organisation. For free support contact our employer helpline on 0800 783 6000 or fill out our support request form.


What is the Apprenticeship Levy?

The Apprenticeship Levy is a UK Government employment tax that came into effect on 6 April 2017. It will be collected across the whole of the UK. All employers (public, private and third sector) with a pay bill of more than £3 million each year will pay the levy.

How will it work?

The levy is set at 0.5% of an employer’s annual wage bill and each employer will receive an allowance of £15,000 per year to offset against the levy. This means that although the levy applies to all employers, only employers with a wage bill over £3 million will pay it.

For example:

Employer A has 250 employees, each with a gross salary of £20,000. They would pay:

  • Pay bill: 250 x £20,000 = £5,000,000

  • Levy sum: 0.5% x £5,000,000 = £25,000

  • Allowance: £25,000 - £15,000 = £10,000 annual levy payment

Employer B has 100 employees, each with a gross salary of £20,000. They would pay:

  • Pay bill: 100 x £20,000 = £2,000,000

  • Levy sum: 0.5% x £2,000,000 = £10,000

  • Allowance: £10,000 - £15,000 = £0 annual levy payment

Employers who operate multiple payrolls will only be able to claim one allowance.

You can use the Skills Funding Agency's indicative online tool for employers to estimate your levy contribution, begin your training requirements, and estimate your financial spending.

You can find further details on the calculation and payment of the apprenticeship levy on

How will employers pay the apprenticeship levy?

Each month, HM Revenue and Customs (HMRC) will collect the levy through Pay As You Earn (PAYE),  payable alongside income tax and National Insurance. HM Treasury will allocate funding to the Scottish Government through the block grant.

For further details on the calculation and payment of the apprenticeship levy, read HMRC draft legislation.

What will employers get back from the levy?

The Scottish Government's response to the UK Government Apprenticeship Levy sets out how they will use the £221m of levy funding over 2017/18 to support skills, training and employment in Scotland. This includes the delivery of 30,000 Modern Apprenticeship starts per year by 2020, and the establishment of a Workforce Development Fund to help employers up-skill and re-skill their workforce.

Do employers who fund their own apprenticeships still have to pay the levy?

Yes. All employers with a wage bill greater than £3million will pay the levy. Employers could review their skills needs and consider how their current training could be delivered through an approved apprenticeship to maximise their return on the levy.

Will employers who don’t pay the levy still get funding for apprenticeships?

Yes. All employers will still be able to access funding for approved apprenticeships. We recognise that apprenticeships are an essential way for SMEs to develop their employees and contribute to growth.

Will Scottish apprenticeships be funded in a similar way to apprenticeships in England?

No. Scotland and England have different administrative arrangements for funding apprenticeships.

In England, funding for apprenticeship training will be administered through a digital apprenticeship system for levy paying employers. There are no plans to adopt this system in Scotland, and apprenticeship funding will continue to be administered by SDS through contracted learning providers and direct employer contracts.

Will employers who pay a training levy still have to pay this new levy?

Yes, if they have a pay bill greater than £3million, as the apprenticeship levy applies to all employers.

There are two existing industry training boards – the Construction Industry Training Board (CITB) and the Engineering Construction Industry Training Board (ECITB) – which operate their own levies.

Both bodies are in consultation with their member companies on how the new apprenticeship levy will interact with their current levy mechanisms. Both will offer more information when it is available.

What support will be available to help employers understand what these changes mean?

SDS will work with employers, including industry bodies, to provide support as administrative arrangements are developed.

We’ll keep updating this page with the latest information for employers on the apprenticeship levy.

How is Skills Development Scotland involved?

Skills Development Scotland (SDS) has established an employer-led Scottish Apprenticeship Advisory Board  (SAAB) to strengthen employer contribution to the development of apprenticeships in Scotland, ensuring they are aligned with industry and economic need, Fair Work and job opportunities.

Both SDS and SAAB continue to engage with the Scottish Government, employers and partners ahead of the levy's introduction.

As part of this, the the Minister for Employability and Training, Jamie Hepburn, has emphasised that the Workforce Development Fund – aimed at helping employers up-skill and re-skill their workforce - will be developed through the Scottish Apprenticeship Advisory Board and that a working group will be set up in due course. Read further details in our news story.

What is the Scottish Apprenticeship Advisory Board?

Led by employers and representatives from industry bodies across a range of sectors, the Scottish Apprenticeship Advisory Board (SAAB) will provide employer leadership and contribution to the development of apprenticeships in Scotland; ensuring they are aligned with industry and economic need, Fair Work and job opportunities. The Board consists of four groups – a Group Board, Employer Engagement Group, Employer Equalities Group and Frameworks and Standards Group.

The Board will also contribute to the Scottish Government’s consultation process on the Apprenticeship Levy and also actively encourage others with a shared interest in apprenticeships to participate.

SDS will work with the Board to ensure a demand-led, responsive and adaptive work-based learning system for employers and the Scottish economy.

What's the background to the apprenticeship levy?

The UK Government announced plans for a UK-wide apprenticeship levy on employer payroll bills in 2015.

The levy is aimed at funding increased uptake of apprenticeships.
Legislation will be introduced in 2016 and the levy itself will be payable from April 2017 onwards.