PAYE headcount down more than 160,000 since Autumn Budget
The latest analysis from the Global Payroll Alliance (GPA) reveals that since last October’s Autumn Budget, the number of PAYE employees in the UK has fallen by more than 160,000 as businesses grapple with the staffing cost implications resulting from increased Employer National Insurance Contributions (NICs).
See how the Autumn Budget has affected the PAYE workforce in your area, here
As part of the Labour government’s Autumn Statement (October 2024), it was announced that, from April 2025, Employer NICs would be increased from a rate of 13.8% to 15%. As a result, the staffing cost for businesses large and small has increased significantly. To combat these rising expenses, businesses started cutting employee headcounts and scrapping future hiring plans ahead of the April deadline.
In fact, GPA’s new analysis reveals of PAYE government payroll data* that since the Budget statement, the number of PAYE employees has fallen by -0.53%. While this might seem like a negligible decline, it actually means that the number of PAYE employees in the UK has been reduced by more than 163,000 (Oct 24 – July 25, latest available).
Some regions have seen greater reductions than others. London alone has seen a drop of -44,575, equivalent to a -1.01% decline in the local PAYE workforce.
In the North West, numbers have fallen by -22,398 (-0.67%), and in the West Midlands the decline totals -19,347 (-0.73%).
The number of PAYE workers has also fallen by more than -10,000 in Yorkshire & Humber (-17,139), the South East (-12,722), and East of England (-10,306).
Only one part of the UK has escaped this widespread decline and that’s Northern Ireland where the PAYE workforce has grown by 4,285 (0.53%).
Melanie Pizzey, CEO and founder of the Global Payroll Alliance, says: “A reduction of over 160,000 PAYE employees is far from negligible – it’s a clear signal that rising employment costs are reshaping workforce strategies across the UK. The increase in Employer National Insurance Contributions may have been intended to support public finances, but it has also added significant financial pressure on businesses already navigating inflation, wage growth, and economic uncertainty.
Employment is one of the key engines of economic growth, driving consumer spending, productivity, and regional development. If this trend continues, we risk weakening the very foundation needed for recovery and long-term prosperity. Lower employment levels don’t just impact individuals – they affect the tax base, slow down demand, and reduce overall confidence in the business environment.
This data should prompt serious reflection from policymakers. While supporting public services is crucial, it must be balanced against the real-world implications for job creation and business resilience. Going forward, restoring growth in employment will be essential if the UK is to remain competitive and economically stable in the years ahead.”
Data tables and sources
Full data tables can be viewed online, here.