£2,000 hiring payment opens for non-levy employers taking on apprentices aged 16 to 24

Employers that do not pay the apprenticeship levy will receive £2,000 for every new young apprentice they take on, under a hiring payment announced by the Department for Work and Pensions (DWP) on 1 October 2026.

The announcement has been circulated to the hire sector by HAE EHA, the Birmingham-based trade association for plant, tool, equipment and event hire, which says it has more than 700 member companies.

Who qualifies

According to the DWP, the payment is for non-levy paying employers, which it describes as typically small and medium-sized businesses. The apprentice must be aged 16 to 24 at the start of their training, or 15 if their 16th birthday falls between the last Friday of June and 31 August.

The apprentice must also have started their job with the employer no more than 90 days before beginning their apprenticeship training.

Government apprenticeship funding guidance confirms a hiring payment of up to £2,000 for employers who do not pay the levy.

The DWP said the money can be spent on any costs related to the apprentice's employment, giving work equipment, travel costs and uniform as examples.

How it is paid

Employers do not need to apply. The DWP said eligible apprentices will be identified as they start training, and the payment will be sent to the apprenticeship training provider to pass on.

It comes in two instalments of £1,000. The first is due 90 days after the apprenticeship starts and the second after one year. The department's release gives an earlier second payment point of 242 days, which it describes in one place as applying to shorter apprenticeships and foundation apprenticeships, and in its eligibility notes as applying to foundation apprenticeships.

Training providers must pay the employer within 30 working days of receiving the money from government. Each instalment is paid only if the apprentice is still employed by that employer when it falls due.

What sits alongside it

The funding guidance separately states that government will fund all apprenticeship training and assessment costs, up to the funding band maximum, where the apprentice is aged 16 to 24 at the start of training, for employers that do not pay the levy or have used up their levy funds.

The measure is backed by the Federation of Small Businesses (FSB). Craig Beaumont, Executive Director of the FSB, said: "FSB campaigned for the return of a meaningful apprenticeship hiring incentive and we are pleased to see this come into effect."

Beaumont added that the payment can be combined with other support worth up to £6,000, which he said could form a package of up to £8,000 per apprentice.

The DWP also said a refreshed apprenticeships.gov.uk website will let employers calculate the funding support they are eligible for and read about other businesses' experiences of apprenticeships.

Brokerage pilot expanded

Alongside the payment, the Apprenticeship Brokerage pilot is being extended to all existing Mayors within a Strategic Authority across England. The DWP said the expansion is backed by £100 million of additional funding over two years and doubles the number of areas covered.

Background

The government said on 22 June 2026 that the payment would be offered from the autumn. At that point it set out an ambition for 50,000 more apprenticeship starts for young people by 2029, which it said would reverse nearly half of a 40% fall in starts among 16 to 24 year olds over the past decade.

The 1 October release does not give a date for that figure. It says the measures are backed by an additional £2.5 billion investment in the Youth Guarantee and the Growth and Skills Levy, intended to deliver almost one million opportunities including 50,000 more youth apprenticeships.

Work and Pensions Secretary Pat McFadden said: "We promised 50,000 more youth apprenticeships, and we’re delivering on that promise, one hire at a time."

For smaller construction and hire businesses outside the levy, the practical point is that the payment arrives automatically through the training provider, provided the apprentice remains in post at each payment date.