Ask most construction company owners what their apprentices cost and they will quote you a weekly wage. Ask them what their apprentices actually cost, once you factor in supervision time, training contributions, wage progression and everything else that sits behind the payslip, and the room usually goes quiet.
The truth is that very few construction businesses know their real apprentice cost. Many of those same businesses are leaving funding on the table that could have covered a significant chunk of it.
If you run a limited company in the construction sector and you employ apprentices, or you are thinking about taking one on, this is one of those numbers you cannot afford to guess at.
The wage is just the starting point. It is the number everyone sees, so it is the number everyone budgets for. But the full cost of an apprentice is made up of several moving parts, and most of them never appear on a payslip.
There is the training contribution, which depends on whether your business pays the apprenticeship levy and on the age of your apprentice. There is the supervision cost, because someone on your team is spending billable hours mentoring rather than producing. There is wage progression, because the rate you pay in year one is not the rate you will be paying by the end of the programme. And there are the quieter costs that catch businesses out, from tools and PPE to travel, insurance adjustments and time spent on paperwork.
Some of these costs are unavoidable. Some of them are far smaller than owners assume. And some of them can be offset almost entirely, if you know where to look. That last part is where most construction companies fall down.
This is one of the most common mistakes we see. The way apprenticeship training is funded in England depends on the size of your payroll, the age of your apprentice and the structure of your business. Depending on where you sit, the government may cover most or even all of your training costs.
Plenty of construction companies are paying contributions they do not need to pay, or structuring things in a way that costs them more than it should. Others assume training will be expensive and never take an apprentice on at all, when in reality the support available would have made it one of the most cost effective hires they ever made.
The rules around levy and non levy employers, funding bands and age thresholds are exactly the kind of detail an accountant should be walking you through before you sign anything with a training provider. If nobody has done that for you, there is a reasonable chance you are overpaying.
Construction gets something most other sectors do not. On top of the general apprenticeship funding available to every employer, CITB registered businesses can access grants specifically designed to support apprentices, from attendance payments through to completion grants and support with travel and accommodation costs for training.
Here is the problem. The CITB system has been through significant change, funding routes have moved, and many construction employers either do not realise what they are entitled to or gave up on claiming years ago because the process felt like too much hassle. We regularly speak to businesses who are registered, paying the levy, employing apprentices and claiming nothing back.
If that sounds familiar, it is worth finding out what you have missed. In some cases the grants available across a full apprenticeship add up to a genuinely meaningful sum, and combined with the other reliefs on offer they can change the economics of taking on an apprentice completely.
Here is the saving that almost nobody talks about. Employers do not have to pay employer National Insurance contributions for qualifying apprentices under a certain age, provided their earnings sit below the relevant threshold.
For a construction company running several apprentices through the books, this exemption alone can be worth more than any grant. Yet it is routinely missed, usually because payroll has been set up without the correct category letter and nobody has ever gone back to check.
This is a payroll detail with a real cash impact. If your apprentices are being processed under the wrong National Insurance category, you are handing money to HMRC that you were never required to pay. A payroll review will surface it quickly, and in some cases there is scope to look backwards as well as forwards.
When you put the full picture together, the answer for most construction companies is yes, but only if the setup is right. Research consistently shows that apprentices deliver a net gain to their employers during training, and that gain grows once they qualify and stay with the business. In an industry with a well documented skills shortage, growing your own talent is often cheaper and more reliable than competing for qualified tradespeople on the open market.
But the difference between an apprentice who quietly drains your margin and one who strengthens your business usually comes down to the financial groundwork. The businesses that get it right know their true cost per apprentice, claim every grant and exemption available, structure wages sensibly and plan for progression from day one.
The businesses that get it wrong tend to find out at year end, when the accounts tell a story nobody was expecting.
At Pulse we work with construction limited companies every day, from subcontractors managing CIS through to established contractors running teams of apprentices across multiple sites. We know where the funding sits, where the savings hide and where the costs creep in.
If you would like to know what your apprentices are actually costing you, and more importantly what they should be costing you, we will happily take a look. That might mean a payroll review, a funding check or a full look at how your team is structured. With offices in Newcastle, Newton Aycliffe and London, we support construction businesses across the North East, the capital and everywhere in between.
Get in touch with our team today!
help@pulse-accountants.co.uk
01325 522 123
How much does an apprentice cost a construction employer?
The full cost includes wages, a possible contribution towards training, supervision time and equipment. The real figure varies significantly depending on your payroll size, the age of your apprentice and the funding you claim, which is why many construction companies underestimate or overestimate it. An accountant can help you calculate your true cost per apprentice.
Do employers have to pay for apprenticeship training?
Not always. Depending on the size of your payroll and the age of your apprentice, the government may fund most or all of the training cost. Many construction companies pay more than they need to simply because their setup has never been reviewed.
What is the CITB apprenticeship grant?
CITB registered construction employers can claim grants towards the cost of employing apprentices, including attendance and completion payments and support with travel costs for training. Many eligible businesses never claim, often because they are unaware of what is available or find the process confusing.
Do employers pay National Insurance for apprentices?
Employers are exempt from employer National Insurance contributions for qualifying apprentices under a certain age, provided earnings are below the relevant threshold. This is one of the most commonly missed savings and is often caused by an incorrect payroll category setting.
Is it worth hiring an apprentice in construction?
For most construction companies, yes. Apprentices typically deliver a net gain to their employer during training, and the value increases once they qualify. The key is getting the financial setup right from the start so that funding is claimed and costs are controlled.