If you’re hiring apprentices under 25, you could significantly reduce your employment costs and save on National Insurance. Since April 6, 2016, employers may not need to pay Class 1 National Insurance contributions (NICs) for eligible apprentices, offering savings of up to £2,287.49 per apprentice each year.
Who Qualifies?
You may be exempt from paying employer NICs if your apprentice:
- Is under 25 years old
- Is enrolled in an approved UK government apprenticeship standard
- Earns less than £967 per week (£50,270 per year)
What You Need to Claim to save on national insurance
To qualify, you must have either:
- A written agreement with the apprentice and training provider that includes:
- The apprenticeship standard
- Start and expected end dates
OR
- Evidence of government funding (in England and Wales), such as:
- A declaration of receiving an apprenticeship incentive payment
- A payment schedule showing employer contributions to the provider
How to Set Up Payroll Correctly
Use the correct National Insurance category letter:
- H: For apprentices under 25 on a government-approved apprenticeship
If the apprentice turns 25 or the apprenticeship ends, you must update the category letter accordingly.
Key Points to Remember to save on national insurance
- This NICs relief is for employers only. Employees still pay their usual contributions.
- The relief applies only to earnings up to £967 per week.
- Maintain accurate records to support your claim.
Why It Matters
Hiring young apprentices isn’t just a smart investment in talent, it’s a smart financial move. Take advantage of this National Insurance relief, save on National Insurance and keep your business costs down while helping the next generation build their careers.
For full details, visit the official guidance on GOV.UK. You can also contact the Avant Skills Academy Engagement Team who would be happy to help you on your apprenticeship journey. Send us a message here: https://avant.ac.uk/contact-us/