What are the costs of taking on an apprentice?

In the second of a series of blogs on how an apprenticeship programme can support growth and development at your business, Natalie Cole, coordinator of the Apprentice & Skills Plus service, writes about what are the costs involved of taking on an apprentice.

What are the costs involved and funding available when taking on an apprentice?

In the previous blog post we looked at the many varied benefits of taking on apprentices, but what are the costs involved, and what funding is available to help businesses?

The cost of an apprentice will vary depending on your business size, the type of apprenticeship and the age of your apprentice, but the two principal costs are the apprentice’s salary and the training costs.

Apprentice salary

Just like any employee, apprentices are paid and are entitled to the national minimum wage, holiday pay and sick pay. They must be paid for their normal working hours as well as time spent on training for the apprenticeship. Apprentices can work a minimum of 30 hours, up to a maximum of 40 hours per week. A full-time apprentice is entitled to at least 20 days of paid holiday every year, in addition to bank holidays.

From April 2024, the national minimum wage for an apprentice will be £6.40, but it is worth noting that some employers pay higher rates.

Rates from 1 April 2024:

Apprentice	16 to 17	18 to 20	21 and over
In first year	£6.40	£6.40	£6.40
Have completed first year	£6.40	£8.60	£11.44

Apprentices are entitled to the apprentice rate if they’re either:

• aged under 19
• aged 19 or over and in the first year of their apprenticeship

Apprentices are entitled to the minimum wage for their age if they both:

• are aged 19 or over
• have completed the first year of their apprenticeship

Training costs

Whichever accredited college or training provider you choose, there will be a fee attached to the apprentices training course. This cost varies depending on the course from £1500 to £27000, with most furniture manufacturing / making apprenticeships around £10,000, however government grants will cover at least 95% of this cost and up to 100% in some cases.

The Apprenticeship Levy

The amount of funding available depends on whether a business pays the apprenticeship levy, a government scheme to fund apprenticeships paid by employers with a pay bill of over £3 million. Currently, only 2% of employers pay the levy, which is set at a rate of 0.5% of their total annual pay bill. While only the biggest businesses pay the levy, the funding generated by it also funds apprenticeship training for other employers who want to take on apprentices.

Employers who pay the apprenticeship levy

Every employer who pays the levy has a digital apprentice service account where they can view and access their levy funds to spend on apprenticeship training. HMRC calculate the amount of funds each employer will receive (to spend in England) and a 10% top-up from Government is added to these monthly funds. Any unused funds expire after two years, but employers can pledge up to 25% of their own levy funds to other smaller businesses to support them to invest in apprenticeship programmes.

Employers who don’t pay the apprenticeship levy

Businesses that do not pay the Apprenticeship Levy, pay a maximum of 5% towards the cost of training and assessing an apprentice. For businesses with over 50 employees the Government will fund 95% of the training and assessment costs of apprentices. For businesses with less than 50 employees who hire an apprentice aged 16 – 18, or 19-24 with an education, health and care plan provided by their local authority or has been in care, the government will fund 100% of the apprenticeship training and assessment costs. Employers do not need to do anything to claim this funding; your training provider will process this for you.

Additional apprenticeship funding

For all employers, grants of £1000 are available to support your apprentice in the workplace if they are one of the following:

• 16 to 18 years old
• 19 to 25 years old with an education, health and care plan
• 19 to 25 years old and they used to be in care

It is also worth checking with your local council to see if they offer any apprenticeship initiatives for businesses.

If you would like to have a no obligation chat with Natalie about the benefits of apprenticeships and how to implement a programme, please email natalie@furnituremakers.org.uk. For more information about the Apprentice & Skills Plus service, complete the sign-up form below.

Apprenticeship posts Part one – What are the benefits of apprenticeships? – The Furniture Makers’ Company

About Natalie Cole

Natalie Cole is skills plus coordinator, a role funded by The Furniture Makers’ Company and the Furniture and Interiors Education, Skills and Training Alliance. Natalie has 20 years’ experience in the sector. After studying Furniture Design & Technology at Buckinghamshire Chilterns University, now Bucks New Uni, she ran a small furniture design business for 10 years that combined small run batch production of domestic furniture and products as well as larger scale one-off commissions. Most recently, she has been teaching furniture and product design at Birmingham City University for past eight years. 

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