Payrolled employments by nationality

Ten years on from the Brexit referendum and five years into the UK’s points-based immigration system, the composition of London’s non-UK workforce has shifted. This supplement summarises a recent GLA Economics publication providing detailed data and analysis of these trends. It uses data on payrolled employments by nationality, from Pay As You Earn (PAYE) data from HM Revenue and Customs, and on National Insurance number (NINo) registration data from the Department for Work and Pensions.

Employments held by EU nationals continued to fall in 2025, while growth in employments held by Rest of World (RoW) nationals remained positive but slowed markedly from the rapid pace seen in previous years (see Figure A1). The shift sits against a weakening labour market in London with slightly decreasing payrolled employment among London residents.

There were around 4.7 million payrolled employments among London residents in December 2025, 0.8% fewer than a year earlier. Employments held by UK nationals accounted for around 57% of the total (2.7 million) but declined over the year. Employments held by EU nationals, approximately 14% of the total, continued their post-Brexit decline, falling to 677,000. However, employments held by RoW nationals grew to reach around 1.3 million (28% of the total).¹

That left non-UK nationals accounting for 43% of payrolled employments held by London residents in December 2025. This was more than double the UK average (20%), highlighting the capital’s continued concentration of international labour.

There are also important differences across industries in how payrolled employment changed between December 2024 and December 2025. Figure A2 shows that employments held by RoW nationals continued to increase across most sectors of London’s economy. Growth was particularly strong in Hospitality, Administration, and Health and Social Work, sectors that have reported labour shortages in recent years. By contrast, Finance and Insurance was the only major sector to record an increase in employments held by EU nationals during 2025.

The PAYE data are complemented by National Insurance number (NINo) registrations, which are an indicator of migration inflows – mostly for work – rather than the stock of employments. The NINo data shows how the origins of people arriving in London have changed over time.

Our supplementary analysis shows that between 2010 and 2020, National Insurance number (NINo) registrations were dominated by EU nationals. By 2025–2026, however, average annual registrations from EU nationals had fallen by around 88% compared with 2010–2015, while registrations from South Asia had increased by around 80%, making it the largest source region for new registrations (Figure A3). This mirrors the longer-term changes observed in the PAYE data, with employment growth increasingly driven by workers from outside the EU.

Implications

London’s labour market has weakened since early 2024, with slowing job creation and rising unemployment. While employments held by Rest of World nationals continued to increase in 2025, growth has slowed markedly since 2021. Growth in overall payrolled employment in London turned slightly negative between 2024 and 2025, due to declines among UK and EU nationals.

Since the end of free movement in 2021, migration inflows to London have shifted away from the EU towards other regions, particularly South Asia, as shown by NINo registrations.

Immigration reforms introduced in 2024 and 2025 (including higher salary and skills thresholds) may further reduce overseas labour supply. The effects, however, are likely to vary across sectors. Industries with a high reliance on non-UK workers, including Hospitality, Health and Social Work, and Administration, may face greater recruitment challenges, while knowledge-intensive sectors such as Finance & Insurance, Professional Services, and Information & Communication may prove more resilient given their continued ability to attract skilled RoW workers.

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