Developing a new Linked Employer Employee Dataset for the UK

Linked Employer–Employee Datasets (LEED) are a vital part of modern data infrastructure. By linking workers to their employers over time, LEED provides a far richer understanding of labour market and economic dynamics than studying households or businesses alone.

The most advanced systems combine longitudinal administrative and survey data through a comprehensive employer–employee data spine. While this infrastructure exists in the United States and across much of Europe, the UK does not yet have a fully integrated LEED infrastructure.

This project has set out a practical roadmap to establish a LEED dataset for the UK, as outlined in a recent ESCoE Technical Report.

Work is now underway on stage 1 of the roadmap. Alex Bryson and John Forth are collaborating with colleagues in the Economic Microdata Transformation team at the Office for National Statistics to build the core LEED spine by securely linking PAYE payroll data with the Longitudinal Business Database. This will create a robust system connecting workers and firms over time.

The team will document the dataset, produce new statistics on job moves, business change and pay progression, and seek funding to expand the infrastructure in later stages.

The LEED project has four methodological dimensions:

• Construction of a LEED spine linking the quarterly ONS Longitudinal Business Database (LBD) to the calendarised monthly PAYE RTI data created by the ONS Data Development Unit.
• Production of new statistics on worker and job flows by using payroll data to identify the entry and exit of individual workers to/from each firm. It enables the ONS to generate internally consistent measures of hires, separations, job creation, and job destruction at the enterprise and aggregate level.
• Production of new statistics on earnings dynamics by combining measures of worker flows with PAYE data on earnings. This allows one to decompose earnings growth at the mean (or at different points of the earnings distribution) into the contributions from: changes in hiring wages, earnings losses of displaced workers, earnings growth arising from job-to-job moves, and earnings growth among those who remain in the same job.
• Linking additional data to the LEED spine including ONS-held data on employees (e.g. Census) and employers (e.g. Annual Business Survey).

Our feasibility report sets out a roadmap for the development of this new LEED infrastructure:

• Stage 1: Utilise the PAYE RTI data to develop a LEED spine which will provide unique and time-consistent identity linkages for employees and employers, allowing workers and firms to be tracked over time.
• Stage 2: Develop linkages from the LEED spine to a range of existing administrative and survey data sources, so that additional data on employers and employees can be added to the spine.
• Stage 3: Use the spine as a sampling frame for new employer-employee surveys, so that gaps in our existing measurement of the employer-employee relationship can be addressed.

Impact at the UK Office for National Statistics

The project directly supports the priorities set out in the Office for National Statistics Strategic Business Plan (April 2025–March 2026), particularly the commitment to strengthen labour market statistics and expand the use of linked data to inform evidence-based policymaking.

ONS plans to use LEED to link HMRC tax data, the Inter-Departmental Business Register, and survey data to build a richer picture of wages and employment across the UK. A well-documented, accessible LEED infrastructure will support delivery of the Plan for ONS Economic Statistics and the ONS Survey Improvement and Enhancement Plan, especially in relation to labour market statistics and business surveys.

Crucially, LEED will enable the production of new indicators on job-to-job flows, pay progression and employment dynamics. These measures will improve how labour market conditions are understood and communicated, revealing the dynamics that sit beneath headline trends.

Wider impact

The resulting evidence will be valuable to departments including HM Treasury and Department for Business and Trade, as well as the Bank of England. By shedding light on business dynamism and employment reallocation, LEED will help policymakers better understand changes in economic performance and resilience.

Beyond official statistics, the LEED infrastructure will unlock a wide range of future economic and social science research on productivity, wage growth, inactivity, job quality and business dynamism, significantly strengthening the UK’s labour market evidence base for years to come.

Read more about the impact of this project in this case study

Forth, J., Bryson, A., Palmou, C. ‘A roadmap for developing a new Linked Employer-Employee Data Infrastructure‘ ESCoE blog, 16 June 2025.

Forth, J., Bryson, A., Palmou, C. ‘A roadmap for developing a new Linked Employer-Employee Data Infrastructure‘ ESCoE Technical Report, TR 28, 16 June 2025.

Forth, J. ‘Low pay in the UK: Are estimates reliable?‘ ESCoE blog, 19 September 2024.

Forth, J., Bryson, A., Phan, V., Ritchie, F., Singleton, C., Stokes, L., Whittard, D. ‘Revisiting sample bias in the UK’s Annual Survey of Hours and Earnings, with implications for estimates of low pay and the bite of the National Living Wage‘, ESCoE Discussion Paper, ESCoE DP 2024-10, 19 September 2024.