Earnings and employment from Pay As You Earn Real Time Information, UK: August 2021

Experimental monthly estimates of payrolled employees and their pay from HM Revenue and Customs’ (HMRC’s) Pay As You Earn (PAYE) Real Time Information (RTI) data. This is a joint release between HMRC and the Office for National Statistics (ONS).

This is not the latest release. View latest release

Cyswllt:
Email Debra Leaker, C. Robinson

Dyddiad y datganiad:
17 August 2021

Cyhoeddiad nesaf:
14 September 2021

1. Main points

  • Early estimates for July 2021 indicate that the number of payrolled employees rose by 2.0% compared with July 2020, which is a rise of 576,000 employees; the number of payrolled employees is down by 0.7% since February 2020, a fall of 201,000.

  • In July 2021, 182,000 more people were in payrolled employment when compared with June 2021.

  • Early estimates for July 2021 indicate that median monthly pay increased by 6.4% compared with July 2020 and median pay increased by 6.4% when compared with February 2020.

  • Between July 2020 and July 2021, all age groups saw an increase in payrolled employees; there was an increase of 247,000 payrolled employees aged younger than 25 years.

  • Annual growth in payrolled employees in July 2021 was the highest in Gwynedd, with a rise of 6.1%, and was lowest in Haringey and Islington, with a fall of 0.9%.

  • The increase in payrolled employees between July 2020 and July 2021 was largest in the administrative and support services sector (a rise of 212,000 employees) and smallest in the wholesale and retail sector (a fall of 50,000).

  • Three of the sectors that have had the greatest decreases have all continued to see monthly increases in payrolled employees, according to flash estimates; between June and July 2021, accommodation and food service activities increased by 32,000 employees, arts and entertainment by 13,000, and wholesale and retail by 7,000.

  • Annual growth in median pay for employees in July 2021 was highest in the arts and entertainment sector (an increase of 15.9%) and lowest in the households sector (a decrease of 0.6%).

Annual growth rates for July 2021 are compared against July 2020, and so the reduction in employees and median pay seen following the beginning of the coronavirus (COVID-19) pandemic is no longer contributing to the annual growth rate. Annual growth rates are now compared with this lower baseline.

About the data in this release

Early estimates for July 2021 are provided to give an indication of the likely level of employees as well as median pay in the latest period. The figures for July 2021 are based on around 85% of information being available. They are considered of lower quality and may be subject to revision in next month’s release when between 98% to 99% of data will be available. This work was introduced in April 2020, in response to coronavirus (COVID-19) and methods will continue to be developed. A revisions triangle is available for employees and median pay at the UK level.

This release covers people paid through the Pay As You Earn (PAYE) system where their pay is reported through the Real Time Information (RTI) system. As employees who are furloughed as part of the Coronavirus Job Retention Scheme (CJRS) programme should still have their payments reported through this system, they should feature in these data and contribute toward the employment and pay statistics for the relevant periods.

Statistics in this release are based on people who are employed in at least one job paid through PAYE, and monthly estimates reflect the average of such people for each day of the calendar month. This follows the introduction of a new methodology in December 2019, designed to better align with international guidelines for labour market statistics. This differs from the methodology used prior to December 2019, which produced statistics based on the total number of people paid in a particular time period.

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2. Payrolled employees

Early estimates for July 2021 indicate that there were 28.9 million payrolled employees (Figure 1), a rise of 2.0% compared with the same period of the previous year and a rise of 576,000 people over the 12-month period. Compared with the previous month, the number of payrolled employees increased by 0.6% in July 2021 – equivalent to 182,000 people.

Since the start of 2021, growth rates have started to recover on the lower rates seen since the start of the coronavirus (COVID-19) pandemic. However, part of this recovery is because of the reduction in employees between March and May 2020 no longer contributing to the annual growth rate.

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3. Median monthly pay

Early estimates for July 2021 indicate that median monthly pay increased to £1,978, an increase of 6.4% compared with the same period of the previous year.

Pay growth for April and May 2020 became negative at the outset of the coronavirus (COVID-19) pandemic, but then increased, and by September 2020 was above pre-coronavirus (February 2020) levels.

The relatively high level of pay growth between June and December 2020 is partially explained by lower levels of inflows than usual during that period. The high level of pay growth in April 2021 is attributed to the record high in median pay in April 2021, combined with the suppressed level of median pay in April 2020 at the onset of the coronavirus (COVID-19) pandemic.

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4. Regional data

The regional figures in this bulletin are based on where employees live and not the location of their place of work. They include data for July 2021, and cover Nomenclature of Territorial Units for Statistics: NUTS1, NUTS2 and NUTS3 regions.

While the UK as a whole has experienced moderate, if declining, payrolled employee growth since January 2017, growth within regions has not been uniform (Figure 5).

Numbers of payrolled employees in the UK for the regions shown in Figure 5 range from 763,000 in Northern Ireland to 4,067,000 in the South East in July 2021.

The North East, North West, East Midlands and Northern Ireland are now above pre-coronavirus (February 2020) levels.

Figure 5: Regional employee growth has fallen across the UK over the last year, but has risen more recently

Percentage change on same month in previous year, seasonally adjusted, UK, January 2017 to July 2021

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Notes:
  1. The latest period is based on early data and therefore is more likely to be subject to slightly more significant revisions.
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Employee numbers within NUTS2 and NUTS3 regions are available in the datasets published alongside this bulletin.

Over the course of the coronavirus (COVID-19) pandemic, all regions’ growth rates followed a similar pattern: rapidly declining and becoming negative since April 2020, but beginning to improve again in the recent months. However, the magnitude of changes varies.

Comparing July 2021 with the same period of the previous year for NUTS1 regions, changes in payrolled employees ranged from a 3.1% increase in Northern Ireland to a 0.6% increase in London.

Examining NUTS3 regions, Haringey and Islington experienced a decrease of 0.9% in payrolled employees in comparison with July 2020, and Gwynedd experienced an increase of 6.1% (Figure 6).

Figure 6: Growth in payrolled employees varies across the UK

Percentage change on same month in previous year, seasonally adjusted, UK, July 2021

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Notes:
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Median pay across the NUTS3 regions of the UK in July 2021 ranged from £1,658 in Torbay to £3,078 in Wandsworth (Figure 7).

Inner London generally differs from Outer London, with median pay ranging from £1,981 in Enfield to £3,078 in Wandsworth. Median pay in July 2021 for London as a whole was £2,411.

Figure 7: Median pay varies across the UK

Median pay, seasonally adjusted, UK, July 2021

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5. Industry data

The industrial sectors in this bulletin are based on the UK Standard Industrial Classification (SIC) codes, as defined by the Office for National Statistics (ONS). These codes have been determined from both the Inter-Departmental Business Register and data from Companies House for each Pay As You Earn (PAYE) enterprise. The findings from the 14 largest sectors are presented. The seven smaller sectors have been removed from the bulletin for presentational purposes, but their estimates are available in the datasets published alongside this bulletin.

The three largest sectors – wholesale and retail, health and social work, and education – account for more than 40% of UK employees. These three sectors combined with administrative and support services, manufacturing, professional, scientific and technical, and accommodation and food service activities account for more than 70% of UK employees.

All sectors highlighted experienced a decrease in employee growth around April 2020, with the smallest decrease being in health and social work.

For the first time since March 2020, accommodation and food service activities experienced positive growth.

When compared with the same period of the previous year, percentage changes in payrolled employees range from negative 2.6% in arts and entertainment to positive 9.5% in administrative and support services.

Figure 8: Employee growth has been very different across sectors

Percentage change on same month in previous year, seasonally adjusted, UK, January 2017 to July 2021

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Notes:
  1. The latest period is based on early data and therefore is more likely to be subject to slightly more significant revisions.
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The increase in payrolled employees between July 2020 and July 2021 was largest in the administrative and support services sector (a rise of 212,000 employees) and smallest in the wholesale and retail sector (a fall of 50,000 employees).

However, the flash estimate suggests that three of the sectors that have had the greatest decreases have all continued to see monthly increases in payrolled employees. Between June and July 2021, accommodation and food service activities increased by 32,000 employees, arts and entertainment by 13,000, and wholesale and retail by 7,000.

Median pay in July 2021 across the highlighted sectors ranged from £1,078 in the accommodation and food service activities sector to £3,191 in finance and insurance (Figure 10).

Compared with the same month in the previous year, median pay grew fastest in the arts and entertainment sector (positive 15.9%, Figure 11) and slowest in the households sector (negative 0.6%).

Estimates of mean pay for each sector are available in the datasets published alongside this bulletin.

However, care needs to be taken when interpreting median pay growth. As explored in more detail in previous bulletins and Section 7, mean and median pay growth are influenced by the relative pay of those entering and leaving the labour market. The high median pay growth in the arts and entertainment sector may be a consequence of unusual relative pay of inflows or outflows in that sector.

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6. Age data

The age figures in this bulletin are calculated based on individuals’ age at the time they receive a payment.

Of the 28.9 million payrolled employees in the UK in July 2021, 95.0% are aged 18 to 64 years. Between July 2020 and July 2021, there was a 247,000 increase in payrolled employees aged younger than 25 years. During the same period, payrolled employees aged 50 to 64 years increased by 166,000.

The number of payrolled employees aged 50 years and over has increased at faster rates than the UK as a whole since 2017 (Figure 13). Since 2019, this is particularly true for those aged 65 years and over, which saw employee growth peak at 10.8% in January 2020.

These periods of higher growth coincide with the phased increase in State Pension age between March 2019 and September 2020, from 65 to 66 years for both men and women. Conversely, growth in payrolled employees under age 25 years has undergone long-term decline since 2017, particularly compared with the UK as a whole.

Since July 2020, annual employee growth has risen to positive 0.6% for those aged 25 to 34 years, and positive 0.8% for those aged 35 to 49 years. Those aged under 18 years saw a rise in employee growth to 28.0% during this period.

Figure 13: Employee growth fell more sharply in younger age groups, but has risen more recently

Percentage change on same month in previous year, seasonally adjusted, UK, January 2017 to July 2021

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Notes:
  1. The latest period is based on early data and therefore is more likely to be subject to slightly more significant revisions.
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Median pay in July 2021 ranged from £393 for those under 18 years to £2,322 for those aged 35 to 49 years (Figure 14). Overall, median pay is higher in central age bands, of those studied.

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7. Average pay growth: alternative metrics

This publication uses the median as the primary metric for average pay. Growth in median pay is the growth rate for the median earner, which takes the pay of the median (or middle) earner for two periods and calculates the growth between these, with this publication focusing to date on annual pay growth.

However, when the labour market is not stable and there are large changes in inflows or outflows, care needs to be taken when interpreting median pay growth. Alternative metrics of average pay growth may be required at these times.

An alternative measure, median of pay growth, calculates each employee’s pay growth for a certain period, and then takes the median of these growth rates. It is a measure of average pay growth, as opposed to growth in average pay. It is the measure used in the Annual Survey of Hours and Earnings. It only measures those in continuous employment, as an employee cannot have a pay growth rate between two periods if they were not in employment for one of them. It is therefore not directly influenced by inflows and outflows.

The median of pay growth fell during April and May 2020 (Figure 15), but has since increased to slightly above pre-coronavirus (COVID-19) levels, in contrast to the growth in median pay, which is now higher than the average growth before March 2020 (as explored in Section 3).

Another approach that could be taken is to consider the growth in median pay over a shorter period of time. The advantage of considering median pay over a 12-month period is that the monthly variations are less volatile compared with the annual level. However, where there are shocks to the labour market like this, it may be useful to consider median pay growth over shorter time periods.

Figure 16 illustrates the relative paths of monthly, quarterly and annual pay growth. Pay growth over two years is also included to compare against pay in the same month but prior to any coronavirus pandemic effects. (The monthly, quarterly and two-year pay series have not been annualised.)

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8. Earnings and employment data

Earnings and employment from Pay As You Earn Real Time Information, non-seasonally adjusted
Dataset | Released on 17 August 2021
Earnings and employment statistics from Pay As You Earn (PAYE) Real Time Information (RTI) (Experimental Statistics), non-seasonally adjusted.

Earnings and employment from Pay As You Earn Real Time Information, revision triangle
Dataset | Released on 17 August 2021
Revisions of earnings and employment statistics from Pay As You Earn (PAYE) Real Time Information (RTI) (Experimental Statistics).

Earnings and employment from Pay As You Earn Real Time Information, seasonally adjusted
Dataset | Released on 17 August 2021
Earnings and employment statistics from Pay As You Earn (PAYE) Real Time Information (RTI) (Experimental Statistics), seasonally adjusted.

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9. Glossary

Median monthly pay

Median monthly pay shows what a person in the middle of all employees would earn each month. The median pay is generally considered to be a more accurate reflection of the “average wage” because it discounts the extremes at either end of the scale.

National Minimum Wage and National Living Wage

The National Minimum Wage (NMW) is a minimum amount per hour that most workers in the UK are entitled to be payrolled. There are different rates of minimum wage depending on a worker’s age and whether they are an apprentice. The NMW applies to employees aged between 16 and 24 years. The government’s National Living Wage (NLW) was introduced on 1 April 2016 and applies to employees aged 25 years and over.

In April 2021, the NMW and NLW rates were:

  • £8.91 for employees aged 23 years and over
  • £8.36 for employees aged 21 to 22 years
  • £6.56 for employees aged 18 to 20 years
  • £4.62 for employees aged under 18 years
  • £4.30 for apprentices aged under 19 years and those aged 19 years or over who are in the first year of their apprenticeship

Pay As You Earn

Pay As You Earn (PAYE) is the system employers and pension providers use to take Income Tax and National Insurance contributions before they pay wages or pensions to employees and pensioners. This publication relates to employees only and not pensioners. It was introduced in 1944 and is now the way most employees pay Income Tax in the UK.

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10. Measuring the data

Data source and collection

The data for this release come from HM Revenue and Customs’ (HMRC’s) Pay As You Earn (PAYE) Real Time Information (RTI) system. They cover the whole population rather than a sample of people or companies, and they will allow for more detailed estimates of the population. The release is classed as Experimental Statistics as the methodologies used to produce the statistics are still in their development phase. As a result, the series are subject to revisions.

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Coverage

This publication covers employees payrolled by employers only. It does not cover self-employment income or income from other sources such as pensions, property rental and investments. Where individuals have multiple sources of income, only income from employers is included.

The figures in this release are for the period July 2014 to July 2021 and are seasonally adjusted.

Upcoming changes

Future bulletins are planned to include additional statistics, such as more detailed geographic breakdowns, industry and demographic breakdowns. The focus and timing of these will be informed by user feedback. Please email rtistatistics.enquiries@hmrc.gov.uk if you would like to offer feedback on how the contents can be improved in the future.

Methodology

An accompanying article contains more information on the calendarisation and imputation methodologies used in this bulletin, alongside comparisons with other earnings and employment statistics and possible quality improvements in the future.

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11. Strengths and limitations

Pre-release data

HM Revenue and Customs (HMRC) grants pre-release access to official statistics publications. As this is a joint release, and in accordance with the HMRC policy, pre-release access has been granted to a number of people to enable the preparation of statistical publications and ministerial briefing. Further details, including a list of those granted access, can be found on MRC’s website.

Experimental Statistics status

This is a joint experimental release between HMRC and the Office for National Statistics (ONS). The existing monthly publications produced by the ONS remain the primary National Statistics for the labour market. The intention is that these new statistics will also be updated on a monthly basis.

The release is classed as Experimental Statistics as the methodologies used to produce the statistics are still in their development phase. This does not mean that the statistics are of low quality, but it does signify that the statistics are new and still being developed. As the methodologies are refined and improved, there may be revisions to these statistics.

Rather than waiting until the development work has been completed, the statistics are being published now to involve potential users in developing the statistics. We hope that this encourages users to provide us with their thoughts and suggestions on how useful the statistics are and what can be done to improve them. Comments can be sent by email to rtistatistics.enquiries@hmrc.gov.uk.

More information about Experimental Statistics, including when they should be used and the differences between them and National Statistics, is available.

Strengths of the data

As Pay As You Earn (PAYE) Real Time Information (RTI) data cover the whole population, rather than a sample of people or companies, we are able to use these to produce estimates for geographic areas and other more detailed breakdowns of the population. The methods for producing such breakdowns are under development and we expect to include further statistics in a future release. These statistics can help inform decision-making across the country. They also have the potential to provide more timely estimates than existing measures.

These statistics also have the potential to replace some of those based on surveys, which could reduce the burden on businesses needing to fill in statistical surveys.

Imputation and revisions

A limitation of the calendarisation used is that the figures for pay and numbers of employees in month t depend on payments made in month t plus 1. This means only around 80% of the data used in the calculation on month t statistics are available at the end of each month.

Rather than wait until all those remaining payment returns have been received, we have decided to produce a timelier measure of numbers of employees and median pay by imputing the values for missing returns. The data on which the statistics are based were extracted at the beginning of August 2021, which means around 1% to 2% of the data for June 2021 are imputed, while around 15% of the data for the “flash” July 2021 data are imputed. As a result, the figures in future releases will be updated as new payment returns are received, and the imputation payments can be replaced with actual data.

Starting with the December 2020 publication, we introduced a revisions policy. For each publication, we incorporate new input data only for the latest two tax years. In May of each year, new input data will be incorporated for the whole data time series. The benefit of introducing this revisions policy is that we are able to use the processing time saved to produce and publish more detailed breakdowns.

Seasonal adjustment

The seasonal adjustment applied in this bulletin follows established best practice. This approach assumes that any seasonal patterns remain broadly consistent over time. If the seasonal pattern changes in strength, this will be represented as greater volatility in the seasonally adjusted figures. Both the seasonal and non-seasonally adjusted data sets are released alongside this bulletin.

Differences compared with the Labour Force Survey and Average Weekly Earnings statistics

Further information about the methodology used and comparisons with the ONS’s Labour Force Survey (LFS) and Average Weekly Earnings can be found in New methods for monthly earnings and employment estimates from Pay As You Earn Real Time Information (PAYE RTI) data: December 2019.

Comparison of labour market data sources shows the strengths and weaknesses of these sources and other labour market data sources, including the advantages of new administrative data sources and limitations of some of our published figures.

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Manylion cyswllt ar gyfer y Bwletin ystadegol

Debra Leaker, C. Robinson
labour.market@ons.gov.uk; rtistatistics.enquiries@hmrc.gov.uk
Ffôn: +44 1633 455400