Cost of apprenticeships a young female is on a laptop with two male colleagues either side of her — When it comes to developing your workforce, few options offer better value for money than apprenticeships. However, it is surprising how many employers are still unsure about what exactly is involved, especially when it comes to the cost of apprenticeships.

Are they expensive to run? Who pays for what? And do they really deliver a return on investment?
This blog aims to answer all those questions and show you why the cost of apprenticeships can be a shrewd investment for employers.

What Is an Apprenticeship?

An apprenticeship is a formal, government-recognised training programme that combines real work with structured study. Apprentices are employees, but they also receive off-the-job training. This training usually occurs one day a week, 6 hours minimum, to work towards a recognised qualification.

The qualifications available to apprentices can be anything from GCSE-level certificates right up to a full university degree, depending on the apprenticeship level taken. For employers, this means you're getting hands-on support from day one to train these team members. In addition to this, you are also helping the apprentice develop into a highly skilled professional tailored to your business needs.

Apprenticeships are not just about young people either; this is a common misconception. Indeed, apprenticeships are available to existing employees too, meaning you can upskill your team at a fraction of the cost of private training.

Breaking Down the Cost of Apprenticeships

So, let’s look at who pays for what, and why the cost of apprenticeships is often far lower than most employers expect.

1. Apprenticeship Levy (for Large Employers)

Cost of apprenticeships 5 apprentices, mixed race and sex in navy polo top uniforms — If your annual payroll exceeds £3 million, you’re required, by the Government, to pay the Apprenticeship Levy, a 0.5% tax on your annual payroll. This money goes into a digital apprenticeship account that you can draw from to fund apprenticeship training.

Key facts:
Your company's funds are available for 24 months before they expire.
You use these funds to train apprentices, and these can be new recruits or existing staff.
If you don’t use the money, it goes back to the Government, so it's crucial to maximise this resource.

2. Government Funding (for Small Employers)

If your annual payroll is under £3 million, you don’t pay the Apprenticeship Levy. However, that makes your company eligible for significant Government support:

Key facts:

100% of the training costs are covered for apprentices aged under 21.
For apprentices aged 21 and over, you, the employer, contribute just 5% of the training cost. The Government covers the other 95%.

For example, if the total training cost for your apprentice is £8,000, your contribution would only be £400 spread over the 12-14 months that the apprentice is on their programme. Now that's a shrewd investment!

3. Incentives for Employers

There are also additional financial incentives for employers that are available in certain situations:

There is an extra £1,000 payment for small businesses when employing 16–18-year-olds (or 19-24-year-olds if they have an Education, Health and Care Plan).
From April 2025, for apprentices under 25 years of age, earning under the threshold, employers are exempt from paying National Insurance.

These incentives help reduce the overall cost of apprenticeships further, making them an even more attractive investment.

What Does an Employer Actually Pay?

Besides the training contribution (if applicable), the primary expense is the apprentice’s salary.

Cost of apprenticeships in business a male and female colleague working together on a laptop — As of April 2025, the apprentice minimum wage is £7.55 per hour. However, you’re free to pay more, and in many industries, doing so helps attract high-calibre candidates. Of course, while wages do factor into the cost of apprenticeships, they are usually lower than recruiting an experienced member of staff.

In addition to this, apprentices tend to be motivated, loyal, and adaptable. Many employers find they deliver real value long before they even finish their training.

What About Additional (Hidden) Costs?

Whilst the cost of apprenticeships is relatively low, there are a few practical considerations:

Uniforms or PPE: Often required, especially in trades or technical roles.
Travel expenses: Depending on the location of the training provider.
Time investment: Supervisors or mentors may need to provide support or coaching.
Equipment: A laptop or toolkit may be needed for certain roles.

However, these costs are typically small compared to the average training budget and certainly some of them would be relevant to any new employee, not just apprentices.

Why Apprenticeships Are Worth the Investment

The return on the cost of apprenticeships can be substantial. Employers who embrace apprenticeships consistently report benefits such as:

Improved staff retention
Increased productivity
A stronger talent pipeline
Enhanced staff loyalty
Reduced recruitment costs

And remember, apprenticeships are not just for entry-level roles. Degree apprenticeships and higher-level programmes allow you to upskill managers, technical leads, and even senior staff, with most of the cost covered.

Apprenticeships for All Industries

There are currently over 700 apprenticeship standards across a wide range of sectors:

Business administration and accounts
Marketing and market research
Business management
HR and recruitment
Supply chain and logistics
Engineering and industrial
Construction and trades
Healthcare and social care
Finance and legal
Science, aerospace, and more

No matter your sector, there’s likely a programme that fits your business. And with the cost of apprenticeships so well supported, there’s very little reason not to explore them.

Here at Swarm Training, we work with employers in both Business Apprenticeships and Engineering and Industrial Apprenticeships. Click on the links to discover how we can deliver quality apprenticeships for your business.

The Bottom Line: What Is the Real Cost of Apprenticeships?

We hope this blog has helped you realise that the cost of apprenticeships, when weighed against the benefits, is exceptionally low. With generous government funding, low employer contributions, and high returns in productivity and staff development, apprenticeships make both strategic and financial sense.

In fact, the real cost might be in not using them. Indeed, we've written a whole blog focusing on the under-utilisation of the Apprenticeship Levy Allowance that you may be interested in, just follow this link to read it.

So, are you guilty of missing out on government funding, fresh talent, and future leaders trained exactly to your standards?

Get Started with Apprenticeships

Cost of apprenticeships 2 electricians working on a complex circuit board — If you’re now ready to take advantage of the opportunities apprenticeships have to offer, or you just want to explore how they could fit into your workforce planning, we’re here to help.
At Swarm Training, we support employers every step of the way. From identifying suitable apprenticeship candidates to training them into highly skilled members of your team, we make the process simple and worthwhile.

Final Thought

The cost of apprenticeships shouldn’t be a barrier to you; it should be the reason you start.

Because in a time when skilled talent is hard to find and training budgets are tight, apprenticeships offer something rare: a win-win solution, a shrewd investment that you'll be delighted you took.

Ready to invest in your team, your future, and your bottom line? Let’s talk.

The Cost of Apprenticeships: A Shrewd Investment for Employers