Training

Training provided within a training contract

A training contract is where the main purpose of the arrangement is to train you rather than for you to provide services to an employer. In these cases, payments you receive and the cost of the training are usually not taxable as set out on GOV.UK. For more on this see below: Contracts of training and contracts of service. 

This may be different to contracts used in certain professional settings, like legal training contracts for solicitors or accountants, where there is also an element of service. Under such a professional training contract, you will usually be an employee and your earnings from employment will be taxable as usual. You can read more about this on GOV.UK.

Under a professional training contract, your employer may pay for you to attend certain training courses so that you can perform your job better. The full costs of this training that are paid for by your employer, including any accompanying books, travel and so on, will be tax-free to you. 

The tax-free nature of these payments includes the costs borne by your employer as regards work-related training within the whole range of practical or theoretical skills and competencies you are reasonably likely to need in your present or future jobs with your employer. It does not matter whether your employer bears the costs directly or instead you pay the costs and your employer then reimburses you.

The exemption extends to:

• training activities such as first aid and health and safety in the workplace,
• employee development schemes,
• activities intended to develop skills you need in leadership, and
• any training which is provided by a third party rather than your employer, but it does need to be relevant to your present or future jobs with your employer.

All the ways in which training can be delivered are covered including full-time and part-time training, internal training courses run by your employer, courses which are run externally or by a third party, and courses which comprise any mixture of these.

The tax exemption also covers:

• travel and subsistence expenses, to the same extent as if you were undertaking employment duties while training,
• other incidental costs, such as additional childcare expenses directly related to your undertaking the training in question,
• costs which relate to examinations and registration of qualifications, and
• costs of multi-media and distance learning aids, practical course materials and books.

Training, or training-related travel and subsistence, which is provided as entertainment, recreation, reward or an inducement, remains taxable.

Any asset, for example IT equipment, provided to you or for your use is also taxable unless the asset is provided or used purely for training, or for training coupled only with use in the performance of your employment.

Assets provided to you by your employer for your private use remain taxable in the normal way.

More details of the work-related training exemption can be found in HMRC’s manual. 

Specific work-related training

Even where you are not on a formal training contract, if your employer pays for you to attend specific training – assuming this is work-related training - there will be no tax liability on you. When determining whether the training is work-related training, the considerations set out in the section directly above will apply. 

The training can also be for help with participating in charitable or voluntary activities arising through the employment. However, if the training is not work-related, you will be taxed on that cost. So, if, for example, your employer paid you to obtain cookery lessons, but you normally work as a mechanic, you should expect to pay some tax. 

This exemption does not give employees tax relief for the costs of self-financed training where the cost of the training is not reimbursed by the employer. 

More guidance on the tax consequences of training provision is contained in booklet 480 (although aimed at employers, it is also useful for employees). You may also find it useful to read our page employment expenses.

Tax status of payments received while training

If you are working under a contract of service (employment), normally when your employer sends you on training courses, you will continue to pay tax and National Insurance contributions (NIC) on the wages you are being paid while you attend. This would be the case if, for example, you are studying towards a qualification and working at the same time, or perhaps going on ‘day release’ or short-term courses.

Occasionally, any money or support you are given might not be taxable, for example if you are under a contract of training rather than a contract of service. 

There are also special rules that relate to apprenticeships and certain scholarships. We look at each of these below.

Contracts of training and contracts of service

In order to identify if you are engaged on a contract of training or contract of service (or both), the key question to ask is: are you carrying out tasks for the employer or are you merely seeing how a job is done – except perhaps for some minor actions you undertake along the way?

If you are under a contract of training, then there should be no tax or National Insurance due on payments such as a grant, sponsorship or payment of expenses. There is no legal definition of what is meant by a contract of training, though typically it would be expected that:  

• trainees give minor assistance in the work,
• trainees are not learning a trade, so they are not an ‘apprentice’,
• trainees are not doing work for an employer under a ‘contract of service’,
• trainees are trained both generally and to see how the job is done.

A contract of training is different to a contract of service. If you are on a contract of service, you are performing work tasks for the employer. You are therefore an employee and should be paying tax and National Insurance on any payments received.

Apprentices

If you are an apprentice, you will be engaged on both a contract of training and a contract of service. This means you are working and training at the same time as undergoing training. This can apply to a broad range of jobs, such as apprentice electricians and other trades, to professional services roles such as trainee solicitors and accountants. 

These special types of contracts are called apprenticeship contracts and are specifically taxable as employment income, as set out on GOV.UK. You can read more about tax for apprentices on our page apprentices.

The Contracts of Training and Apprenticeship flowchart on GOV.UK might help you decide if your contract is one for training, service or apprenticeship.

If you are enrolled in a different kind of government training scheme, it should normally be clear whether you have employee (contract of service) or trainee (contract of training) status:

• If you are an employee, you will generally have a direct contract with the person to whom you provide your services.
• Trainees will generally have a contract with the scheme organiser, which may involve work experience or training with a work provider. It will usually be clear from your contract and the surrounding circumstances that the primary purpose is to train you, although you might incidentally do some productive work for your work provider.

In practice, most people who carry out regular duties for an organisation will be treated as employees for tax purposes, even if their role includes significant training.

Scholarships

There are special rules that might apply if you are an employee and you are released for full time study at a university, technical college or similar educational establishment.

Under these rules, your employer may be able to make payments to you free of tax and National Insurance. Your employer would be making such payments to support you while you are studying full-time, not for when you are working at your job.

To qualify for the exemption, you must:

• be studying full-time at a university, technical college or similar educational establishment, which is generally open to the public and offers more than one course (so an employer's in-house training would not qualify),
• be enrolled for at least one academic year, and
• attend the course for at least 20 weeks in that academic year or, if the course is longer, you must attend for at least an average of 20 weeks in an academic year.

If all of these conditions are met and your study continues, your employer may pay you up to £15,480 tax and National Insurance free for the 2026/27 academic year, that is, from 1 September 2026.

The £15,480 total includes accommodation, living and travel costs, but tuition fees do not count towards the limit. Tuition fees are separately exempt as long as the course is ‘work-related training’ (see earlier guidance).

The exemption only covers periods when you are away from work studying. However, if you go back to work, for example, during vacations, your earnings for those periods will be taxed and have National Insurance deducted as usual.

You also need to be careful because the exemption may be lost entirely if your employer paid you at a rate higher than £15,480 for the year. If the rate changes during the year to a rate higher than £15,480, then sums paid prior to the change that were within the limit should still count towards the exemption, but all amounts paid once the rate was increased could be liable to both income tax and National Insurance.

You can read more about the tax and National Insurance exemption for scholarship income on GOV.UK.

If you come under this exemption, your entitlement to state benefits could be affected because while you are not paying National Insurance, you are not building up a contribution record. Our page National Insurance provides more information.

More information

HMRC’s Employment Manual provides detailed information on all the different considerations around training costs, including scholarships.

For minimum wage purposes, there’s no references to ‘trainees’ – you are either a worker and due the relevant minimum wage rate, or not. Further guidance can be found on GOV.UK.