How Much Should You Pay an Apprentice?
If you’re an employer that wants to invest in training and talent, then an apprentice could be exactly what you’re looking for.
In this article, we’re discussing apprentice pay and working conditions, so you can offer a working environment that meets government standards and attracts top apprentice talent.
What is the Apprentice Minimum Wage?
There are a few key numbers that you need to be aware of when it comes to calculating the pay of an apprentice. The pay rate will also be increasing in just a few short months at the start of the financial year, so do bear this in mind.
Currently, apprentices are entitled to £3.70 per hour. This is the rate for apprentices under the age of 19, or those that are 19+ but in the first year of their apprenticeship. In April of 2019, this will rise to £3.90 per hour.
After the first year of their apprenticeship, if the apprentice is over the age of 19, the apprentice is then entitled to the National Minimum Wage for their age bracket. For those between 18 and 20, this is currently £5.90 per hour, rising to £6.15 per hour in April.
For apprentices in the age bracket of 21 to 24 that have completed the first year of their apprenticeship, the current rate is £7.38 per hour increasing to £7.70 per hour in April. For those 25 and over, the current rate is £7.83 rising to £8.21.
If the apprenticeship that you’re offering only lasts a single year, then you would renegotiate the pay with the apprentice if you intend to keep them as a full member of staff in the future.
Remember these are the minimum amounts that you can pay an apprentice; it’s possible to pay them more if the employer wishes.
Apprentices under the age of 25 are also exempt from paying Class 1 National Insurance Contributions if they earn under £43,000 per year.
Employers must also pay for training for the apprentice too, which should account for 20% of their time in the role. All of these fine details should be included in the apprenticeship agreement that you draw up. This defines what you expect from the apprentice and also what they can expect from you too.
The amount of time that you specify that the apprenticeship lasts should be adhered to, otherwise you could face fines for unfair dismissal. (There are conditions in which you can terminate the contract early, but these should be discussed with your HR department before proceeding.)
Apprenticeships for Existing Members of Staff
Using your Apprenticeship Levy or your apprenticeship funds to train existing members of staff is also an effective investment.
While you’re providing this training, you can’t decrease a member of staff’s pay. They must be maintained at the same level, unless increased or decreased due to external factors such as a change in position.
All training given must be beneficial and useful to the employee in order for you to qualify for funding. It must be above and beyond the training that they would receive in the course of their day-to-day work.
There should also be an Apprenticeship Agreement between the existing employee and employer to cover the course of the training.
The Link Between Pay and Course Completion
While we’ve outlined the minimum that you can pay these apprentices, the CIPD has highlighted a strong link between apprentice pay and success.
The CIPD states that paying above the National Minimum Wage increases both the likelihood that the apprentice will complete the course and the likelihood that they’ll stay with the company after completion.
Consider if investing in a higher apprentice salary initially would create a better working relationship in the future. If you can’t afford to increase apprentice pay, be sure to offer additional development or mentoring opportunities whenever possible.
However much you pay your apprentices, be sure to treat them equally with your other employees in terms of sick leave, holidays and perks to keep them motivated and engaged.
Apprenticeship Training Funding and Grants
In addition to your apprentice’s salary, you’ll also need to invest in their 20% off-the-job training.
If you don’t pay the apprenticeship levy (i.e. if your organisation’s salary bill is less than £3 million per year), the government will pay 90% of your apprenticeship training fees, with your organisation contributing the remaining 10%.
If you do pay the apprenticeship levy, you’ll use your funds to pay for training with a RoATP-approved training provider. Your levy can only be used to pay your training provider; it can’t be spent on apprentice salaries or expenses.
Creating the best working environment for your apprentice will keep them as an asset for your company long-term. These apprenticeship pay basics will help your business provide the ideal environment for your apprentice to thrive.
More questions about apprenticeships? Find out more about the online apprenticeship training we offer in HR, finance, management and more.