The headlines
- Up to £2,000 for a non-levy employer taking on an apprentice aged 16 to 24, for starts from 1 October 2026.
- Paid in two instalments of £1,000: after the first 90 days on programme, then at around 365 days.
- It is for non-levy payers only, not SMEs as a category. An SME that pays the levy does not qualify.
- The prior-employment window is now 90 days (was "three months"), with a one-off exception for staff hired on 1 or 2 July 2026.
- The apprentice must be on your PAYE scheme and in your apprenticeship service account for the data to match.
The new £2,000 apprenticeship hiring payment is one of the more welcome parts of the 2026 funding changes: real cash for taking on a young apprentice, on top of training that is already fully funded for under-25s at non-levy employers. But we are fielding a lot of questions about who can actually claim it, and a few of the rules are easy to trip over. Here are the four that matter most.
First, what the payment actually is
From 1 October 2026, a non-levy-paying employer can receive up to £2,000 when it recruits a new apprentice aged 16 to 24. It is paid in two instalments of £1,000: the first once the apprentice has completed their first 90 days on programme, and the second at around 365 days, provided they are still in learning. It is separate from, and on top of, the government funding that now covers 100% of training and assessment for under-25 apprentices at non-levy employers. Now the detail.
The four details worth reading carefully
It is for non-levy payers only, not "SMEs"
This is the one that catches people out. The payment is tied to levy status, not company size. An employer with a pay bill over £3 million pays the apprenticeship levy and is not eligible, even if you think of yourself as a small or mid-sized business. Plenty of SMEs now pay the levy, so do not assume "we're small, so we qualify". Check whether you actually pay the levy first.
Age is measured at the start of the practical period
The apprentice must be 16 to 24 at the start of their practical period, which is when their apprenticeship training begins, not at some other date. It is a subtle point, but it matters, particularly early in the scheme where someone may have been employed for a while before their training starts.
The 90-day window (and the July exception)
Eligibility was originally announced as being employed up to three months before the training start date. That has been tightened to 90 days, a small but important change. There is one exception at the launch of the scheme: a young person employed on 1 or 2 July 2026 is eligible for the hiring payment as long as their training starts on 1 October 2026, even though that is a little more than 90 days earlier. It is there so the opening cohort is not caught out by the switch from months to days.
Get the PAYE and apprenticeship service account right
The payment depends on a clean data match. The new hire must be added to your PAYE scheme, and that record must be included in your apprenticeship service account. If those two do not line up, the system cannot confirm eligibility and the payment will not flow. It is an administrative step, but it is the one most likely to hold up the money.
This £2,000 apprenticeship hiring payment is not the £3,000 Youth Jobs Grant. The £3,000 is a separate DWP scheme for hiring an unemployed 18 to 24-year-old who has been on Universal Credit for six months. They have different rules, and depending on the circumstances you may be able to benefit from both. We cover it in the £3,000 Youth Jobs Grant guide.
Why it is worth the paperwork
For a non-levy employer, the combined offer from autumn 2026 is strong: fully funded training for an under-25 apprentice, plus up to £2,000 in cash for hiring them. That turns bringing in and training a young person into one of the cheapest development moves available. The obvious thing to train them in is AI, and none of our routes need a coding background to start: the AI Champion at Level 3 for an entry cohort, or the AI & Automation Practitioner at Level 4 for someone you want building real automations. If you want the full picture of the 2026 changes, our guide to the 2026/27 funding rules sets out how the pieces fit together, and the Growth & Skills Levy page explains the funding mechanics.
What to do now
- Confirm your levy status. Do you actually pay the apprenticeship levy (pay bill over £3 million)? If yes, this payment is not for you; if no, you are in scope.
- Check the dates. For the payment, the apprentice needs to start from 1 October 2026 and to have joined you within the 90-day window (or fit the 1 to 2 July exception).
- Sort the admin early. Get the hire onto PAYE and into your apprenticeship service account so the data match is clean.
- Get a funding review. We will confirm your eligibility, map the funded training options, and make sure nothing is left on the table.
Thinking of taking on a young apprentice? We will confirm whether you can claim the £2,000, and pair it with fully funded training. The AI & Automation Practitioner Level 4 needs no coding to start.
Book a free funding review →Based on the Department for Education's guidance and the apprenticeship funding rules as at 1 July 2026. Scheme details can change, and individual eligibility should be confirmed before you rely on it, we are happy to check your specific situation.
Frequently asked questions.
What is the £2,000 apprenticeship hiring payment?
It is a government payment of up to £2,000 for non-levy-paying employers who recruit a new apprentice aged 16 to 24, for apprenticeships starting from 1 October 2026. It is paid in two instalments: the first once the apprentice completes their first 90 days on programme, and the second at around 365 days, provided they remain in learning. It sits on top of fully funded training for under-25s at non-levy employers.
Who is eligible for the £2,000 hiring payment?
Non-levy-paying employers who take on an apprentice aged 16 to 24 at the start of their practical period, where the apprenticeship starts from 1 October 2026 and the apprentice joined the employer within the previous 90 days. The apprentice must be on the employer's PAYE scheme and recorded in the employer's apprenticeship service account.
I run an SME but I pay the apprenticeship levy. Can I claim the £2,000?
No. The payment is for non-levy payers only, not for SMEs as a category. Eligibility is based on levy status, not company size. An employer with a pay bill over £3 million pays the levy and is not eligible, even if it is otherwise a small or medium-sized business. Many SMEs now pay the levy, so it is worth checking your status before assuming you qualify.
What is the 90-day employment rule, and the July exception?
To be eligible, the apprentice must have joined the employer no more than 90 days before the start of their apprenticeship (this was previously described as three months). There is an exception for the opening of the scheme: a young person employed on 1 or 2 July 2026 is eligible for the hiring payment provided their training starts on 1 October 2026, even though that is slightly more than 90 days earlier.
When and how is the £2,000 paid?
It is paid in two instalments of £1,000: the first once the apprentice has completed their first 90 days on programme, and the second at around 365 days, provided they are still in learning. To enable the payment, the apprentice must be added to the employer's PAYE scheme and included in the employer's apprenticeship service account, so the Department for Education can data-match the record.
Is the £2,000 hiring payment the same as the £3,000 Youth Jobs Grant?
No. They are two different schemes. The £2,000 apprenticeship hiring payment is for non-levy employers taking on a 16 to 24-year-old apprentice from October 2026. The £3,000 Youth Jobs Grant is a separate DWP recruitment incentive for hiring an unemployed 18 to 24-year-old who has been on Universal Credit for six months. Depending on the circumstances, an employer may be able to benefit from both.
Sources
Department for Education, Find training and employment schemes: the Growth and Skills Levy, and the apprenticeship funding rules (GOV.UK). Figures and dates as published; confirm current eligibility before relying on it.