Employer National Insurance Relief for Apprentices Under 25: What Employers Need to Know

At A Glance

Who is eligible?
Eligible employers can benefit from 0% employer National Insurance contributions on qualifying earnings for apprentices who are under the age of 25, subject to the relevant National Insurance and apprenticeship eligibility requirements. For the 2026 to 2027 tax year, the 0% rate applies to qualifying earnings between the Secondary Threshold and the Apprentice Upper Secondary Threshold.

How much funding is available?
There is no fixed payment to claim, but the 0% employer National Insurance rate can remove the secondary National Insurance cost that would otherwise apply to qualifying earnings for an eligible apprentice under 25. This saving sits alongside other Government apprenticeship support, which employers may also be able to access and stack where eligibility criteria are met, including fully funded apprenticeship training for eligible apprentices aged 16 to 24, the £2,000 apprenticeship hiring payment, the £1,000 Additional Payment, Foundation Apprenticeship incentives and the £3,000 Youth Jobs Grant.

Why should you hire an apprentice under 25?
Employer National Insurance relief can help reduce the overall cost of employing an eligible apprentice, making it easier for businesses to invest in young talent. Apprenticeships also allow employers to recruit for potential, attitude and willingness to learn, while developing skills around the needs of the organisation. When National Insurance relief is combined with fully funded training and other eligible incentives, apprenticeship recruitment can offer a cost-effective way to grow your team and develop future talent.

For employers, recruiting a new member of staff involves more than paying a salary. Recruitment, onboarding, training, equipment, workplace support and ongoing employment costs all need to be considered. When businesses are managing tight budgets and rising employment costs, finding ways to make recruitment more affordable can make a significant difference.

One financial benefit that can sometimes be overlooked when considering apprenticeships is employer National Insurance relief for apprentices under the age of 25. Eligible employers can pay National Insurance contributions at a 0% secondary rate on qualifying earnings for apprentices under 25, helping to reduce the overall cost of employing an apprentice.

This is not a temporary apprenticeship incentive or a payment that employers need to apply for separately. Instead, it forms part of the National Insurance rules that apply to qualifying apprentices. For businesses considering apprenticeship recruitment, understanding how the relief works can provide a clearer picture of the true cost of employing an apprentice.

Alongside other Government apprenticeship funding and incentives, National Insurance relief is another reason why recruiting an apprentice can make strong financial sense.

What is employer National Insurance?

National Insurance is a contribution paid through an employer’s payroll alongside an employee’s salary. Employers normally pay secondary Class 1 National Insurance contributions on qualifying earnings above the relevant threshold. For most employees, this is an additional employment cost that businesses need to include in their recruitment budgets.

The amount an employer pays depends on the employee’s earnings, National Insurance category and the applicable thresholds. However, qualifying apprentices under the age of 25 are treated differently under the National Insurance rules.

A 0% rate of secondary Class 1 National Insurance contributions applies to qualifying apprentices under 25 on earnings between the Secondary Threshold and the Apprentice Upper Secondary Threshold. For the 2026 to 2027 tax year, the Apprentice Upper Secondary Threshold is £50,270 a year. Earnings above that threshold are subject to the normal secondary rate.

This means that, for an eligible apprentice earning below the Apprentice Upper Secondary Threshold, the employer does not normally pay secondary Class 1 National Insurance contributions on those qualifying earnings. For businesses recruiting apprentices, this can represent a valuable saving compared with employing someone who does not qualify for the apprentice rate.

Who qualifies for employer National Insurance relief?

The National Insurance relief applies to qualifying apprentices who are under the age of 25. The apprentice must also be following a qualifying Government-recognised apprenticeship. In England, this means the individual must be employed under an approved English apprenticeship agreement or another qualifying arrangement recognised for National Insurance purposes.

Employers need to make sure they have the appropriate evidence and use the correct National Insurance category for the apprentice. For apprentices under 25, the relevant standard category letter is generally H. This allows payroll systems to apply the appropriate 0% employer secondary National Insurance rate where the apprentice meets the requirements.

The important point for employers is that eligibility is based on the apprentice’s age and qualifying apprenticeship status, rather than simply the fact that they are receiving an apprenticeship wage. If an apprentice reaches their 25th birthday during their apprenticeship, their National Insurance treatment changes and the 0% apprentice rate no longer applies once they are no longer eligible.

How much could an employer save?

The exact saving will depend on the apprentice’s earnings and the applicable National Insurance thresholds, so there is no single amount that applies to every employer. However, the principle is straightforward: if an employer would otherwise have paid secondary National Insurance contributions on qualifying earnings, the 0% rate can remove that additional employment cost while the apprentice remains eligible.

For example, an employer recruiting an eligible apprentice on a salary below the Apprentice Upper Secondary Threshold would not normally pay secondary Class 1 National Insurance contributions on the relevant earnings above the Secondary Threshold. This means more of the employer’s recruitment budget can be directed towards employing and developing the apprentice rather than covering additional payroll costs.

For a single apprentice, the saving may already be valuable. For an organisation recruiting several apprentices, the difference can become even more significant. This is particularly relevant for businesses that want to grow their workforce but are concerned about the total cost of adding new employees to the payroll.

Why does National Insurance relief matter for apprenticeship recruitment?

Recruitment decisions are rarely based on salary alone. When an employer calculates the cost of creating a new role, they need to consider the wider employment package, including National Insurance, pension contributions, recruitment costs, training, equipment and workplace support.

National Insurance relief can make apprenticeships more attractive because it reduces one of these additional employment costs. This is especially valuable for smaller businesses, which may need additional staff but may not have the same recruitment budget as a larger organisation.

Removing or reducing employer National Insurance costs can make it easier for a smaller business to create a new role and invest in someone who has the potential to develop within the organisation. For employers considering their first apprenticeship, it is therefore worth looking beyond the headline salary and understanding the full financial picture.

Apprenticeships can offer several financial advantages

Employer National Insurance relief is only one part of the financial case for recruiting an apprentice. Recent changes to apprenticeship funding have introduced a wider range of Government support designed to encourage employers to recruit and develop young people.

For eligible apprentices aged 16 to 24, the Government can fund 100% of apprenticeship training and assessment costs up to the relevant funding band maximum. This applies to eligible apprentices with both levy-paying and non-levy employers, subject to the relevant funding rules.

For eligible non-levy employers, there is also a hiring payment of up to £2,000 when recruiting a new apprentice aged 16 to 24 from 1 October 2026, subject to the scheme’s eligibility requirements. Additional support may also be available in certain circumstances, including incentives for Foundation Apprenticeships and support for eligible young people who have been claiming Universal Credit.

This means employers should not consider National Insurance relief in isolation. The most useful approach is to look at the complete package of apprenticeship funding and employer support available to the organisation.

National Insurance relief is different from apprenticeship funding

It is important to understand the difference between the various forms of financial support. Apprenticeship training funding helps cover the cost of training and assessment. For eligible apprentices aged 16 to 24, the Government can fund the full cost up to the relevant funding band maximum.

Employer hiring incentives provide eligible businesses with additional financial support when they recruit qualifying apprentices. National Insurance relief, by contrast, reduces the employer’s payroll costs by applying a 0% secondary National Insurance rate to qualifying earnings for apprentices under 25.

These are separate forms of support, which means the financial benefit of recruiting an apprentice can come from several different areas. For employers, this makes it particularly important to understand the full cost of recruitment rather than looking only at the apprentice’s salary or training costs.

What does the employer actually have to pay?

Although apprenticeships can offer significant financial support, employers still have normal responsibilities when employing an apprentice. Businesses must pay their apprentice’s wages and meet the relevant employment responsibilities. Apprentices must receive at least the applicable National Minimum Wage, and employers are responsible for providing appropriate workplace support, supervision and time for apprenticeship training.

National Insurance relief does not mean that employing an apprentice is completely free. Instead, it removes one specific employment cost for qualifying apprentices under 25. Employers should still budget for salary, pension contributions where applicable, equipment, supervision and other normal employment costs.

However, when these costs are considered alongside Government-funded apprenticeship training and other available incentives, the overall business case can become considerably more attractive.

What happens if the apprentice turns 25?

The National Insurance relief for apprentices is based on the apprentice being under 25. Employers therefore need to keep the apprentice’s date of birth and National Insurance category up to date. If an apprentice reaches the age of 25 during their programme, the employer will need to apply the appropriate National Insurance treatment from that point onwards.

This is an important distinction because eligibility is not determined solely by the apprentice’s age when they started. An apprentice who begins their programme at 24 may benefit from the apprentice National Insurance rate while they are under 25, but that treatment does not continue indefinitely simply because the apprenticeship began before their 25th birthday.

Employers should make sure their payroll processes are set up to reflect any changes in eligibility and that the correct National Insurance category is used when the apprentice reaches the relevant age.

Why apprenticeships can be particularly valuable for smaller businesses

Smaller businesses often have to think carefully before creating a new position. Employing someone involves a long-term financial commitment, and businesses need to be confident that the role will provide genuine value. Recruitment costs and employer National Insurance can add to that initial commitment.

Apprenticeships offer a different approach. Instead of paying a premium to recruit an experienced candidate, an employer can recruit someone with potential and develop them around the needs of the business. The apprentice learns while working, allowing the employer to build skills in-house rather than relying entirely on the external recruitment market.

When National Insurance relief is added to the wider financial picture, the cost of employment can become more manageable. For a smaller business looking to expand its team, this can help make the difference between postponing recruitment and creating a new opportunity.

The benefits go beyond the National Insurance saving

Although reducing employer National Insurance costs is an important financial benefit, it should not be the main reason businesses recruit apprentices. The real value comes from developing people and creating opportunities for individuals to build meaningful careers.

Apprentices can bring fresh ideas, enthusiasm and new perspectives to the workplace. They can develop skills that are specifically relevant to the organisation and gradually take on more responsibility as their confidence and experience grow.

Many apprentices also progress within the organisation, moving into more senior or specialist roles over time. This can help employers build a stronger internal talent pipeline, improve retention and reduce reliance on external recruitment.

National Insurance relief helps make the initial investment more affordable, but the long-term value comes from the employee the business develops.

National Insurance relief can work alongside other incentives

One of the most important things for employers to understand is that National Insurance relief is not the same as the other apprenticeship incentives currently available. Depending on the circumstances, an eligible employer may be able to benefit from several different forms of support when recruiting an apprentice.

For example, an eligible non-levy employer recruiting an additional apprentice aged 16 to 24 from October 2026 may be able to access the £2,000 hiring payment. Eligible apprentices aged 16 to 24 may also have their apprenticeship training and assessment fully funded up to the relevant funding band maximum.

There may also be additional support for eligible younger apprentices, Foundation Apprenticeships and young people who meet specific employment criteria. At the same time, an eligible apprentice under 25 may qualify for the 0% employer National Insurance rate on qualifying earnings.

This combination can significantly reduce the overall cost of recruitment and training. Because the eligibility criteria for each scheme are different, employers should always check which incentives apply to their specific circumstances rather than assuming that every apprentice will qualify for every form of support.

How can employers make the most of apprenticeship funding?

The first step is understanding what type of apprentice the business needs. Employers should consider where the organisation has skills gaps, which roles are likely to grow and where developing someone internally could provide long-term value.

Once the role has been identified, the employer can explore the apprenticeship standards that align with it and check the funding available. It is also important to consider the apprentice’s age, the organisation’s circumstances and whether the business is a levy-paying or non-levy employer, as these factors can affect the funding and incentives available.

Working with an experienced apprenticeship provider can make the process considerably easier. A good provider should be able to explain the available funding, help the employer understand the requirements and provide support throughout the recruitment process.

Educationwise can help you recruit your next apprentice

At Educationwise, we help employers use apprenticeships to recruit and develop future talent. Our free recruitment service means employers do not have to manage the entire recruitment process alone. We can help advertise a vacancy, attract suitable candidates and shortlist applicants, making it easier to find someone who is right for the role and the organisation.

We can also help employers understand the funding and Government incentives that may apply to their apprenticeship vacancy. This includes helping you understand the wider financial picture, from apprenticeship training funding and employer incentives through to the National Insurance relief available for qualifying apprentices under 25.

Our aim is to make apprenticeship recruitment straightforward, practical and worthwhile for employers.

A lower employment cost with long-term value

Employer National Insurance relief is one of the financial benefits that can make apprenticeships an attractive recruitment option. For qualifying apprentices under 25, the 0% secondary National Insurance rate on relevant earnings can remove an employment cost that businesses would otherwise need to budget for.

When this is combined with Government-funded apprenticeship training for eligible 16 to 24-year-olds and other available employer incentives, the overall cost of recruiting and developing young talent can be significantly reduced.

However, the strongest reason to recruit an apprentice is not simply the money saved. It is the opportunity to develop someone into a valuable member of the organisation. Employers can recruit for potential, develop skills around the needs of the business and create a workforce that grows alongside the organisation. The National Insurance saving simply makes that investment more accessible.

If you are considering recruiting an apprentice, now is a good time to look at the full range of Government support available. Educationwise can help you understand the funding, identify a suitable apprenticeship programme and use our free recruitment service to help you find the right candidate.

Government funding, incentives, National Insurance rules and eligibility criteria are subject to change. Please speak to Educationwise for the latest guidance relevant to your organisation.