Earnings and employment from Pay As You Earn Real Time Information, UK: March 2022

• Early estimates for February 2022 indicate that the number of payrolled employees rose by 5.5% compared with February 2021, a rise of 1,556,000 employees; the number of payrolled employees was up by 2.3% since February 2020, a rise of 662,000.

• There were 275,000 more people in payrolled employment in February 2022 when compared with January 2022.

• UK payrolled employee growth for January 2022 compared with December 2021 has been revised from an increase of 108,000 reported in the last bulletin to an increase of 61,000; this is a result of incorporating additional real time information (RTI) submissions into the statistics, reducing the need for imputation (which takes place every publication); as early estimates have a higher level of imputation, revisions of this scale are within expectation.

• Early estimates for February 2022 indicate that median monthly pay increased by 5.1% compared with February 2021 and increased by 9.7% when compared with February 2020.

• All age groups saw an increase in payrolled employees between February 2021 and February 2022; there was an increase of 606,000 payrolled employees aged under 25 years.

• For Nomenclature of Territorial Units for Statistics (NUTS) 3 regions, annual growth in payrolled employees in February 2022 was the highest in Tower Hamlets, with a rise of 13.4%, and was lowest in Warrington, with a rise of 2.7%; at local administrative unit level, growth rates vary between positive 2.7% and positive 13.4%.

• The increase in payrolled employees between February 2021 and February 2022 was largest in the accommodation and food service activities sector (a rise of 359,000 employees) and smallest in the finance and insurance sector (a rise of 4,000).

• Annual growth in median pay for employees in February 2022 was highest in the other service activities sector (an increase of 11.7%), and lowest in the public administration sector (a decrease of 0.8%).

Annual growth rates for February 2022 are compared with February 2021, 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 February 2022 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 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 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 RTI system. As employees who are furloughed as part of the Coronavirus Job Retention Scheme (CJRS) 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. Similarly, following the end of the furlough scheme, employees who have been given notice that their employment will end will continue to be included in the RTI data while they work out their notice period. This effect could extend over a few months, given statutory notice periods. This is consistent with how any employee being made redundant would appear in the RTI data.

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 before December 2019, which produced statistics based on the total number of people paid in a particular time period.

Early estimates for February 2022 indicate that there were 29.7 million payrolled employees (Figure 1), a rise of 5.5% compared with the same period of the previous year. This was also a rise of 1,556,000 people over the 12-month period. Compared with the previous month, the number of payrolled employees increased by 0.9% in February 2022, which is equivalent to 275,000 people.

When comparing the number of payrolled employees in January 2022 with the previous month, the number increased by 0.2%. This is revised down from the early estimate of a 0.4% increase, reported in the previous bulletin, published in February 2022.

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, (becoming negative in April 2020) coinciding with the coronavirus (COVID-19) pandemic.

Since the start of 2021, growth rates have started to recover on the lower rates seen since the start of the coronavirus 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.

Early estimates for February 2022 indicate that median monthly pay was £2,041, an increase of 5.1% 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 pay growth became negative. This coincided with the coronavirus (COVID-19) pandemic and related economic and policy responses. From June 2020, median pay growth has been positive, and is now 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. While the general trend of pay growth is dominated by those continually employed, the mean pay of inflows tends to be around 40% lower than mean pay for those continually employed, as explored in the August 2020 bulletin and September 2020 bulletin. This means inflows into payrolled employment tend to bring down average pay and average pay growth. As inflows were relatively low between June 2020 and December 2020, this reduced the downward pressure on pay growth, which in turn increased median pay growth.

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 start of the coronavirus pandemic.

In the three months to January 2022, the 10th percentile of the monthly pay distribution was £677, the 90th percentile was £4,825 and the 99th percentile was £13,895 (Figure 5). This means that:

• 10% of payrolled employees earned equal to or less than £677 per month
• 90% of payrolled employees earned equal to or less than £4,825 per month
• 99% of payrolled employees earned equal to or less than £13,895 per month

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 February 2022, and cover Nomenclature of Territorial Units for Statistics (NUTS): NUTS1, NUTS2, NUTS3 regions, and local administrative units (LAUs).

While the UK as a whole has experienced moderate, if declining, payrolled employee growth since January 2017, growth within regions has not been even (Figure 6).

Numbers of payrolled employees in the UK for the regions shown in Figure 6 range from 777,000 in Northern Ireland to 4,213,000 in London in February 2022.

All regions are now above pre-coronavirus (COVID-19) (February 2020) levels.

Figure 6: Regional employee growth fell across the UK over 2020 and 2021, but has risen more recently

Percentage change on same month in previous year, seasonally adjusted, UK, January 2017 to February 2022

Notes:

1. The latest period is based on early data and therefore is more likely to be subject to slightly more significant revisions.

Download the data

.xlsx

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. Since January 2019, Inner London (both West and East) experienced greater volatility in employee growth than both Outer London and the UK average. Employee numbers within LAUs, and NUTS1, NUTS2 and NUTS3 regions are available in the datasets published alongside this bulletin.

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

Comparing February 2022 with the same period of the previous year for NUTS1 regions, changes in payrolled employees ranged from a 7.5% increase in London to a 4.8% increase in the East of England.

Examining NUTS3 regions, Warrington experienced an increase of 2.7% in payrolled employees in comparison with February 2021, and Tower Hamlets experienced an increase of 13.4% (Figure 7).

There is greater variation at LAU level, with growth rates varying between positive 2.7% and positive 13.4%.

Figure 7: Growth in payrolled employees varies across the UK

Percentage change on same month in previous year, seasonally adjusted, UK, NUTS3 level, February 2022

Notes:

1. The latest period is based on early data and therefore is more likely to be subject to slightly more significant revisions.

Download the data

.xlsx

Median pay across the NUTS3 regions of the UK in February 2022 ranged from £1,712 in Leicester to £3,122 in Wandsworth (Figure 8).

Inner London generally differs from Outer London, with median pay ranging from £2,030 in Enfield to £3,122 in Wandsworth. Median pay in February 2022 for London as a whole was £2,452.

Median pay across the LAUs in February 2022 ranged from £1,578 in Richmondshire to £4,909 in City of London.

Figure 8: Median pay varies across the UK

Median pay, seasonally adjusted, UK, NUTS3 level, February 2022

Notes:

1. The latest period is based on early data and therefore is more likely to be subject to slightly more significant revisions.

Download the data

.xlsx

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 (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 datasets published alongside this bulletin.

The three largest sectors - wholesale and retail, health and social work, and education - account for around 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.

Since January 2017, employee growth has not been even across sectors (Figure 9). 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. All sectors have now returned to positive growth or are level year-on-year.

When compared with the same period of the previous year, percentage changes in payrolled employees range from positive 0.4% in finance and insurance to positive 20.7% in accommodation and food service activities.

Figure 9: Employee growth has been very different across sectors

Percentage change on same month in previous year, seasonally adjusted, UK, January 2017 to February 2022

Notes:

1. The latest period is based on early data and therefore is more likely to be subject to slightly more significant revisions.

Download the data

.xlsx

The increase in payrolled employees between February 2021 and February 2022 was largest in the accommodation and food service activities sector (a rise of 359,000 employees) and smallest in the finance and insurance sector (a rise of 4,000 employees).

Median pay in February 2022 across the highlighted sectors ranged from £1,060 in the accommodation and food service activities sector to £3,228 in information and communication (Figure 11).

Compared with the same month in the previous year, median pay grew fastest in the other service activities sector (positive 11.7%, Figure 12) and slowest in the public administration sector (negative 0.8%).

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, mean and median pay growth are influenced by the relative pay of those entering and leaving the labour market. This means if the relative pay of inflows and outflows in particular sectors differ to the UK average, median pay growth could be higher or lower in these sectors. For example, median pay growth could be lower if outflows are higher paid than average, or conversely, could be higher if outflows are lower paid than average.

Similar principles apply for inflows.

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

Of the 29.7 million payrolled employees in the UK in February 2022, 94.7% are aged 18 to 64 years.

Between February 2021 and February 2022, there was an increase of 606,000 payrolled employees aged under 25 years. During the same period, payrolled employees aged 50 to 64 years increased by 300,000.

The number of payrolled employees aged 50 years and over has increased at a faster rate than the UK as a whole since 2017 (Figure 14). Since 2019, this is particularly true for those aged 65 years and over, among whom employee growth peaked at 10.7% in January 2020.

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

Since February 2021, annual employee growth has risen to positive 3.0% for those aged 35 to 49 years, and positive 3.9% for those aged 50 to 64 years. Those aged under 18 years saw a rise in employee growth to 73.6% during this period.

Figure 14: 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 February 2022

Notes:

1. The latest period is based on early data and therefore is more likely to be subject to slightly more significant revisions.

Download the data

.xlsx

Median pay in February 2022 ranged from £402 for those aged under 18 years to £2,388 for those aged 35 to 49 years (Figure 15). Overall, median pay is higher in 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.

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.

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.

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 February 2022 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 contact us by email if you would like to offer feedback on how the contents can be improved in the future.

From December 2021, we are renaming our accompanying datasets so they will follow “RTISAmmmyyyy” and “RTINSAmmmyyyy” format.

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, can be found on HMRC’s website.

The Bank of England was granted exceptional pre-release access to this bulletin and accompanying tables at 1:00pm on Friday 11 March 2022 so that the data were available for the Monetary Policy Committee (MPC) meeting held on that day. See exchange of letters requesting exceptional pre-release access so that data are available for discussion at the MPC.

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. You can send us your comments by email.

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 March 2022, which means around 1% to 2% of the data for January 2022 are imputed, while around 15% of the data for the “flash” February 2022 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 can 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.

The strengths and weaknesses of these sources and other labour market data sources is 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.