The Apprenticeship Levy is being introduced from 6 April 2017 and will be payable by large employers. The Levy will be 0.5% of the employer's pay bill, which is explained later in this article, but there is an annual allowance of £15,000.The allowance will be given on a pro-rata basis throughout the tax year. The recent HMRC guidance confirms employers will need to report their Apprenticeship Levy liability each month: from the start of the tax year if: their annual pay bill (including any connected companies or charities) in the previous tax year was more than £3 million they believe their annual pay bill (including any connected companies or charities) for the tax year will be more than £3 million if an employer's annual pay bill (including any connected companies or charities) unexpectedly increases to more than £3 million. In which case the employer will need to start reporting when this happens. An employer's annual pay bill is all payments to employees that are subject to employer Class 1 secondary NICs. Broadly wages but excluding benefits and expenses. HMRC have confirmed that employers must include payments to employees for whom there are no employer NICs including: all employees earning below the NIC lower earnings and secondary thresholds employees under the age of 21 apprentices under the age of 25 The Apprenticeship Levy will need to be reported each month on the Employer Payment Summary (known as the EPS) and should include the following: the amount of the annual Apprenticeship Levy allowance which has been allocated to that PAYE scheme the amount of Apprenticeship Levy you owe to date in the current tax year HMRC have confirmed that it is not necessary to report Apprenticeship Levy if the employer has not had to pay it in the current tax year. If you would like advice on the Apprenticeship Levy or other payroll matters please contact us. Internet Link: GOV.UK apprenticeship levy