The New £2,000 Apprenticeship Hiring Payment: What Small Employers Need to Know

Thinking of taking on a young apprentice? From 1st October 2026, smaller employers can get up to £2,000 for each new apprentice aged 16 to 24. You do not need to apply. The payment comes to you automatically through your training provider.

This guide explains who qualifies, how the payment works and what you need to do now.

What Is the Apprenticeship Hiring Payment?

The Apprenticeship Hiring Payment is a new government incentive for non-levy employers. It pays up to £2,000 for each eligible apprentice you hire.

A non-levy employer is a business that does not pay the Apprenticeship Levy. Only employers with an annual pay bill of more than £3 million pay the levy. This means most small businesses are non-levy employers.

Who Is Eligible?

You may qualify if your apprentice:

• is aged 16 to 24
• starts their apprenticeship training on or after 1st October 2026
• started working for you no more than 90 days before their training began
• is still in learning when each payment is due

In other words, the payment is for new employees. If someone has worked for you for longer than 90 days before starting their training, they will not count.

Note: The 90-day rule has one small exception. If your apprentice started working for you on 1st or 2nd July 2026, they can still qualify as long as their training started on 1st October 2026.

How Is the Payment Made?

You receive the payment in two equal instalments of £1,000:

• First instalment: after the apprentice has been in learning for 90 days
• Second instalment: after 365 days in learning (or 242 days if the apprenticeship lasts less than 12 months)

The government pays the money to your training provider as part of their monthly payments. Your provider must then pass it on to you within 30 days. The earliest payments to providers will start in January 2027.

How Do the Checks Work?

HMRC checks that the apprentice still works for you before each instalment. It does this at day 90 and again at day 365 (or day 242).

If the first check cannot confirm the apprentice’s employment, HMRC tries three more times, 30 days apart. If none of these checks succeed, you will not receive the payment.

What You Need to Do Now

You do not need to apply for the hiring payment. But you can avoid delays by checking one thing.

Log in to your apprenticeship service account. Check that you have linked the correct PAYE scheme to your apprentice’s National Insurance number. If these details do not match, HMRC’s checks may fail.

Other Support for Hiring Young Apprentices

The hiring payment is not the only help available. Depending on your apprentice’s age and your circumstances, you may also get:

• £1,000 additional payment for apprentices aged 16 to 18 (or under 25 with an EHC plan or care leavers)
• No employer National Insurance contributions for apprentices under 25
• 100% of training costs covered for eligible apprentices under 25 at non-levy employers

In total, you could receive up to £8,000 in extra payments when you hire a young person. The government’s financial support to hire a young person guide explains each payment.

For the most current information, always check the official guidance on the Apprenticeship Hiring Payment for non-levy employers.

When Getting Advice Can Help

Taking on an apprentice means setting up payroll, checking incentives and keeping your records in order. You are not expected to be an expert, and getting professional advice can be very helpful.

If you would like calm, practical support, Penney’s Accountancy works with UK small businesses in and around Farnborough and the surrounding areas. We can help you add your apprentice to payroll, check your PAYE details and make sure you receive every payment you are entitled to.

Want to Learn More in Your Own Time?

For those who want to build their confidence and understand these topics in more detail, Penney’s Finance School offers an online, self-paced business and finance course. It covers everything from company setup to cash flow and tax, allowing you to learn at your own pace.

Important information

The information provided in this article is intended as general guidance for UK businesses only and reflects UK tax legislation and HMRC guidance as of October 2026.

Tax rules and business requirements can change, and individual circumstances vary. Before acting on any of the information above, we recommend speaking to a qualified accountant who can provide advice tailored to your specific situation.