UK workers contributed £258.9bn in PAYE income tax in 2024/25, up 9.1% from £237.3bn the previous year, according to research from the Global Payroll Alliance.
The figure is the highest in two decades and marks the fourth consecutive year of growth. Since 2004, annual PAYE contributions have increased 138%. PAYE now accounts for 85.5% of all income tax contributions and 30.1% of total HMRC receipts, the highest proportion since 2004.
The rise comes as UK employment figures have grown. The number of people aged 16 and over in employment increased from 33.5m in 2021 to 33.6m in 2024, and reached 34.2m in Q2 2025. The employment rate for those aged 16-64 rose from 74.5% in Q1 2024 to 75.3% in Q2 2025.
Job vacancies, however, have fallen sharply. Total vacancies dropped 16.5% between 2023 and 2024, from 911,000 to 761,000, with most of the decline in the services sector. By Q2 2025, vacancies had fallen further to 636,000.
Melanie Pizzey, CEO and founder of the Global Payroll Alliance, said: “The continued growth in PAYE contributions underlines just how essential payroll processes are to the UK economy. With nearly £260 billion passing through PAYE last year alone, it’s vital that companies ensure their payroll systems are both accurate and compliant. As we’ve seen, even with slight shifts in employment rates and job vacancies, PAYE remains a critical pillar of the UK’s tax infrastructure, and that places a major responsibility on employers to get payroll right.”