The short version
- Non-levy employers pay £0 for an AI apprentice aged 16 to 24.
- For apprentices aged 25 and over, non-levy employers pay 5%: £900 on the £18,000 funding band.
- Take on someone new aged 16 to 24 and you can also get a £2,000 hiring payment. You don't apply for it.
- Funding covers training, not wages. The apprentice is paid by you.
The short answer
An AI apprenticeship is government-funded. What you pay depends on two things: whether you pay the Apprenticeship Levy, and how old your apprentice is when they start.
The Level 4 AI & Automation Practitioner apprenticeship (standard ST1512) sits in the £18,000 funding band. That's the most the government will put towards training one apprentice on this programme.
Do you pay the Apprenticeship Levy?
Probably not. The levy, now called the Growth and Skills Levy, is only paid by employers with a total pay bill over £3 million a year. Most small and medium businesses, charities and care providers are non-levy employers.
If you're not sure, ask whoever runs your payroll. It shows up as a line on your monthly PAYE return.
What you pay, by situation
| Your situation | Training cost to you | Extra payment |
|---|---|---|
| Non-levy employer, new apprentice aged 16 to 24 | £0 | +£2,000 |
| Non-levy employer, existing staff member aged 16 to 24 | £0 | None |
| Non-levy employer, apprentice aged 25 or over | £900 (5%) | None |
| Levy payer with funds in your account | Paid from your levy | None |
| Levy payer whose funds have run out | 25% co-investment for apprentices 25+ (under-25s fully funded) | None |
The apprentice never pays anything for their training. Want your own figure? Use the 60-second cost check on our AI apprenticeship page.
The £2,000 apprenticeship hiring payment
From 1 October 2026, non-levy employers can get £2,000 for taking on a young apprentice. It's designed to help small businesses hire, so it's aimed at new starters rather than existing staff.
According to the GOV.UK apprenticeship service, you qualify if:
- you're a non-levy employer
- the apprentice is aged 16 to 24
- their training starts on or after 1 October 2026
- they started working for you no more than 90 days before their training began
- they're still on the apprenticeship when each payment is due
You don't apply for it. Eligibility is checked automatically through HMRC once your training provider reports 90 days in learning. The provider receives the payment and must pass it on to you within 30 days. The earliest payments to providers are from January 2027. Your PAYE scheme needs to be linked to the apprentice in your apprenticeship service account, which your provider will help with.
Other payments you might get
The Growth and Skills Levy factsheet lists an extra £1,000 for any employer, levy or not, who takes on an apprentice aged 16 to 18, or someone under 25 with an Education, Health and Care plan or who has been in care. It's paid in two instalments. You can claim more than one of these payments for the same apprentice.
What funding doesn't cover
Wages
Apprentices are employees, so you pay them. If you're upskilling someone already on your team, their pay doesn't change. For new hires, the apprentice minimum wage is £8 an hour from April 2026 for apprentices under 19 or in their first year. Most employers pay more, especially for a Level 4 role.
Time
Apprentices spend part of their working week on training and their workplace project. This is agreed with you upfront and planned around your rota or workload, so there are no surprises.
Three worked examples
A 12-person accountancy firm upskills its 31-year-old office manager
Non-levy, apprentice over 25. The firm pays £900 in total. The office manager keeps their salary and automates the month-end reporting as their workplace project.
A children's home hires a 20-year-old admin apprentice
Non-levy, new starter aged 16 to 24. Training is free and the home gets £2,000 through its provider. If the apprentice has been in care themselves, an extra £1,000 may apply. See our AI apprenticeship for care providers.
A 400-person logistics company trains two analysts
Levy payer. Training comes out of the levy account the company is already paying into, so there's no new spend.
Not sure which one you are? Answer three questions and we'll tell you your exact cost. Check your cost →
How to get started
- Check your cost. Use the eligibility check or the time-savings calculator.
- Pick your person. Someone already on your team who's been asked to make things run more efficiently, or a new hire.
- Your provider does the paperwork. We set up the apprenticeship service account with you and handle the funding claim.
- Start. Our next group starts on Monday 2 November 2026.
Still weighing up whether an apprenticeship is right, or whether a short course would do? Read AI apprenticeship or short AI course?
Quick answers
Is an AI apprenticeship free for employers?
For non-levy employers, yes, when the apprentice is aged 16 to 24. For apprentices aged 25 and over, non-levy employers pay 5% of the £18,000 funding band, which is £900. Levy payers use their levy funds.
Who gets the £2,000 apprenticeship hiring payment?
Non-levy employers who take on an apprentice aged 16 to 24 whose training starts on or after 1 October 2026, and who joined the employer no more than 90 days before training started. There's no application. It's paid through the training provider after the 90-day check.
Can I get the £2,000 for an existing employee?
Only if they joined you no more than 90 days before their apprenticeship training started. Longer-serving staff aged 16 to 24 still get free training, but not the hiring payment.
Do I have to pay the apprentice's wages?
Yes. Apprentices are employees. Existing staff keep their current pay. New apprentices must be paid at least the apprentice minimum wage, which is £8 an hour from April 2026 for those under 19 or in their first year.
Keep reading
Last updated . Funding rules are for England and can change. We check them against GOV.UK before every update. This guide is general information, not financial or legal advice.