17:22 February 23, 2022
There are a number of costs involved when recruiting apprentices, but many companies will find financing options available that will help with these expenses.
The government is keen for companies to take on young apprentices to help get people to work after the pandemic and is offering age bonuses to encourage their recruitment.
All businesses can claim £1,000 when employing an apprentice aged 16-18, or if they are aged 19-24 and have already been supported or have an education plan, Health and Care (EHCP).
The money is paid in two equal installments, with companies receiving half after the apprentice has completed 90 days of their apprenticeship and the other half after 365 days. Payment is automatically available through the training provider and then forwarded to the employer.
There was also an additional £3,000 available for every apprentice of any age hired between October 1, 2021 and January 31, 2022 who begins their apprenticeship training before March 31, 2022.
For businesses based in Norfolk, there is local funding they can apply for to help cover the costs of hiring apprentices.
Norfolk businesses can apply for £1,000 incentive grants, as well as £500 scholarships when recruiting apprentices aged 16-24. These grants can be applied for through Apprenticeships Norfolk.
Companies are required to pay an apprenticeship tax of 0.5% of the employer’s annual payroll, but companies do not have to pay this tax if they have an annual payroll of less than £3m sterling.
Businesses that have to pay the tax can apply for an allowance which reduces the amount they pay by £15,000 over the year. This allowance is available to employers not connected to another business or charity, but those who are connected can share a £15,000 allowance between all businesses and charities.
Companies that do not need to pay the levy pay 5% for the cost of training and evaluating the apprentice. The employer must agree a payment schedule with the training provider and pay them directly for the training. The government will then pay the remainder up to the maximum funding which will be paid directly to the training provider.
Companies that must pay the apprenticeship levy will receive funds to spend on the training and assessment of apprentices. The government will add 10 pc.
Although there are a number of financing options available to businesses, businesses should be aware of the costs involved when hiring apprentices.
Apprentices must receive a salary which includes the time they are on the job and in “off-the-job” training, including holiday pay of at least 20 days a year plus public holidays.
A National Apprenticeship Minimum Wage is applicable to apprentices aged 16-18 and those aged 19 or over in the first year of their apprenticeship, which is currently £4.30 an hour. People aged 19 or over are entitled to the national minimum wage for their age once they have completed their first year.
Employers should also consider the additional costs associated with hiring apprentices, including payment for tools, equipment and travel.