The levy will apply to large employers with an annual paybill in excess of £3m and will be 0.5% of the paybill, with an allowance of £15,000.
Levy paying employers
Levy paying employers will have the responsibility to calculate, report and pay the levy to HMRC alongside their usual PAYE payments.
Example:
Levied employer of 250 employees, each with a gross salary of £20,000
Paybill: 250 x £20,000 = £5,000,000
Levy sum: 0.5% x £5,000,000 = £25,000
Allowance: £25,000 - £15,000 = £10,000 annual levy payment.
The first time eligible employers will have to declare their liability will be May 2017, for the levy due on their April payroll.
Non-levy paying employers
For those employers who do not pay the levy, or those who have spent all their levy, there is a co-investment model with the government funding 90% of the cost of training and assessment, and the employer paying the other 10%.