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

• Early estimates for April 2022 indicate that the number of payrolled employees rose by 4.2% compared with April 2021, a rise of 1,187,000 employees; the number of payrolled employees was up by 1.8% since February 2020, a rise of 530,000.

• Payrolled employment increased by 0.4% in April 2022 when compared with March 2022, a rise of 121,000 people; this should be treated as an upper bound and is likely to be revised downwards when more data is received next month.

• UK payrolled employee growth for March 2022 compared with February 2022 has been revised from an increase of 35,000 reported in our last publication to an increase of 59,000, 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 April 2022 indicate that median monthly pay increased by 5.6% compared with April 2021, and increased by 11.7% when compared with February 2020.

• All age groups saw an increase in payrolled employees between April 2021 and April 2022; there was an increase of 503,000 payrolled employees aged under 25 years.

• For Nomenclature of Territorial Units for Statistics (NUTS) 3 regions, annual growth in payrolled employees in April 2022 was highest in Tower Hamlets, with a rise of 11.6%, and lowest in Warrington, with a rise of 1.6%.

• The increase in payrolled employees between April 2021 and April 2022 was largest in the accommodation and food service activities sector (a rise of 333,000 employees) and smallest in the construction sector (a rise of 3,000).

• This month, NUTS1 regions are further broken down by sectors in the supporting datasets for this bulletin; some sectors show similar growth rates to the region level, while others, such as accommodation and food service activities, and transportation and storage, show moderate regional variation.

• Annual growth in median pay for employees in April 2022 was highest in the other service activities sector (an increase of 9.3%), and lowest in the education sector (an increase of 2.4%).

Annual growth rates for April 2022 are compared with April 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 April 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 of lower quality and will 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 the COVID-19 pandemic, and methods will continue to develop. Our 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. Employees who were furloughed as part of the Coronavirus Job Retention Scheme (CJRS) should still have had their payments reported through this system, so would have contributed toward the employment and pay statistics during the period that this support was available. Similarly, following the end of the furlough scheme, employees who were given notice that their employment would end continued to be included in the RTI data while they worked out their notice period. 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. Monthly estimates reflect the average of such people for each day of the calendar month. This follows the introduction of our new methodology in December 2019, designed to better align with international guidelines for labour market statistics. This differs from our methodology used before December 2019, which produced statistics based on the total number of people paid in a particular time period.

Early estimates for April 2022 indicate that there were 29.5 million payrolled employees (Figure 1), a rise of 4.2% compared with the same period of the previous year. This means a rise of 1,187,000 people over the 12-month period. Compared with the previous month, the number of payrolled employees increased by 0.4% in April 2022, which is equivalent to 121,000 people. The early estimate for April 2022 shows the first fall in the annual growth rate since early 2021, but still shows relatively high growth. This fall in the growth rate will be partially driven by the comparison against the increase in employee numbers in March 2021, the first substantial increase since January 2020.

This monthly growth of 121,000 should be treated as an upper bound, because it is based on an early estimate of April 2022 employees. Over the last 10 months, these early estimates have been revised downwards by an average of 109,000 employees. The effect of these revisions on the monthly growth is normally mitigated by revisions to the previous month’s employees. However, historic trends indicate that the revisions to March 2022 employees will be relatively small in the next month’s publication. Therefore, if April 2022 employees are revised next month consistently with the last 10 months, the monthly growth between March and April 2022 is likely to be substantially reduced.

When comparing the number of payrolled employees in March 2022 with the previous month, the number increased by 0.2%. This is revised upwards from the early estimate of a 0.1% increase, reported in our previous version of this bulletin, published in April 2022. A comparison of the early estimate for April 2022 against the early estimate for March 2022 from last month’s bulletin would show a negative change. However, in this bulletin, because of the revision to March, we still see positive growth between March and April. The latest revised estimates are more accurate and are the ones that should be used for a comparison. More information on revisions can be found in the Strengths and Limitations section.

Growth rates before mid-2016 were higher than 1.5%, falling to then stay level within a range of 1.0% to 1.5% until 2019 (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 have since remained high as the labour market continues to recover from the effects of the coronavirus pandemic.

Early estimates for April 2022 indicate that median monthly pay was £2,076, an increase of 5.6% 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 fluctuated 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 pandemic (February 2020) levels.

The relatively high level of pay growth between June and December 2020 is partially explained by lower levels of people entering the labour market than usual during that period, as explored in our August 2020 bulletin and September 2020 bulletin.

While the general trend of pay growth is dominated by those continually employed, the mean pay of people entering the labour market (referred to as inflows) tends to be around 40% lower than mean pay for those continually employed. 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 relatively high 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 March 2022, the 10th percentile of the monthly pay distribution was £685, the 90th percentile was £4,903, and the 99th percentile was £14,333 (Figure 5). This means that:

• 10% of payrolled employees earned equal to or less than £685 per month

• 90% of payrolled employees earned equal to or less than £4,903 per month

• 99% of payrolled employees earned equal to or less than £14,333 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 April 2022, and cover Nomenclature of Territorial Units for Statistics (NUTS): 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 even (Figure 6).

Numbers of payrolled employees in the UK for the regions shown in Figure 6 range from 775,000 in Northern Ireland to 4,187,000 in London in April 2022.

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

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

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

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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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 NUTS1, NUTS2 and NUTS3 regions are available in our accompanying datasets.

Over the course of the coronavirus pandemic, all regions' growth rates followed a similar pattern. Growth rapidly declined and became negative in April 2020, but growth rates have been rising again since the middle of 2021. However, the magnitude of changes varies.

Comparing April 2022 with the same period of the previous year for NUTS1 regions, changes in payrolled employees ranged from a 5.7% increase in London to a 3.6% increase in the East of England.

This month, NUTS1 regions are further broken down by sectors in the supporting datasets for this bulletin. Some sectors show similar growth rates to the region level, while others, such as accommodation and food service activities, and transportation and storage, show moderate regional variation (Figure 7).

For accommodation and food service activities, all regions saw a drop in growth around the beginning of the coronavirus pandemic, with London experiencing the steepest decline. Comparing April 2022 with the same period of the previous year, changes in payrolled employees for accommodation and food service activities ranged from a 16.4% increase in the West Midlands to a 22.3% increase in London.

For transportation and storage, employee growth has been different across regions. London, the South East, the South West, the North West and Scotland experienced negative growth after April 2020, but this largely returned to positive growth in the later half of 2021.

Figure 7: Employee growth varies by region for sectors such as accommodation and food service activities, and transportation and storage

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

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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Examining NUTS3 regions, Warrington experienced an increase of 1.6% in payrolled employees in comparison with April 2021, and Tower Hamlets experienced an increase of 11.6% (Figure 8).

Figure 8: Growth in payrolled employees varies across the UK

Percentage change on same month in previous year, seasonally adjusted, UK, April 2022

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 April 2022 ranged from £1,751 in Torbay to £3,224 in Wandsworth (Figure 9).

Inner London generally differs from Outer London, with median pay ranging from £2,077 in Enfield to £3,224 in Wandsworth. Median pay in April 2022 for London as a whole was £2,539.

Figure 9: Median pay varies across the UK

Median pay, seasonally adjusted, UK, April 2022

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 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 our accompanying datasets.

The three largest sectors are wholesale and retail, health and social work, and education. These 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 10). 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 comparing early estimates for April with the same period of the previous year, percentage changes in payrolled employees range from positive 0.2% in construction to positive 20.7% in arts and entertainment.

Figure 10: Employee growth has been very different across sectors

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

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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.xlsx

The increase in payrolled employees between April 2021 and April 2022 was largest in the accommodation and food service activities sector (a rise of 333,000 employees) and smallest in the construction sector (a rise of 3,000 employees).

Median pay in April 2022 across the highlighted sectors ranged from £1,089 in the accommodation and food service activities sector to £3,445 in finance and insurance (Figure 12).

Compared with the same month in the previous year, median pay grew fastest in the other service activities sector (positive 9.3%, Figure 13) and slowest in the education sector (positive 2.4%).

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

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

Of the 29.5 million payrolled employees in the UK in April 2022, 94.7% are aged 18 to 64 years.

Between April 2021 and April 2022, there was an increase of 503,000 payrolled employees aged under 25 years. During the same period, payrolled employees aged 50 to 64 years increased by 224,000.

Since 2019, the number of payrolled employees aged 65 years and over has increased at a faster rate than the UK as a whole, with employee growth peaking at 10.8% in January 2020 (Figure 15). This higher growth coincides with the Department for Work and Pensions' phased increase in State Pension age between March 2019 and September 2020, from those aged 65 to 66 years for both men and women. While growth rates fell in this age group during 2020, coinciding with the coronavirus (COVID-19) pandemic, they have now returned to above the UK average.

Conversely, growth in payrolled employees aged under 25 years has undergone a long-term decline since 2017, particularly compared with the UK as a whole. These age groups saw large declines in growth rates during 2020, which were much steeper than those seen in the UK as a whole. Both groups are now seeing positive growth rates, with those aged under 18 years seeing a rise in employee growth to 62.5% in the year to April 2022.

Figure 15: 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 April 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 April 2022 ranged from £409 for those aged under 18 years to £2,443 for those aged 35 to 49 years (Figure 16). 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 2022, the NMW and NLW rates were:

• £9.50 for employees aged 23 years and over

• £9.18 for employees aged 21 to 22 years

• £6.83 for employees aged 18 to 20 years

• £4.81 for employees aged under 18 years

• £4.81 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. It was introduced in 1944 and is now the way most employees pay Income Tax in the UK. This bulletin 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. The release is classed as Experimental Statistics because 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 April 2022 and are seasonally adjusted.

Upcoming change

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

Methodology

Our 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 HMRC's list of those granted pre-release access, can be found on HMRC'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 because 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.

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

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, because this figure is the most subject to revision as payment returns are received and the imputed payments are replaced with actual data.

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.

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 our December 2020 version of this bulletin, we introduced a new revisions policy. For each publication, we incorporate new input data only up to the latest three tax years. Revisions to estimates can potentially be made for up to the last three 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. 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 datasets 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 our Labour Force Survey (LFS) and Average Weekly Earnings can be found in our New methods for monthly earnings and employment estimates from Pay As You Earn Real Time Information (PAYE RTI) data: December 2010 article.

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.