Eligible employers that do not pay the apprenticeship levy can now receive a £2,000 hiring payment when they take on a new apprentice aged 16 to 24. The payment applies to apprenticeship training starting on or after 1 October 2026 and is intended to ease some of the practical costs of bringing a young person into work.
The measure is aimed at non-levy-paying employers, many of which are small or medium-sized firms, but size alone does not decide eligibility. A business that pays the levy is outside this particular payment, while a non-levy employer must meet the full set of conditions for each apprentice.
Who is covered by the payment
The apprentice must be 16 to 24 when their training begins. There is also a limited provision for a 15-year-old whose 16th birthday falls between the last Friday in June and 31 August. Their apprenticeship agreement must show a practical-period start date from 1 October onwards.
There is an employment-timing test as well. The young person must not have worked for the employer for more than 90 days before the practical period begins. A transitional exception covers people whose employment began on 1 or 2 July, provided their apprenticeship training starts by 1 October.
Employers also need the apprentice to be recorded against the correct PAYE scheme in the apprenticeship service account used to fund the training. The information is checked against employment data. Where that match does not support eligibility, the payment will not be generated.
Two stages rather than an upfront grant
The £2,000 is not paid when the vacancy is filled. It is split into two equal £1,000 instalments and passes through the training provider rather than requiring an employer to make a separate claim. The first half becomes due after 90 days of learning, provided the apprentice is still employed and continuing their apprenticeship.
The remaining half is due after 365 days on programme on the same basis. For a shorter apprenticeship, or a foundation apprenticeship, the second instalment can instead be generated after 242 days. Providers must pass funding received to the employer in full within 30 working days. That structure means a firm should not treat the headline sum as immediate cashflow at the start of a placement.
What the payment can support
The support is designed for costs connected with employing the apprentice, such as equipment, travel or uniform. It sits alongside the separate funding arrangements for training and assessment. For a qualifying non-levy employer hiring someone under 25, those arrangements can cover the full training and assessment cost up to the relevant funding-band maximum.
The hiring payment is also separate from other targeted support. Employers should therefore check the conditions of each scheme independently instead of assuming that a payment available for one type of apprentice will automatically apply to another. In particular, the £2,000 payment does not remove the need to keep employment and training records accurate throughout the apprenticeship.
A live milestone for autumn recruitment
The 1 October start makes the payment relevant to firms planning autumn recruitment, including London businesses looking for a route into skilled roles without carrying the whole initial cost alone. It does not guarantee funding for every new recruit: levy status, age, start date, prior employment and data matching all matter.
For young people, the change may make an apprenticeship vacancy more affordable for an employer to offer. Whether it results in more opportunities will depend on recruitment decisions over the coming months. The first instalments, however, can only follow the initial 90-day learning period, so the practical effect on employers’ budgets will emerge over time rather than on day one.
