From 6th April 2017, all UK employers with annual salary bills of more than £3 million will pay an apprenticeship levy, it’s aim is to fund apprenticeships across the UK.
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.
More information on this is available on the government website here
Here’s a couple of examples that help explain it clearly:
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.
We can help, we run a fully managed payroll service, to find out more please email email@example.com