How to Budget for the Apprenticeship Levy


The apprenticeship levy has been talked about for what seems like an eternity.

It is now almost upon us and we have to budget for it accordingly.

The levy comes into effect in April 2017 and will see a 0.5% charge on your annual pay bill.  You will only pay the levy if your pay bill exceeds £3 million in a given year as each employer will have an annual levy allowance of £15,000 to offset the charge (£3,000,000 x 0.5% = £15,000).

So how do you budget for the levy?

  • In your budget planning software, be sure to access your most up to date budget scenario.
  • Review a staffing summary. For those of you using SBS Online there are a multitude of ways to access this, I recommend the ‘Staff by Year Report’. Press the subtotal button and scroll to the bottom. You will see an overall totals row.
  • If the total basic pay + total superannuation is less than £3,000,000 you need take no further action.
  • If it is greater than £3,000,000, deduct £3,000,0000 and multiply by 0.5%. Note the amount.
  • Repeat the process for each year of the budget.
  • Maintained schools should process the calculated amounts for each year starting April 2017. In SBS Online I recommend this be reflected using a ‘Budget Entry’.
  • Academies should process the calculated amounts for year 2 onward, but for the current (first) year divide the amount by 12 and multiply by 5 to reflect the period from April to August only. Again using a ‘Budget Entry’ if using SBS Online.
  • For Multi Academy Trusts, be sure to run consolidated costing reports for the trust as a whole. The individual academies within the trust need not worry if the trust reflects this as a whole. If this is the case and you are using SBS Online, use the ‘Staff by Year Report’ within the ‘Multi-School’ module.

For full details of the Apprenticeship levy, including how you go about accessing funds allocated to apprentices, click here

There are of course more definitive ways to calculate a monthly amount in SBS Online. If this is of interest we will be only too happy to help. Contact your Service Desk on 0345 222 1551.

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