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From 6 January 2024, the main rate of class 1 National Insurance contributions (NIC) deducted from employees’ wages is reduced from 12% to 10%. From 6 April 2024, the main rate of self-employed class 4 NIC will reduce from 9% to 8% and class 2 NIC will no longer be due. Those with profits below £6,725 a year can continue to pay class 2 NIC to keep their entitlement to certain state benefits. Our guidance will be updated in full in spring 2024.

Updated on 6 April 2023

Apprentices

The traditional view of an apprentice might be a young person learning alongside an experienced tradesman, for example a plumber in the construction industry. However, nowadays, apprenticeships can offer a gateway into a variety of careers. Here we look at apprenticeships, pay and tax in more detail.

Content on this page:

Introduction

Apprenticeships are government-funded work-based training programmes for people aged 16 and over. They combine on the job training with nationally recognised qualifications. They are about equipping individuals with the new skills and learning they need for their job roles and for future employment and progression.

Apprenticeships come in different levels from intermediate and advanced to degree level and last a minimum of 12 months, but depending on the qualification they may take longer.

There are lots of different subjects available to choose from sector specific apprenticeships like dental or childcare to ones in customer service and business administration.

Apprenticeships are a popular choice for young people but are actually open to all ages.

For information on apprenticeships if you are disabled, see below.

Apprentices and pay

Apprentices must be paid at least the apprentice national minimum wage for all the time they are on their apprenticeships.

Apprentices who are under 19, or who are 19 or over and in the first year of their apprenticeship, will be paid a minimum of £5.28 per hour (from 1 April 2023), but many businesses pay more. Individuals not falling into these categories should be paid the usual national minimum wage/national living wage rate for their age band.

The appropriate minimum wage rate should be paid for time working plus the time spent training both on and off the job. This includes time spent at college/or off site with a provider.

For detailed information on the national minimum wage including the rates, how it should be calculated, how the accommodation offset works and how things like travelling time, tips and uniform deductions should be dealt with, please see our page National minimum wage.

If you are not paid on an hourly basis, for example you are paid an annual salary, then GOV.UK contains information about how to work out if minimum wage is being paid.

Sadly, some businesses do not fully understand how minimum wage rates work so some apprentices are not always paid what they are legally due. You should speak to your boss or call the ACAS Pay and Work Rights Helpline if you think you are not being paid correctly.

Apprentice terms and conditions

Most apprentices are employed and therefore have the same rights as other employees, including the right to be enrolled into a workplace pension if they meet the conditions (auto-enrolment). To find out more about your rights as an employee go to GOV.UK.

Some things to note though are:

  • The minimum hours of employment for an apprentice should be at least 30 hours per week. By exception, where the individual’s circumstances or the particular nature of employment in a given sector makes this impossible, then an absolute minimum of 16 hours must be met. In such cases the duration of the apprenticeship should be extended.
  • Apprentices are also entitled to holidays which you can find out more about on GOV.UK.
  • Many of the special protections in the Working Time regulations for young workers under 18 will apply to apprentices, for example young workers must not exceed the eight hours a day or 40 hours per week. They are also entitled to rest breaks of at least 30 minutes if their shift lasts more than four and half hours.

You can contact the ACAS Pay and Work Rights Helpline for free and confidential advice on your rights at work.

Tax implications

There is a common misconception that apprentices do not have to pay tax. This is not the case. Apprentices have to pay income tax in the same way as everyone else. Some general tax guidance for first time workers, which apprentices may find useful, can be found on our page Starting work as an employee.

For the 2023/24 tax year, if you earn less than the personal allowance (£12,570) you should not ultimately be taxed at all, but you may pay National Insurance contributions (see below). Earnings over the personal allowance will be taxed at the appropriate income tax rate.

You will normally pay tax through the Pay as you earn (PAYE) system – meaning that it is taken straight from your pay packet. You will therefore not normally need to worry about completing a self assessment tax return.

You can find out more about tax rates and allowances, how the PAYE system for employees works, how tax is paid and how to claim back tax if you think you have paid too much, in the Tax and NIC section.

National Insurance contributions

For the 2023/24 tax year, if you earn more than the primary threshold in a particular pay period (usually weekly or monthly) you will also have to pay Class 1 National Insurance contributions (NIC).

You can find out more about this in our NIC guidance.

With regards to special rules about NIC for apprentices, you may have heard that the government cut NIC for apprentices aged under 25, since April 2016. This is true, but this only applies to employer NIC for apprentices aged under 25 and up to earnings of a certain level. This makes it cheaper for employers to take on an apprentice – hopefully meaning they will take on more. You can read more about it in this government notice.

Tax credits and universal credit

There are two types of tax credit – working tax credit (WTC) and child tax credit (CTC).

The tax credits system is gradually being replaced by universal credit (UC).

For information on apprenticeships and tax credits in our pages on tax credits.

You can claim universal credit while you are on a ‘recognised’ apprenticeship. For more information see our pages on universal credit.

Apprenticeships care leavers’ bursary

This is a bursary (payment) made to eligible apprentices who complete at least 60 days of their apprenticeship. The apprenticeship provider receives the money and then passes it on to the apprentice. In other words, the apprentice does not have to apply for it.

Broadly, to qualify for the bursary the apprentice must still be in care or have left care in the UK after their 16th birthday. Further details about eligibility are available on GOV.UK.

The bursary is not taxable and is not liable to National Insurance contributions.

Apprenticeships and disability

The government says that a disability should not be a barrier to getting an apprenticeship. Many employers offer support or equipment to help you do your job.

Access to Work

The access to work scheme is run by the Department for Work and Pensions (DWP) and gives grants to help disabled people start working or stay in work.

Apprentices fall within the scope of access to work payments and assistance.

Read our separate website guidance on access to work for more information.

Examples

Example: Rosie

Rosie was born in November 2000 and began her two-year apprenticeship on 1 September 2021. Rosie is paid per calendar month and her NMW will be as follows:

1 September 2021 - 31 March 2022 Rosie’s NMW will be £4.30 per hour.
1 April 2022 - 31 August 2022 Rosie’s NMW will be £4.81 per hour as the NMW rates changed on 1 April 2022.
1 September 2022 - 31 March 2023 Rosie’s NMW will be £9.18 per hour as she has completed the first year of her apprenticeship. As she is aged over 19, she will be paid the NMW according to her age (on 1 September 2022, Rosie will be 21 years old).
1 April 2023 – 31 August 2023 As Rosie is now 22 (she turned 22 in November 2022), she will be entitled to the rate of £10.18 as the rate changed on 1 April 2023.

Example: Seamus

Seamus started his three-year apprenticeship on 6 September 2020; he turned 17 years old on 16 May 2021. Seamus gets paid at the end of each calendar month and his NMW is as follows:

6 September 2020 - 31 March 2021 Seamus’s NMW rate was £4.15 per hour.
1 April 2021 - 31 March 2022 The NMW rate changed from 1 April 2021. Seamus’s NMW rate increased to £4.30 per hour. Even though Seamus completed his first year of his apprenticeship on 5 September 2021, he remained on the apprentice NMW rate as he was under 19 years old.
1 April 2022 - 31 March 2023 The NMW rate increased from 1 April 2022. Seamus’s NMW rate was £4.81 per hour.
1 April 2023 - 15 May 2023 The NMW increased to £5.28 per hour.
16 May 2022 Seamus’s NMW rate will change as he is now 19 and he has been on his apprenticeship for longer than one year. His new NMW rate is £7.49 per hour. The change will take effect from the beginning of the pay period after Seamus’s birthday and not from the actual date of his birthday.

More information

With regard to apprenticeships in England, there is some more information about eligibility, how long they take, the qualifications you can get and the different levels of apprenticeship on GOV.UK.

You can also find out more about English apprenticeships in the Apprentice Hub, including about the different types of apprenticeship.

Apprenticeships policy is a devolved matter, and it is for the devolved administrations of Northern Ireland, Scotland and Wales to determine how they manage their own schemes. Find out about apprenticeships in Scotland, Wales and Northern Ireland.

Disability Rights UK's 'Into Apprenticeships' is a guide for disabled people, parents and key advisers about applying for apprenticeships. 'Into Apprenticeships' deals with common questions such as how to find an apprenticeship, whether the training will be accessible and what support is available in the workplace. There are several inspiring stories written by disabled apprentices about their own experiences and the challenges they have faced. As well as taking advantage of the support on offer, the apprentices talk about the importance of their own creativity, perseverance and motivation.

The guide also contains a useful resources section listing further websites, publications and organisations which can help.

You can download the guide in PDF format for free.

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