This article examines total bonus payments received across the whole economy in 2012/13 with analysis presented by month of pay, sector and industry. The industry level contribution to the change in whole economy bonus payments between 2011/12 and 2012/13 is also analysed as is the average bonus payment per employee.
Total bonus payments received across the whole economy during the financial year April 2012 to March 2013 were £36.9 billion, an increase of 1% compared with the same period in 2011/12. This equates to an average of around £1,400 per employee.
Of the £36.9 billion paid in bonuses in 2012/13, £13.3 billion was paid in the finance and insurance industry, virtually unchanged from the previous financial year. The increase in bonus payments for the whole economy was driven by the rest of the economy, which experienced a 1% increase in bonuses. Total bonus payments received in the rest of the economy in 2012/13 were £23.6 billion, almost as high as bonus payments in 2007/08, when bonus payments were at their peak.
However, a number of businesses responding to the Monthly Wages and Salaries Survey (MWSS) reported that they paid their bonuses in March last year but in April this year. Thus, it is useful to also examine bonus payments paid in the period May to April to present a complete picture of how bonus payments changed between 2011/12 and 2012/13.
Using this method, total bonus payments received across the whole economy during the period May 2012 to April 2013 was £38.6 billion; an increase of 4% compared with a year earlier. The average bonus per employee at whole economy level during this period was £1,500. Of the £38.6 billion, £14.0 billion was paid in the finance and insurance industry, also a 4% increase over the year.
Usually, the majority of large bonuses are generally paid in the period December to March each year, mainly, but not exclusively, in the finance and insurance industry. This period is sometimes referred to as “bonus season”. Seventy-two per-cent of total bonuses paid in the finance and insurance industry in 2012/13 were paid during this period.
Bonus payments paid in the rest of the economy between December 2012 and March 2013 represented 43% of total bonuses, with the majority of the bonuses paid in March. This means that the “bonus season” is less significant in the rest of the economy than in the finance and insurance industries.
Figure 2 demonstrates the extent to which the usual definition of “bonus season” did not apply in 2012/13, with April 2013 seeing unusually high levels of bonus payments. Total bonus payments paid in the finance and insurance industry were £1.3 billion in April 2013 compared with £0.6 billion paid in April 2012. Similarly, total bonus payments paid in the rest of the economy were £2.9 billion in April 2013 compared with £1.9 billion paid in April 2012.
Thus, bonus payments paid in the whole economy were £1.7 billion higher in April 2013 compared with April 2012. The increase in bonus payments in April 2013 partly reflects the deferrals of bonus payments by some businesses which reported that they had chosen to pay the bonuses usually paid in March in April this year. This is also seen in reduction in bonus payments in March 2013 for the rest of the economy as bonus payments peaked at £4.2 billion in March 2013 compared with a peak of £4.9 billion in March 2012. However, the finance and insurance sector peaked at £3.7 billion in March 2013 compared with a peak of £3.5 billion in March 2012.
Figure 3 shows the contribution each of the 24 industries made to the change in whole economy bonus payments between 2011/12 and 2012/13.
Information and communication made the largest positive contribution to bonus payments in the 2012/13 financial year. This industry experienced a £0.3 billion growth in total bonuses between 2011/12 and 2012/13. Retail trade and repair and transport and storage also contributed towards the overall increase of bonus payments, each contributing £0.2 billion.
Professional, scientific and technical activities made the largest negative contribution to bonuses; contributing -£0.2 billion to whole economy bonus payments.
In 2012/13, most industries saw either a slight decrease in the average bonus per employee or the average bonus stayed the same compared with the financial year 2011/12. The whole economy average bonus per employee was £1,400, unchanged from the 2011/12 level. This means that the slight increase in bonus payments across the whole economy was offset by increases in the workforce. In other words, the slightly bigger bonus in 2012/13 was shared around slightly more people.
The average bonus per employee in the finance and insurance industry was £11,900. This was a decline of £100 compared with the average bonus received by financial sector workers in 2011/12. Mining and quarrying (including oil extraction and exploration) was the industry with the second highest average bonus, with an average bonus per employee of £6,700. This was a decrease of £200 compared with the average bonus per employee received in 2011/12.
The lowest bonuses per employee were paid in the Education and Health & Social Work industries, where the bonuses per head figures were negligible.
In 2012/13, the average private sector employee received £1,700 in bonuses, approximately six times higher than the average public sector worker’s bonus of £300. However, private sector workers are on average in receipt of lower regular pay than people working in the public sector; bonuses are a more significant part of total pay in the private sector. If financial services – which include the temporarily nationalised banks – are removed from the public sector, the average public sector worker’s bonus falls to £100 in 2012/13.
|Financial and insurance activities||12.0||11.9|
|Mining and quarrying||6.9||6.7|
|Information and communication||4.4||4.4|
|Manufacturing: Chemicals and man made fibres||2.3||2.4|
|Professional, scientific and technical||2.3||2.1|
|Electricity, gas and water supply||2.0||1.8|
|Manufacturing: Engineering and allied industries||1.2||1.2|
|Manufacturing: Basic metals and metal products||1.0||1.0|
|Retail trade and repair||0.8||0.9|
|Manufacturing: Food, beverages and tobacco||0.9||0.8|
|Transport and storage||0.6||0.8|
|Manufacturing: Textiles, leather and clothing||0.6||0.8|
|Administrative and support services||0.8||0.7|
|Arts, entertainment and recreation||0.6||0.7|
|Agriculture, forestry and fishing||0.5||0.4|
|Accommodation and food services||0.3||0.3|
|Health and social work||<0.1||<0.1|
|Public sector excluding financial services||0.1||0.1|
All figures are derived from the Average Weekly Earnings (AWE) dataset, part of the Labour Market Statistics release: www.ons.gov.uk/ons/taxonomy/index.html?nscl=Labour+Market
The data do not include the Armed Forces, government–supported trainees or the self employed.
These figures are not seasonally adjusted. This means that seasonal patterns are included in the estimates.
These figures are not adjusted for inflation.
Supplementary analysis for May to April 2013 is available in the data section of this publication.
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These National Statistics are produced to high professional standards and released according to the arrangements approved by the UK Statistics Authority.