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UK Earnings and Employment Trends: Insights from the September 2025 PAYE RTI Data

It seems likely that payrolled employee numbers have slightly declined to 30.3 million, down 0.4% from last year, highlighting ongoing challenges in certain sectors like hospitality. The evidence leans toward stronger wage growth in public sectors such as health and social work at 11.0%, while private sectors like professional services lag at 3.3%, showing a mixed recovery across industries . Overall unemployment stands at around 4.7%, with employment rates improving to 75.2%, but vacancies continue to fall, suggesting a cooling job market that might make job hunting tougher for some.

Introduction

Imagine starting your day with a cup of tea, checking the news, and seeing headlines about rising wages but fewer jobs – that's the story from the latest UK labour market data. Released on 16 September 2025 by the Office for National Statistics (ONS), the Earnings and Employment from Pay As You Earn (PAYE) Real Time Information (RTI) bulletin gives us a fresh look at how Brits are earning and working. This data, drawn straight from payroll reports to HMRC, paints a picture of a resilient economy with some bumps along the way. Whether you're a worker wondering about your next pay rise or a business owner planning hires, these insights matter. Let's dive in and break it down simply.

What is PAYE RTI and Why Does It Matter?

PAYE RTI is like a real-time snapshot of the UK's job market. Employers send payroll details to HM Revenue and Customs (HMRC) every time they pay staff, and the ONS uses this to estimate employee numbers and earnings. Unlike surveys that might miss details, this covers almost everyone on a payroll – about 30 million people!

Why care? It helps spot trends early. For example, if pay is rising faster than prices, families might feel better off. But if jobs are dropping, it could signal economic slowdowns. In August 2025, early estimates show mixed signals: pay up, but employees down slightly. This could influence everything from government policies to your personal finances.

Key Trends in Earnings

Earnings growth is a bright spot. Median monthly pay hit £2,568 in August 2025, up 6.6% from the year before.

That's better than the 4.8% average regular earnings growth reported in the broader labour market overview.

Adjusted for inflation, real pay is growing too – about 0.7% to 1.2% depending on the measure.

By age, younger workers under 18 earn around £447, while those 35-49 earn over £2,989.

Sectors vary: health workers saw 11% growth, great news for NHS staff, but finance lags.

Employment Shifts

Employment isn't as rosy. Payrolled employees are at 30.3 million, down 127,000 (0.4%) year-on-year.

The wider employment rate is 75.2%, up a bit, but unemployment is 4.7%. Vacancies dropped to 728,000, the 38th straight decline. Regions differ: Northern Ireland gained 0.4%, London lost 0.8%.

Industries like hospitality shed jobs, while health added them.

For tips: If job hunting, focus on growing sectors like health. Update your CV and network on LinkedIn.

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The September 2025 release of the Earnings and Employment from Pay As You Earn Real Time Information (PAYE RTI) bulletin by the Office for National Statistics (ONS) provides a comprehensive, data-driven view into the UK's labour market dynamics.

This monthly update, sourced from HMRC's real-time payroll submissions, offers early indicators of economic health, covering aspects like payrolled employee counts, median earnings, sectoral shifts, regional variations, and age-based breakdowns. Released on 16 September 2025, the bulletin primarily focuses on flash estimates for August 2025, which are based on approximately 85% of available data and are provisional, subject to revisions as more submissions arrive (typically reaching 98-99% completeness in subsequent releases). This report aligns with broader labour market trends outlined in the ONS's UK Labour Market Overview for September 2025, which incorporates data from the Labour Force Survey (LFS) and other sources to provide a holistic picture.

Together, these datasets reveal a market characterised by robust wage growth amid moderating employment levels and persistent vacancy declines, reflecting post-pandemic recovery nuances, inflationary pressures, and policy influences such as minimum wage adjustments.

Understanding PAYE RTI Methodology

To appreciate the data's reliability, it's essential to grasp the methodology. PAYE RTI captures the entire population of payrolled employees in the UK, unlike sample-based surveys that may introduce sampling errors. Employers submit RTI data to HMRC in real time, including details on pay, deductions, and employee characteristics. The ONS processes this to produce seasonally adjusted and non-adjusted estimates, with imputation applied for late submissions – around 15% for the latest month, dropping to 1-2% for earlier periods.

Revisions are common, particularly around tax year ends (e.g., January and February), due to additional data inflows. For instance, the July 2025 employee count was revised from a 8,000 decrease to a 6,000 decrease compared to June 2025. Since July 2022, the imputation model has incorporated seasonal factors and better responsiveness to labour market changes, enhancing accuracy.

Full methodological details are available on the ONS website, ensuring transparency and alignment with international statistical standards.

This approach makes RTI data a leading indicator, often preceding LFS estimates by providing timelier insights. However, it excludes self-employed workers and those not on payrolls, so it's best used alongside other metrics like the Claimant Count or workforce jobs data.

Detailed Analysis of Payrolled Employees

The bulletin reports an early estimate of 30.3 million payrolled employees in August 2025, marking a 0.4% decline (127,000 fewer) from August 2024 and a negligible 0.0% drop (8,000 fewer) from July 2025.

This continues a trend of softening employment, echoing the broader market where payrolled employees fell by 142,000 (0.5%) year-on-year to July 2025.

Over the quarter (May to July 2025), the decline was 0.2% (51,000 fewer), and annually 0.4% (125,000 fewer).

Breaking it down by age groups, 94.5% of employees are aged 18-64. Year-on-year changes show a 79,000 drop for those under 25, possibly due to entry-level job reductions in affected sectors, contrasted by a 59,000 increase for 35-49 year-olds, suggesting mid-career stability.

This could reflect demographic shifts or skill mismatches in the workforce.

Sectorally, the data covers 14 major industries under UK Standard Industrial Classification (SIC) codes. The largest sectors – health and social work, wholesale and retail, and education – comprise about 40% of employees, with an extended group reaching 70%.

Annual changes highlight divergence: health and social work grew by 1.8% (80,000 more employees), driven by public sector investments, while accommodation and food services shrank by 4.1% (90,000 fewer), likely from post-summer slowdowns and cost pressures. Regionally, based on employee residence using NUTS classifications, employee counts range from 810,000 in Northern Ireland to 4,353,000 in London. Year-on-year, Northern Ireland saw a 0.4% rise, while London declined by 0.8%. At finer levels (NUTS3), Westminster dropped 2.9%, and Mid Ulster grew 1.3%; local authorities varied from -4.0% to +1.3% growth.

These disparities underscore urban-rural divides and the impacts of regional economic policies' impacts.

In the wider context, workforce jobs totalled 36.8 million in June 2025, down 0.5% quarterly but up 0.4% annually, with public sector growth at 1.2% (75,000 more).

The employment rate for 16-64 year-olds reached 75.2% in May-July 2025, up quarterly and annually, but this masks underlying fragilities.

This table summarises key employee shifts, illustrating the uneven recovery.

In-Depth Look at Earnings and Wage Growth

Median monthly pay for August 2025 is estimated at £2,568, a 6.6% rise from August 2024, indicating strong nominal growth.

This outperforms the 4.8% regular earnings growth and 4.7% total earnings growth (including bonuses) in May-July 2025 from the Average Weekly Earnings (AWE) data.

Public sector regular pay grew 5.6%, outpacing the private sector's 4.7%, possibly due to union negotiations and funding boosts.

Real terms growth, adjusted for Consumer Prices Index including owner occupiers' housing costs (CPIH), was 0.7% for regular pay and 0.5% for total pay; using CPI, it was 1.2% and 1.0%, respectively.

This suggests wages are finally catching up to inflation, alleviating cost-of-living strains.

Age breakdowns reveal stark differences: under-18s at £447 (often part-time), peaking at £2,989 for 35-49s, then tapering.

Sectorally, finance and insurance lead at £4,085 median pay, while accommodation and food services lag at £1,395.

Annual growth was highest in health (11.0%) and lowest in professional services (3.3%), reflecting demand-supply imbalances.

Regionally, NUTS3 medians range from £2,220 (Isle of Wight) to £3,867 (Wandsworth); London's overall is £3,026, with local authorities from £2,119 (Arran and Cumbrae) to £6,091 (City of London).

These figures highlight London's premium but also inequality pockets.

This table captures earnings highlights, useful for benchmarking.

Unemployment, Inactivity, and Vacancies

Complementing RTI data, unemployment rose to 4.7% in May-July 2025, up quarterly and annually.

Economic inactivity fell to 21.1%, down from previous periods, possibly due to health improvements or policy incentives. Vacancies at 728,000 in June-August 2025 dropped 1.4% quarterly, with declines in 9 of 18 sectors – the 38th consecutive fall. The Claimant Count rose monthly to 1.686 million but fell annually.

These trends suggest a cooling market, where job creation slows but wages hold firm, potentially due to labour shortages in key areas.

Implications and Practical Tips

For workers: With pay rising, negotiate raises using these stats. Job seekers, target the health or public sectors; use sites like Indeed for vacancies.

Businesses: Monitor regional data for hiring; hospitality firms might cut costs or automate.

Economically, this could prompt Bank of England rate decisions or government interventions like skills training.

Historical context: Compared to 2024, wage growth has moderated from peaks but remains positive; employment dips follow post-COVID highs.

For deeper reading, check our internal posts on UK Inflation Trends or Sector Job Growth Strategies. Externally, visit the ONS RTI page or the BBC's labour market analysis.

Conclusion

The September 2025 PAYE RTI data shows resilient wages amid softening jobs, with median pay up 6.6% to £2,568 and employees at 30.3 million, down 0.4%.

Broader metrics like 4.7% unemployment and falling vacancies highlight complexities.