Apprenticeships and trainees in the United Kingdom
Reviewed by Mellow Editorial Team, HR & payroll content team
Hiring an apprentice or trainee in the UK involves specific pay rules, funding arrangements and legal obligations that differ meaningfully from standard employment. Getting these right from the start protects you from compliance risk and helps you build a genuinely useful programme.
What counts as an apprenticeship in the UK
An apprenticeship is a paid job that combines practical work with structured training. In England, apprenticeships follow government-approved standards (known as apprenticeship standards) set by industry groups. Scotland, Wales and Northern Ireland run their own frameworks with some differences in funding and administration, so check the relevant national body if you operate outside England.
Apprentices must be employed for at least 30 hours a week (or a minimum of 16 hours in certain circumstances), spend at least 20% of their paid hours on "off-the-job" training, and work towards a recognised qualification or end-point assessment. The apprenticeship must last at least 12 months.
Trainees are different. A traineeship is a shorter pre-employment programme aimed at younger people who are not yet ready for an apprenticeship or full employment. It focuses on work experience and employability skills. Traineeships in England were formally closed to new starts in 2023, so if you are looking at a trainee scheme now, you are most likely either running an internal work experience arrangement or using a sector-specific programme — check current availability with the Education and Skills Funding Agency (ESFA).
Pay obligations
Apprentices are workers in law and are entitled to at least the National Minimum Wage. The apprentice rate applies to apprentices who are either under 19, or 19 and over but in the first year of their apprenticeship. After that point, they are entitled to the rate for their actual age. These rates change each April, so confirm the current figures on GOV.UK before setting pay.
Underpaying apprentices is a common compliance failure and HMRC actively enforces it. Bear in mind that the 20% off-the-job training time counts as working time for pay purposes — it is not unpaid study leave.
Apprentices also accrue statutory annual leave in the same way as other workers: 5.6 weeks (28 days including bank holidays for someone on a five-day week). They are eligible for Statutory Sick Pay where they meet the qualifying conditions, and family leave rights apply. The Employment Rights Act 2025 strengthened day-one rights further, so check whether recent changes affect how you handle things like unfair dismissal protection for apprentices on longer programmes.
Funding and the levy
If your annual pay bill is over £3 million, you pay the Apprenticeship Levy — currently 0.5% of your total pay bill above a £15,000 allowance. Those funds sit in a Digital Apprenticeship Service account and can only be spent on approved apprenticeship training and assessment.
If you are below the levy threshold, you pay only 5% of the training cost and the government covers the remaining 95% for most apprenticeship standards. Some small employers with fewer than 50 employees pay nothing at all for apprentices aged 16 to 21 — the government funds 100% of the training cost up to the funding band maximum.
Funding covers training and end-point assessment only. It does not cover the apprentice's wages, equipment or any other employment costs — those are yours to meet in full.
Tax and National Insurance
Apprentices are employees for PAYE purposes. You run their pay through payroll in the normal way, deducting income tax using their tax code and collecting National Insurance contributions. Employees pay 8% NI on earnings between the primary threshold and the upper earnings limit, then 2% above that. You pay employer NI at 13.8% on earnings above the secondary threshold.
One important exception: if you hire an apprentice who is under 25, you pay zero employer National Insurance on their earnings up to the upper secondary threshold. This is a meaningful cost saving and applies automatically — you just need to use the correct NI category letter in your payroll software. Confirm the current threshold on GOV.UK or with your payroll provider.
Auto-enrolment pension duties apply to apprentices in the same way as other workers. Once they meet the age and earnings criteria, you must enrol them, contribute at least 3% of qualifying earnings and ensure they contribute at least 5%.
Managing the programme day to day
You must have a written apprenticeship agreement in place before the apprenticeship starts. This sets out the skill, trade or occupation the apprentice is training for and references the apprenticeship standard. Separately, a commitment statement signed by you, the apprentice and the training provider sets out the plan for the programme.
Your training provider carries much of the administrative load — registering the apprenticeship, managing off-the-job records and organising the end-point assessment — but the employment relationship and pay obligations sit entirely with you. Maintain clear records of hours worked, training time and pay, and keep your Digital Apprenticeship Service account up to date if you are a levy payer.
If an apprenticeship does not work out, ending it early requires care. Apprentices have employment rights and, depending on the length of their programme and the terms of your agreement, dismissal before the end of the planned duration can carry legal risk. Take advice before acting.
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