What's covered in this guide?
Apprenticeship Levy
The Apprenticeship Levy is a UK employment tax that applies to employers with an annual pay bill over £3 million. You can use Workforce to calculate and track your Apprenticeship Levy obligations throughout the tax year.
Set up the Apprenticeship Levy
To enable Apprenticeship Levy calculations:
Go to Payroll > Payroll Settings.
Select HMRC Levy & Employment Allowances.
Select the Apprenticeship Levy tab.
Click + Create a new Apprenticeship Levy.
Complete the levy details:
Annual Allowance – Enter the Apprenticeship Levy allowance allocated to this PAYE scheme for the tax year. The maximum allowance is £15,000.
Pay Bill Opening Balance – Enter the total NI-able pay bill already reported to HMRC for the current tax year before you create the Apprenticeship Levy record.
Reported Levy Opening Balance – Enter the year-to-date Apprenticeship Levy amount already reported to HMRC through an Employer Payment Summary (EPS) for the current tax year.
Click Create.
📝 Important to note:
If your account contains only one company file, Workforce automatically selects it for you.
If you operate multiple PAYE schemes or are part of a connected group of companies, enter only the allowance allocated to the selected PAYE scheme.
If you create an Apprenticeship Levy record after the start of the tax year, ensure the opening balance fields reflect the amounts already reported to HMRC. This helps Workforce calculate your levy accurately for the remainder of the tax year.
You can only create one Apprenticeship Levy record per payroll integration for each tax year.
How the Apprenticeship Levy is calculated
After you post a pay run, the system calculates your levy based on eligible earnings across all payslips.
The calculation excludes:
Employees under 16 years old on the payment date.
Earnings that do not attract Class 1 secondary National Insurance contributions.
Class 1A Benefits in Kind, such as company cars.
The system calculates:
Your year-to-date pay bill.
Your gross levy amount at 0.5%.
Your pro-rated annual allowance.
Your year-to-date levy due.
The annual allowance applies progressively throughout the tax year.
Example
Calculation | Amount |
Year-to-date pay bill | £4,000,000 |
Gross levy (0.5%) | £20,000 |
Pro-rated allowance | £1,250 |
Levy due year-to-date | £18,750 |
Previously reported levy | £0 |
Amount payable | £18,750 |
📝 Important to note: The system reports levy amounts in whole pounds and rounds them down to the nearest pound.
📝 Important to note: The levy amount cannot fall below zero.
Review levy amounts after a pay run
After you post a pay run, the system:
Records the pay bill for the period.
Updates your year-to-date levy figures.
Recalculates levy amounts if you revert a pay run.
Submit an EPS
If you have a levy amount due, a reminder card appears on the payroll dashboard.
Your EPS includes:
Levy Due YTD
Tax Month
Annual Allowance
🚨 Important: Workforce does not submit your EPS to HMRC. You must submit the EPS yourself when required.
View levy amounts in the P32 report
You can view Apprenticeship Levy information in the P32 Report.
The report includes:
Levy Due in Tax Month - the amount due for the tax month.
Levy Year to Date - the cumulative levy amount for the tax year.
💡 Tip: Review your P32 report before you submit your EPS to confirm your levy figures.
Edit an Apprenticeship Levy record
To update an Apprenticeship Levy record:
Go to Payroll Settings.
Select HMRC Levy & Employment Allowances.
Select the Apprenticeship Levy tab.
Click Edit to open the existing record.
Update the required values.
Click Save.
You can update:
Annual Allowance
Opening Pay Bill (YTD)
Opening Levy Reported (YTD)
📝 Important to note: Changes to your allowance or opening balances may affect year-to-date calculations for earlier pay runs in the same tax year.
FAQs
Why can't I create an Apprenticeship Levy record?
Why can't I create an Apprenticeship Levy record?
You can only create one Apprenticeship Levy record per payroll integration for each tax year. If a record already exists, edit the existing record instead.
Can I enable the Apprenticeship Levy after the start of the tax year?
Can I enable the Apprenticeship Levy after the start of the tax year?
Yes. If you enable the levy during the tax year, Workforce attempts to calculate your opening pay bill from previously posted pay runs. You can review and update the calculated value before saving.
Why doesn't my Apprenticeship Levy amount match 0.5% of my pay bill?
Why doesn't my Apprenticeship Levy amount match 0.5% of my pay bill?
The levy calculation includes your annual allowance, which reduces the amount due throughout the tax year. The system also reports levy amounts in whole pounds and rounds them down to the nearest pound.
Can the Apprenticeship Levy amount be negative?
Can the Apprenticeship Levy amount be negative?
No. If your annual allowance exceeds the levy due, the system reports the levy amount as £0.
What happens if I revert a pay run?
What happens if I revert a pay run?
The system removes the levy record associated with that pay run and recalculates your year-to-date levy values.
Can I change my annual allowance after I create a levy record?
Can I change my annual allowance after I create a levy record?
Yes. You can edit the levy record and update your annual allowance at any time. Changes may affect year-to-date levy calculations for earlier pay runs in the same tax year.
Does Workforce submit the EPS to HMRC?
Does Workforce submit the EPS to HMRC?
No. Workforce calculates and tracks your Apprenticeship Levy figures, but you must submit the Employer Payment Summary (EPS) to HMRC yourself.
Where can I view Apprenticeship Levy amounts?
Where can I view Apprenticeship Levy amounts?
You can view Apprenticeship Levy amounts in the P32 Report and on the payroll dashboard when an EPS reminder appears.