In the German apprenticeship system, initial and continuing VET is based on mixed financing by various public and private bodies. The training companies finance the in-company training. The Federal States fund the vocational schools (mainly teaching staff salaries) and the local authorities’ equipment and infrastructures. The Federal Government finances measures for the improvement and promotion of the apprenticeship system.

Companies

The companies participate voluntarily in apprenticeship training and bear its costs. Companies enter an apprenticeship contract with their apprentices and pay them an allowance based on collective agreement. The average allowance across Germany for 2018 was 908 euros gross per month (Datenreport 2019; p. 266). The personnel costs for the apprentices take the predominant share with an average of 62% of the in-company training costs. If a company refrains from providing in-company training it has no levies to pay. Only in the construction sector all companies finance a branch training fund that benefits training companies. There are frequent calls – especially from the unions – to extend this model to other branches or to introduce a general training levy.

Training levy in the construction sector

Based on a decision of the social partners the construction sector introduced a training levy in 1976. All companies of the sector have to pay the levy. The amount is settled in the collective bargaining agreement. The levy is used to finance all inter-company training and a large part of the in-company training. 

Public funds

Public funds are allocated by the Federal Ministries of Education and Research, Economic Affairs and Energy, Labour and Social Affairs, the German Federal Employment Agency and the Federal States. Those expenses are linked to the development, improvement, execution and promotion of apprenticeship, e.g. over support programmes or measures for guidance and counselling. The total sum of public expenditures for apprenticeship training amounts to 6,84 billion euros in 2017 (Datenreport 2019).

Inter-company training centres and chambers

Inter-company vocational training centres (überbetriebliche Berufsbildungsstätten, Überbetriebliche Lehrlingsunterweisung in the skilled trade sectors) or training structures (Ausbildungsverbünde) are operated mainly by public law bodies (municipalities, chambers and guilds) or non-profit private law bodies (trade associations). There is a mixed financing, with subsidies from the federal employment agency, the federal government (capital grants from the Federal Ministry for Education and Research) and the states added to the resources of the responsible body (ReferNet 2018). The chambers obtain their funding through the dues of the compulsory member companies.