£2,000 for hiring a young apprentice: new payment for small employers starts 1 October

From 1 October 2026 employers in England can get £2,000 in cash for every new apprentice aged 16 to 24. The money goes to employers who do not pay the apprenticeship levy — almost every small business. There is no application form, and the payment is not for training: it is for the employer.

What does the government give from 1 October 2026?

£2,000 to the employer for hiring a new apprentice aged 16 to 24, paid in two instalments of £1,000.

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It is called the apprenticeship hiring payment and is set out in the official apprenticeship funding rules for 2026 to 2027 (paragraphs 133 to 141). It applies to apprenticeships with a practical period start date of 1 October 2026 or later. The first £1,000 is generated 90 days after the learning start date and the second 365 days after it; for shorter apprenticeships (typical duration under 12 months) and foundation apprenticeships the second instalment comes after 242 days.

Who counts as a non-levy employer?

Any employer with an annual pay bill under £3 million.

The apprenticeship levy is paid by employers with a pay bill over £3 million a year. Everyone else — a coffee shop with three staff, a building firm with twenty — is a non-levy employer, and this payment is aimed at them. If you are a receiving employer using transferred levy funds to pay for the training, you still qualify.

Which apprentices make the employer eligible?

Apprentices aged 16 to 24 at the start of training who have not worked for you for more than 90 days before the practical period starts.

The full list from the rules: aged 16 to 24 (or 15 if their 16th birthday falls between the last Friday of June and 31 August); an apprenticeship agreement with a practical period start date from 1 October 2026; included in the PAYE scheme added to the employer's apprenticeship service account; and not employed by that employer for more than 90 days before the practical period start date. One carve-out: apprentices with an employment start date of 1 or 2 July 2026 are eligible if their training started by 1 October 2026. Foundation apprenticeships count too.

Does the employer have to apply?

No. Eligible apprentices are identified automatically and the money is sent to the training provider.

Before paying, the government validates the employer's HMRC PAYE data against the data the provider submits through the ILR, checking the apprentice's National Insurance number against the employer. So the only thing a business must get right is having the correct PAYE scheme attached to its apprenticeship service account. If the data does not allow the check, no payment is made.

When does the money arrive, and through whom?

Through the training provider, in the month after eligibility is met, and the provider must pass on the full amount within 30 working days.

Both instalments carry the same condition: the apprentice must still be employed by you and still in learning when the payment falls due. If the apprentice takes a break in learning, the payment is delayed until they reach 90 or 365 (or 242) days in learning. If an employer has had the first instalment and the apprentice moves to another employer to continue the same apprenticeship, the new employer can claim the balance. Where a provider cannot pass the money on — for example after three requests for bank details over three months go unanswered — it goes back to the government.

What can the £2,000 be spent on?

Any cost connected with employing the apprentice: tools, uniform, travel.

That is the difference from training funding, which the government pays directly to the provider. The £2,000 supports the employer who takes on an inexperienced person and spends a mentor's time on them.

How much is available in total for one apprentice?

Up to £8,000 for a non-levy employer and up to £6,000 for a levy payer.

The payments stack for the same apprentice. Alongside the hiring payment there is £1,000 when an apprentice starts aged 16 to 18 (or under 25 if they are or have been in care or have an education, health and care plan); £2,000 for foundation apprentices aged 16 to 21 (or under 25 with an EHC plan, care experience, or in or leaving prison); and the £3,000 Youth Jobs Grant for hiring an apprentice aged 18 to 24 who has been out of work and on Universal Credit for six months or more.

What does the training itself cost the employer?

For an apprentice aged 16 to 24, nothing: the government pays 100% of training and assessment up to the funding band maximum.

That holds whether or not you pay the levy. For an apprentice aged 25 or over a non-levy employer pays 5% of the cost and the government 95%; a levy payer who has used up its funds pays 25%. If the provider's price is above the funding band maximum, the employer pays the difference.

What is the legal minimum to pay the apprentice?

£8 an hour from April 2026.

The apprentice rate applies to those under 19, and to those aged 19 and over in the first year of their apprenticeship. After the first year, an apprentice aged 19 or over moves to the normal minimum wage for their age: £10.85 an hour at 18 to 20 and £12.71 at 21 and over. There is a second saving on National Insurance: for an apprentice under 25 (category H) the employer pays 0% on earnings up to £967 a week, or £4,189 a month, and 15% only above that.

Does this apply across the UK?

No, the hiring payment is an England scheme.

Apprenticeships.gov.uk and the funding rules cover apprenticeships in England. Scotland, Wales and Northern Ireland run their own systems with their own employer support, amounts and conditions.

What should an employer do this week?

Check the apprenticeship service account and line up a training provider before the person starts.

The order is: choose the apprenticeship standard for the role, find a training provider, create or check your apprenticeship service account and attach the correct PAYE scheme, advertise the vacancy, then sign the apprenticeship agreement and training plan. The detail that most often costs employers the payment: the person must not have been on your books for more than 90 days before the practical period starts, so turning a long-standing employee into a "new apprentice" for the £2,000 does not work.

The government frames the payment as part of the £2.5 billion Youth Guarantee, which promises almost a million opportunities for young people including 50,000 extra youth apprenticeships, plus £100 million over two years to extend apprenticeship brokerage to every mayoral area in England. The Federation of Small Businesses, which campaigned for the incentive to return, called the combined package worth up to £8,000 per apprentice.

Related: grants, loans and state support for business, right to work checks from 1 October and registering a company in the UK.