Configure the Apprenticeship Levy

The government apprenticeship levy is a tax paid by employers. It is then stored in a fund which can be accessed to help pay for apprenticeship training costs.

For further information, check HMRC guidance for pay apprenticeship levy.

To configure the apprenticeship levy, watch our video or follow the steps in the table below in portal.

📌Note: We advise you follow the actions in order.

Action	Steps
Review the company parameters	Click Settings, then click General. Click Other. From the Select Detail drop-down list, select Apprentice Levy. From the Year drop-down list, select a relevant year. From the Select drop-down list, select Company Parameters. For each company in your organisation, set the Apprentice Levy Threshold and Apprentice Levy Pay Code. Override apprentice levy rates: This is a rate different from the system level rate to be used at a company level. For the 2023/24 tax year, this can be left null. Apprentice levy thresholds: This is the threshold that you wish to allocate to that individual company. This is a manual process. In the case of connected companies, you may have to split the threshold. Once you decide how you wish to allocate the threshold, update these fields. Apprentice levy pay code: This is an apprentice levy output pay code set as null by default. If populated with a pay code, the system will cost the apprentice levy during the payroll validation task and output against this pay code. There is no statutory basis on which to calculate the apprentice levy at an employee level. If you decide to enable this option, you need to review the sections below. Note: If populated with a pay code, the system applies the apprentice levy at an employee level during each pay run and outputs against this pay code.
Review GL matrix	If you intend to payroll the apprentice levy at employee level, review and update your GL matrix. The set up you require differs depending on the classification that you use in your matrix. Read more > To review your GL matrix, follow the steps below. From the dashboard menu, click Payroll Dashboard. Click Settings then click General Rules & Settings.
Set up a new analysis code or type for apprentice levy	Click Settings, then click Analysis Codes. Add a new analysis code. You can use any free analysis code. For example, 6200. Record the analysis type on the new apprentice levy analysis code as AL. Click Save.
Set up a new pay code for apprentice levy	Click Settings, then click Pay Codes. Search for the Employer NI pay code. From the three dot menu, click Clone. Enter a new pay code and add a relevant description. Tip: Use a pay code number that is free. Click OK. From the three dot menu, click Edit. Update the analysis code to the Apprentice Levy code set up in the previous step. Click Next twice then click Save. To ensure the following options on the new apprentice levy pay code are correctly set up, follow the steps below: Click Settings, then click Pay Codes. Click Rules and review the following toggles: Do not turn on the Inland Revenue pay path toggle for this apprentice NI pay code. Do not mark the Apprentice levy pay code toggle as an RTI statutory payment.
Record the new pay code for apprentice levy against the relevant company	Note: You only need to do this if you want the apprentice levy to cost per employee in the payroll run. Click Settings, then click General. Click Other. From the Select Detail list, click Apprentice Levy. From the Year list, select a relevant year. From the Select list, select Company Parameters.
Update the company costing elements for apprentice levy	Click Settings, then click General Settings. From the Company Code drop-down list, select a relevant company. Click Next Page twice. In the Apprentice Levy section, enter the following: Cost centre Location Expense Project To ensure that no apprentice levy calculation is performed for this company, enable the Exclude From Apprentice Levy toggle. Click Save.
Exclude pay groups from apprentice levy	Click Settings, then click General. Click Other. From the Select Detail drop-down list, select Apprentice Levy. From the Select drop-down list, select Pay Group Parameters. Enable the Exclude toggle. Click Save.
Exclude an employee from apprentice levy	Click Settings, then click General. Click Other. From the Select Detail list, select Apprentice Levy. From the Select list, select Employee Parameters. Turn on the Exclude App Levy toggle. Click Save.
Include BIK pay codes for apprentice levy	Click Settings, then click General. Click Other. From the Select Detail list, select Apprentice Levy. From the Select list, select Include BIK Pay Codes for Apprentice Levy. Turn on the Include App Levy toggle. Click Save. Note: The apprentice levy due is calculated on total employee earnings subject to class one secondary national insurance contributions (NICs), including earnings below the lower earnings limit.

Other articles you may find useful in relation to UK Legislation:

Validation Job (PAY140) failed

EPS Apprenticeship Levy figures looks incorrect

Configure payslip parameters

Configure manual rate changes for year end

Review system configuration

Action

Steps