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

• Early estimates for May 2024 indicate that the number of payrolled employees rose by 0.6% compared with May 2023, a rise of 167,000 employees.

• This annual increase was largest in the health and social work sector, a rise of 155,000 employees.

• Payrolled employees broadly stayed the same in May 2024 when compared with April 2024, decreasing slightly by 3,000 employees; figures for May should be treated as provisional estimates and are likely to be revised when more data are received next month.

• UK payrolled employee growth for April 2024 compared with March 2024 has been revised from a decrease of 85,000 reported in the last bulletin to a decrease of 36,000; this is because of the incorporation of additional real time information (RTI) submissions into the statistics, which takes place every publication and reduces the need for imputation.

• Early estimates for May 2024 indicate that median monthly pay increased by 5.2% compared with May 2023.

• Annual growth in median pay in May 2024 was highest in the accommodation and food service activities sector, with an increase of 9.8%, and lowest in the finance and insurance sector, with an increase of 1.9%.

About the data in this release

Early estimates for May 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 May 2024 indicate that there were 30.3 million payrolled employees (Figure 1), a rise of 0.6% compared with the same period of the previous year. This is a rise of 167,000 employees over the 12-month period. Compared with the previous month, the number of payrolled employees broadly stayed the same in May 2024, decreasing slightly by 3,000 employees.

Note, this monthly change should be treated as provisional, because it is based on an early estimate of May 2024. More information on revisions can be found in Section 11: Strengths and limitations.

When comparing the number of payrolled employees in April 2024 with the previous month, the number is similar, showing a decrease of 0.1%. This is revised upwards from the early estimate of a 0.3% decrease reported in our previous bulletin, Earnings and employment from Pay As You Earn Real Time Information, UK: May 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. However, growth rates then continued to slow through 2023.

Early estimates for May 2024 indicate that median monthly pay was £2,379, an increase of 5.2% 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-pandemic trends. Since the start of 2023 this trend has continued, but with more volatility caused by some months showing much higher growth rates.

In the three months to April 2024, the 10th percentile of the monthly pay distribution was £782, the 90th percentile was £5,474 and the 99th percentile was £15,651.

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 May 2024, and cover Nomenclature of Territorial Units for Statistics (NUTS): NUTS1, NUTS2, NUTS3 regions, and local administrative units (LAUs).

Numbers of payrolled employees in the UK for the regions ranged from 802,000 in Northern Ireland to 4,351,000 in London in May 2024 (Figure 5).

London and Northern Ireland experienced higher growth than the UK average between January 2017 and early 2020, while the North East and Scotland experienced lower growth than the UK overall. Employee numbers within LAUs, and NUTS1, NUTS2, and NUTS3 regions are available in the accompanying datasets.

Figure 5: Regional employee growth fell across the UK over 2020 and 2021, but subsequently recovered across all regions

Percentage change on same month in previous year, seasonally adjusted, UK, January 2017 to May 2024

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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Comparing May 2024 with the same period of the previous year for NUTS1 regions, changes in payrolled employees ranged from the highest being a 1.6% increase in Northern Ireland to the lowest being a 0.2% increase in London.

Examining NUTS3 regions, Westminster experienced a decrease of 2.5% in payrolled employees in comparison with May 2023, and Coventry experienced an increase of 2.5% (Figure 6).

There is greater variation at LAU level, with growth rates varying between negative 6.0% and positive 3.2%.

Figure 6: Growth in payrolled employees varies across the UK

Percentage change on same month in previous year, seasonally adjusted, UK, NUTS3 level, May 2024

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 across the NUTS3 regions of the UK in May 2024 ranged from £2,057 in Leicester to £3,635 in Wandsworth (Figure 7).

Inner London generally differs from Outer London, with median pay ranging from £2,372 in Enfield to £3,635 in Wandsworth. Median pay in May 2024 for London as a whole was £2,801.

Median pay across the LAUs in May 2024 ranged from £1,991 in Richmondshire to £5,562 in City of London.

Figure 7: Median pay varies across the UK

Median pay, seasonally adjusted, UK, NUTS3 level, May 2024

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 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. 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 accompanying datasets.

The three largest sectors – health and social work, wholesale and retail, and education -- account for around 40% of UK employees. These three sectors combined with administrative and support services; professional, scientific and technical; manufacturing; and accommodation and food service activities account for more than 71% of UK employees.

Since January 2017, employee growth has not been even across sectors (Figure 8). Sectors such as construction, transportation and storage, and information and communication experienced higher growth than the UK average between January 2017 and early 2020. Sectors such as manufacturing, and wholesale and retail experienced lower growth than the UK overall.

All sectors highlighted experienced a decrease in employee growth around April 2020, with the smallest decrease being in health and social work. Public administration and defence, and health and social work saw early recoveries in their growth rates, as did administrative and support services, and education from early 2021 onwards.

When comparing early estimates for May 2024 with the same period of the previous year, percentage changes in payrolled employees ranged from negative 3.1% in information and communication to positive 3.6% in health and social work.

Figure 8: Employee growth has been very different across sectors

Percentage change on same month in previous year, seasonally adjusted, UK, January 2017 to May 2024

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 May 2023 and May 2024 was largest in the health and social work sector (a rise of 155,000 employees) and smallest in the accommodation and food service activities sector (a fall of 60,000 employees).

Median pay in May 2024 across the highlighted sectors ranged from £1,270 in the accommodation and food service activities sector to £3,813 in finance and insurance (Figure 10).

Compared with the same month in the previous year, median pay grew fastest in the accommodation and food service activities sector, at positive 9.8% (Figure 11), and slowest in the finance and insurance sector, at positive 1.9%.

Estimates of mean pay for each sector are available in the accompanying datasets.

The age figures in this bulletin are calculated based on an individual's age at the time they receive a payment.

Of the 30.3 million payrolled employees in the UK in May 2024, 94.5% are aged 18 to 64 years.

Between May 2023 and May 2024, there was a decrease of 79,000 payrolled employees aged under 25 years. During the same period, payrolled employees aged 35 to 49 years increased by 118,000.

Median pay in May 2024 ranged from £419 for those aged under 18 years to £2,758 for those aged 35 to 49 years (Figure 13). Overall, median pay is higher in the central age bands, of those studied.

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 government 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.

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 May 2024 and are seasonally adjusted.

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.

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.

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. Please contact us by email if you would like to offer feedback on how the contents can be improved 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 their website.

Status of Official Statistics in Development

Official statistics in development are official statistics that are undergoing a development. 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.

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. However, 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 in which they were not classified at that point in time. However, 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.

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.

Further information on the impact of the changes to the imputation model can be found in our methods article, Impact of imputation changes in employment statistics from Pay As You Earn Real Time Information methodology.

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.

The strengths and weaknesses of these sources and other labour market data sources are shown in our Comparison of labour market data sources methodology, including the advantages of new administrative data sources and limitations of some of our published figures.