Apprenticeship Incentives for Employers
The financial support available for employers taking on apprentices continues to make apprenticeships an attractive way to recruit new talent and develop your workforce.
Depending on the age and circumstances of the apprentice, the size of your organisation and how your apprenticeship training is funded, your business could benefit from a range of government funding and employer incentives.
Support available in 2026 can include the £1,000 employer payment for eligible younger apprentices, apprenticeship levy funding and, in eligible circumstances, 100% government-funded apprenticeship training.
The level of support available will vary from employer to employer, so it’s important to understand what your business and apprentice are eligible for before they start.
At Knights Training Academy, we’ll check this with you from the outset. Our team can help you understand the funding available, any employer payments you may be entitled to and how these are paid, while supporting you through the apprenticeship process from enrolment onwards.
Employer incentive payment (where eligible)
Employer National Insurance relief – no employer Class 1 NICs for qualifying apprentices under 25, up to the applicable earnings threshold.
SME Hiring Incentive
Non-levy paying SMEs hiring apprentices aged 16-24
Non-levy paying SMEs hiring apprentices aged 16-24
Universal Credit Youth Jobs Grant
Any employer hiring 18- 24-year-olds on UC for 6+ months
Any employer hiring 18- 24-year-olds on UC for 6+ months
The £1,000 Young Apprentice Payment
Employers can receive an additional £1,000 payment when they take on an apprentice aged 16–18, or an eligible apprentice aged 19–24 who has an Education, Health and Care Plan (EHCP) or has previously been in local authority care.
The £1,000 is separate from the funding available for apprenticeship training and does not come out of your apprenticeship service account.
The payment is normally made in two £500 instalments. Funding is passed to Knights Training Academy by the government and we then arrange for the relevant payment to be passed on to your business, subject to eligibility.
The £2,000 SME Hiring Incentive
From 1 October 2026, eligible small and medium-sized employers will be able to receive a £2,000 incentive when taking on an apprentice aged 16–24, subject to the government’s eligibility requirements.
The incentive is designed to support employers recruiting young people into apprenticeship opportunities and sits alongside other financial support that may be available.
Eligible SMEs may also benefit from fully funded apprenticeship training for qualifying younger apprentices and employer National Insurance relief for eligible apprentices under 25.
Where a 16–18-year-old apprentice also meets the requirements for the existing £1,000 employer payment, this could provide additional financial support alongside the new incentive.
The £3,000 Universal Credit Youth Jobs Grant
Employers may be able to receive a £3,000 Youth Jobs Grant when recruiting an eligible young person aged 18–24 who has been claiming Universal Credit for at least six months.
Unlike some apprenticeship incentive payments, the Youth Jobs Grant is expected to be paid directly to the employer, rather than being passed through the apprenticeship training provider.
The grant may also be available alongside other apprenticeship funding and incentives. This means an eligible employer recruiting a qualifying young apprentice could potentially benefit from more than one form of financial support.
For example, where all eligibility requirements are met, an SME recruiting a qualifying young person could potentially benefit from both the £3,000 Youth Jobs Grant and the £2,000 young apprentice incentive.
When Will You Receive the Incentive Payments?
Employer incentives can provide valuable financial support, but it’s important to remember that payments aren’t usually received immediately when the apprenticeship starts.
Many apprenticeship incentive payments are paid in stages and are dependent on the apprentice remaining eligible and reaching the required milestones.
What to Expect
Apprenticeship Starts
The apprentice begins their programme and their eligibility for the relevant incentive is confirmed.
Eligibility & Milestones
The apprentice must remain eligible and in learning for the period specified by the relevant funding or incentive scheme.
Payment Released
Once the required milestone has been reached, the relevant government department processes the payment.
Payment to Employer
Where an incentive is administered through Knights Training Academy, we will pass the appropriate payment to the employer once it has been received and the relevant requirements have been met.
Plan Ahead
We recommend that employers don’t rely on incentive payments as immediate income when budgeting for a new apprentice. Payments can take several months to reach the employer and timings can vary depending on the particular incentive.
Knights Training Academy will explain the payment process and expected timescales for any incentives you’re eligible for before the apprenticeship begins.
What about Apprenticeship training Costs
Employer incentive payments are separate from the funding available for apprenticeship training. What your business contributes towards the training will depend on your organisation, the apprentice and their circumstances.
Small & Medium-Sized Employers
For eligible non-levy employers recruiting younger apprentices, the government can cover 100% of the apprenticeship training and assessment costs, up to the maximum funding band for the apprenticeship.
In other circumstances, employers may be required to make a contribution towards the cost of training.
Levy-Paying Employers
If your organisation pays the apprenticeship levy, eligible apprenticeship training is normally funded through your apprenticeship service account.
The amount available and any employer contribution will depend on the apprentice’s circumstances, available levy funds and the funding rules in place at the time they start.
Copyright © 2026