Do I need to register as an employer to take on an apprentice?

Yes. An apprentice is an employee, so you register with HMRC as an employer before the first payday and run PAYE payroll. In 2026-27, an apprentice under 25 costs you no employer National Insurance on pay up to £50,270.

The rules below follow GOV.UK and The Pensions Regulator as checked on 17 October 2026, with figures for the 2026-27 tax year (6 April 2026 to 5 April 2027). This is general information to help you understand the rules. It isn't tailored to your circumstances, so check your own position before acting on it.

Why an apprentice is not a subcontractor

GOV.UK says you must give an apprentice a contract of employment, pay their wage, and sign an apprenticeship agreement. They must have the same conditions as other employees, including paid holidays and sick pay, and you pay them for time spent training. In our reading, that rules out paying them under the Construction Industry Scheme (CIS) the way you might pay a labourer. GOV.UK warns that a contractor may get a penalty if someone treated as a subcontractor should be an employee.

Registering and running payroll

GOV.UK says you must register for PAYE if, in the current tax year, an employee is paid £96 or more a week, gets expenses or benefits, gets a pension, has had another job, or has received Jobseeker's Allowance, Employment and Support Allowance or Incapacity Benefit. A full-time apprentice will pass the £96 line straight away.

Register before the first payday to get your employer PAYE reference, but not more than 2 months before you start paying anyone. After that, you report each payment to HMRC on or before every payday through payroll software. This is called Real Time Information.

The 2026-27 figures

HMRC says the 0% rate needs the apprentice to be under 25 and following a government-recognised apprenticeship standard or framework, with a written agreement naming it and giving start and expected completion dates. Payroll uses National Insurance category letter H, even if the apprentice is also under 21. From age 25, use their ordinary letter, usually A. If the apprenticeship ends first, use M while they are under 21 (also 0% up to £50,270), then A.

Employment Allowance reduces employer National Insurance. HMRC's guidance says a self-employed person can claim it if they have employees and the business pays employer Class 1 National Insurance on their earnings. In our reading, if your only employee is an apprentice on the 0% rate, there is nothing for the allowance to reduce.

Apprentices aged 16 to 21 are not automatically enrolled into a pension. The Pensions Regulator says one earning more than £6,240 a year can opt in, and you must then pay the employer contribution.

What this means for you

Take a 19-year-old in the first year of an apprenticeship, paid £8 an hour for 37.5 hours a week, every week including paid holiday.

The wage, any employer pension contribution and any employer's National Insurance are all allowable business expenses. Assume you live outside Scotland, have no other income, get the full Personal Allowance, and your profit stays between £12,570 and £50,270 with and without the wage. Then £15,600 of wages saves 20% Income Tax and 6% Class 4 National Insurance: £15,600 × 26% = £4,056 a year. This is an example only.

Employers' liability insurance is a legal requirement from the day you become an employer, with cover of at least £5 million from an authorised insurer. You can be fined £2,500 for every day you are not properly insured. GOV.UK lists two exceptions: you only employ a family member, or you only employ someone based outside England, Scotland and Wales.

Training funding in England

GOV.UK's apprenticeship guidance is for employers in England. For apprenticeships starting from 1 August 2026, if you do not pay the apprenticeship levy, which only applies to pay bills over £3 million, the government pays 100% of training and assessment, up to the funding band maximum, for apprentices aged 16 to 24. For older apprentices you pay 5%. Non-levy employers may also get a hiring payment of up to £2,000 for an apprentice aged 16 to 24 when training starts, if it starts on or after 1 October 2026, paid in 2 instalments of £1,000, at 90 days and at 1 year, if they still work for you. It is not paid if they worked for you for more than 90 days before training started.

Steps to take on your first apprentice

1. Find an approved apprenticeship and a training provider, and check the funding rules.
2. Get employers' liability insurance before they start.
3. Give them a contract of employment, and sign the apprenticeship agreement and the training plan.
4. Register as an employer with HMRC before the first payday.
5. Set up payroll with category letter H for an apprentice under 25 (after that, M if still under 21, otherwise usually A), and report on or before each payday.
6. Write to them within 6 weeks of their start date about their right to opt in to a pension, and send The Pensions Regulator your declaration of compliance within 5 months.
7. Record wages, pension and any employer's National Insurance as expenses in your bookkeeping or Making Tax Digital (MTD) software.

Our guides to paying a labourer or subcontractor and paying your partner a wage cover the other ways of paying for help. The free MTD check shows when MTD starts for you, and the trades section has more guides.