Earnings and employment from Pay As You Earn Real Time Information, UK: February 2024

• Early estimates for January 2024 indicate that the number of payrolled employees rose by 1.4% compared with January 2023, a rise of 413,000 employees.

• This annual increase was largest in the health and social work sector, a rise of 217,000 employees.

• Payrolled employment increased by 48,000 employees (0.2%) in January 2024 when compared with December 2023; this should be treated as a provisional estimate and is likely to be revised when more data are received next month.

• UK payrolled employee growth for December 2023 compared with November 2023 has been revised from a decrease of 24,000 reported in the last bulletin to an increase of 31,000, because of the incorporation of additional real time information submissions into the statistics, which takes place every publication and reduces the need for imputation.

• Early estimates for January 2024 indicate that median monthly pay increased by 6.4% compared with January 2023.

• In this month's publication, estimates for pay in Northern Ireland for November and December 2023 have seen larger revisions than usual; this is because of additional imputation being run on schemes where we have identified partially missing data in those schemes' submissions.

About the data in this release

Early estimates for January 2024 are provided to give an indication of the likely level of employees as well as median pay in the latest period. These early estimates are, on average, based on around 85% of information being available. They are of lower quality and will be subject to revision in next month's release when between 98% and 99% of data will be available. A revisions triangle is available for employees and median pay at the UK level.

Statistics in this release are based on people who are employed in at least one job paid through Pay As You Earn (PAYE), and monthly estimates reflect the average of such people for each day of the calendar month. These estimates are formed using a methodology for monthly earnings and employment estimates designed to align with international guidelines for labour market statistics.

Early estimates for January 2024 indicate that there were 30.4 million payrolled employees (Figure 1), a rise of 1.4% compared with the same period of the previous year. This is a rise of 413,000 people over the 12-month period. Compared with the previous month, the number of payrolled employees increased by 0.2% in January 2024, an increase of 48,000 people.

This monthly change should be treated as provisional, because it is based on an early estimate of January 2024 data. More information on revisions can be found in Section 7: Strengths and limitations.

When comparing the number of payrolled employees in December 2023 with the previous month, this increased by 0.1%. This is revised upwards from the early estimate of a 0.1% decrease reported in our previous bulletin, Earnings and employment from Pay As You Earn Real Time Information, UK: January 2024.

Annual growth in the number of employees remained broadly within a range of 1.0% to 1.5% from mid-2016 until 2019. Growth rates before mid-2016 were higher than 1.5% (Figure 2).

Starting around early 2019, employee growth began a slight downward trend. However, employee growth slowed more substantially past March 2020, coinciding with the coronavirus (COVID-19) pandemic, becoming negative in April 2020.

At the start of 2021, growth rates began to recover, and remained high as the labour market continued to recover from the effects of the pandemic. From April 2022 the annual growth rate has been falling. Through 2022 this fall would have been partially caused by the comparison against the increase in employee numbers from March 2021, which levelled off as we no longer compared against this higher baseline. During 2023 growth rates continued to fall.

Early estimates for January 2024 indicate that median monthly pay was £2,334, an increase of 6.4% compared with the same period of the previous year.

Following a general trend of increasing pay growth between mid-2015 and mid-2018, pay growth tended to fluctuate around 3.6%, until 2020 when it became negative. This coincided with the coronavirus (COVID-19) pandemic and related economic and policy responses. From June 2020 median pay growth became positive again. Through 2022 the growth rate of median pay continued to increase in line with pre-coronavirus trends. Since the start of 2023 this trend has continued, but with more volatility caused by some months showing much higher growth rates.

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 16 to 24 years. The government's National Living Wage (NLW) was introduced on 1 April 2016 and applies to employees aged 25 years and over. See current and previous rates for the NMW and NLW on the GOV.UK website.

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. It was introduced in 1944 and is now the way most employees pay Income Tax in the UK. This publication relates to employees only and not pensioners.

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.

Our statistical practice is regulated by the Office for Statistics Regulation (OSR). OSR sets the standards of trustworthiness, quality and value in the Code of Practice for Statistics that all producers of official statistics should adhere to. You are welcome to contact us directly with any comments about how we meet these standards by emailing RTI Statistics. Alternatively, you can contact OSR by emailing regulation@statistics.gov.uk or via the OSR website.

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 January 2024 and are seasonally adjusted.

Upcoming changes

Following the UK's withdrawal from the EU, a replacement to the Eurostat geographical classification NUTS regions has been created. The UK-managed classification of International Territorial Levels (ITLs) will replace the NUTS classification in future publications.

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.

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 to official statistics by HMRC, can be found on the GOV.UK website.

Status of official statistics in development

Official statistics in development are official statistics that are still in the testing phase and not yet fully developed. They were previously called "experimental statistics". In June 2023, the Office for Statistics Regulation (OSR) published an assessment report of HM Revenue and Customs (HMRC) and Office for National Statistics (ONS) statistics on earnings and employment from Pay As You Earn Real Time Information (PAYE RTI). HMRC and the ONS welcome OSR's assessment report and have developed an action plan focusing on the six requirements.

This is a joint release between HMRC and the ONS. The existing monthly publications produced by the ONS remain the primary National Statistics for the labour market.

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.

Industry sector classifications

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 most recent Inter-Departmental Business Register (IDBR) and data from Companies House for each Pay As You Earn (PAYE) enterprise.

Large enterprises that cover multiple SIC codes are classified into a single SIC code based on the relative number of employees in each SIC code. Changes to the proportion of employees across SIC codes in large enterprises can result in the enterprise being reclassified to a different SIC code. To obtain the SIC code we link to the most recent quarterly versions of the IDBR. Once a year when we refresh data for the whole series, the IDBR link is refreshed using the most recent version available, and any reclassifications are then used for the entirety of the time series until the next year.

This means that sector level time series represent the current employers classified in each sector and are less likely to be distorted by employers being reclassified at the enterprise level because of small changes at the lower unit level. It also means that these time series may be revised between publications and, in the historical sections of the time series, employers are classified in sectors that they were not classified in at that point in time. This method should minimise discrepancies in the data caused by reclassifications and should more easily allow the tracking of job movements between sectors.

Imputation and revisions

RTI data used in this release are extracted in the weeks following the end of the latest reference month. For some individuals this means payments relating to work done in recent reference months are yet to be received. Rather than wait until all payment returns have been received, we produce timelier measures by imputing the values for missing returns.

For the latest reference month around 15% of the data are imputed. We refer to this as the "flash" or "early" estimate in the bulletin, as this figure is the most subject to revision as payment returns are received and the imputed payments replaced with actual data. In this month's publication, estimates for pay in Northern Ireland for November and December 2023 have seen larger revisions than usual. This is because of additional imputation being run on schemes where we have identified partially missing data in those schemes' submissions.

From our July 2022 publication, two changes were made to the imputation model. A seasonal factor was incorporated into the imputation model. The model was also made more responsive to recent changes to the labour market that would affect the likelihood of a payment existing. The latter change in particular should reduce the scale of revisions seen to the "flash" estimate, but cannot eliminate revisions completely.

Earlier months also contain some imputed data. Some payment frequencies mean that we have not received the relevant payment data more than a month after the reference period. Also, in some circumstances, returns might be submitted late. Therefore, earlier months are also subject to revision, but these revisions are likely to be much smaller because the level of imputation is smaller. The proportion of imputed data for a reference month two months before data extraction is around 1% to 2% of the data.

For the majority of months, post-flash revisions will occur in small amounts gradually each month as more submissions are received. However, all RTI submissions must be received before the end of the tax year. Therefore, for months close to the end of the tax year these submissions and associated minor revisions that would have accumulated through the year instead need to be received all at once in the final submissions of the tax year. The months of January and February will be most affected by this and see sharper non-flash revisions at the end of the tax year if the imputed submissions are not received by that point. From July 2022, changes were incorporated into the imputation model to try to control for these seasonal differences, as well as other seasonal factors that might affect whether submissions are received through different points of the year.

The seasonal adjustment model will also update each month as the model is refined on the latest data available. These adjustments will appear as revisions in the seasonally adjusted data, and in the supporting seasonally adjusted revisions triangle.

Starting with the December 2020 publication, we introduced a new revisions policy. For each publication, we incorporate new input data only for the current tax year and the previous tax year. Revisions to estimates can potentially be made for up to the last two years as data can continue to be received, though updates to data outside of the most recent tax year are minimal.

Changes to the seasonally adjusted data also occur earlier than this limit, as the seasonal adjustment model is refined. The benefit of introducing this revisions policy is that we can use the processing time saved to produce and publish more detailed breakdowns. We capture any new input data referencing earlier years by incorporating data for the whole time series once a year.

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 datasets are released alongside this bulletin.

The model for seasonal adjustment is reviewed annually, with new models being applied where possible. The last update to the model has been delayed and is still currently being reviewed.

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.