HMRC gender pay gap report and data 2020
Published 15 December 2020
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Introduction
As HMRC’s Gender Champion and Chief People Officer, I am pleased to publish our 2020 gender pay gap report.
This coincides with the refresh of our Equality, Diversity and Inclusion (EDI) Strategy for 2020 to 2024 which has a clear focus on expecting all colleagues to actively consider equality, diversity and inclusion in everything we do.
Our EDI strategy focusses on creating an inclusive, respectful and representative workplace that reflects the society we serve, where all colleagues are able to thrive, and where difference is valued. We will do this through actively attracting and retaining colleagues from diverse backgrounds and each of us taking personal responsibility and holding one another to account through our systems and behaviours.
Embedding equality, diversity and inclusion into everything we do isn’t just the right thing to do – we know that diverse teams lead to better decision making and improved outcomes. Having a representative, balanced and diverse workforce is essential to creating a great place to work for all our colleagues.
I am delighted therefore that we have improved on our gender pay gap and bonus pay gap from last year. The mean gender pay gap is 4.4%, and the median gender pay gap is 5.9%; the mean bonus gap is 0.6% and the median bonus gap is 0%.
Our gender pay gap is related to workforce distribution because women are over-represented in more junior grades, where pay is lower (see Table 1). Increasing the representation of women in more senior roles reduces our pay gap.
In the last year, we have seen increases in the proportion of women of 2.2% at Higher Officer grade, 2.9% at Senior Officer grade, 8.4% at Grade 7, 6.8% at Grade 6 and 6.7% in our Senior Civil Service grades. These increases in the proportion of women in more senior roles has reduced our gender pay gap.
When we consider the gender pay gap by part-time and full-time working, both the mean and median gap is higher for part-time colleagues than full-time colleagues (see Annex C). This is because more women than men work on a part-time basis in our lower paid grades. One of our actions is to raise awareness of the flexibilities available to men and women at all grades through part-time working and job-share (action 1).
We have reduced our gender pay gap for bonuses by improving our in-year reward system, and we will continue to monitor the impact of our changes. In addition to monitoring, we will be including analysis of our pay and bonus gap data by grade in our wider policy improvement work (see action 2).
I am committed to deepening our understanding of why we have any gender pay gap and taking action to close any unfair gaps. We have embedded pay gap reduction actions into work already being undertaken to review and improve policies and processes, and are enabling managers and colleagues to make informed and actively inclusive decisions.
We will also review how we develop our talent to identify where we might target support at specific points in the pipeline.
To further work towards gender equality, it is important that we continue to be led by insight and remain focussed on outcomes. We have recently made our departmental diversity data more accessible to all colleagues. We intend to work with and support our Regional Centre Change Leads and Customer Group EDI leads to use diversity data to inform their decision making and action planning, and to review it to measure the impact of their interventions (see action 3).
Finally, a note about coronavirus (COVID-19). We recognise there may be specific and negative effects of the crisis on individuals, and this may have more impact on carers for example, more of whom are women; and we recognise that there are also positives as a result of the added flexibility of working from home. We will ensure that we continue to seek feedback from our staff networks about this as we shape our future strategy.
Our aim longer-term is to provide flexibility where we can, and although there is more work to do on this over the coming months before we make decisions, we will take the opportunity to review how we will work in the future, and actively seek to retain a more diverse workforce.
Collectively, the actions developed as a result of this gender pay gap report reflect our broader approach to embed consideration of equality, diversity and inclusion into our decision-making and make HMRC a great place to work where we celebrate and champion gender equality.
Esther Wallington, Chief People Officer, HMRC
Overview
In 2017, the government introduced legislation that made it a statutory requirement for organisations with 250 or more employees to report annually on their gender pay gap. Government departments are covered by the Equality Act 2010 (Specific Duties and Public Authorities) Regulations 2017, which came into force on 31 March 2017.
These regulations underpin the Public Sector Equality Duty and require relevant organisations to publish their gender pay gap by 30 March annually. This includes:
- the mean and median gender pay gaps in hourly pay
- the mean and median gender bonus pay gaps
- the proportion of male and female relevant employees who received bonuses
- the proportion of male and female full-pay relevant employees in each pay quartile
The gender pay gap is a measure of the difference between men’s and women’s average earnings across an organisation of the labour market. It is expressed as a percentage of earnings for men.
If a workforce has a particularly high gender pay gap, this can indicate there may be a number of issues to deal with, and the individual calculations may help to identify what those issues are.
The gender pay gap is different to ‘equal pay’. Equal pay legislation deals with unlawful pay differences between men and women who do equal work. That means they carry out the same jobs, similar jobs or work of equal value.
We have not included contractors, who are on HMRC’s payroll and provide a personal service to HMRC. Under the Equality Act 2010 (2017 regulations, schedule 1, paragraph 2(3)), we are not required to include data relating to a relevant employee if the employee is under a contract personally to do work, and the public authority does not have, and it is not reasonably practicable for the public authority to obtain, the data.
Pay elements used in the calculation include allowances, whereas voluntary salary sacrifice for childcare vouchers and cycle to work schemes are excluded.
HMRC supports the fair treatment and reward of all our people irrespective of gender through our values of:
- being professional
- acting with integrity
- showing respect
- being innovative
This report gives the gender pay gap data in HMRC as at 31 March 2020 and covers 64,662 employees as defined by Regulation 2(1) of the Equality Act 2019 (Specific Duties and Public Authorities) Regulations 2017.
Our calculations followed the legislative requirements and we confirm the data reported is accurate.
Organisation structure and pay
HMRC uses the standard Civil Service grading system ranging from Administrative Assistant (AA) to Senior Civil Service (SCS), plus a Training grade covering our tax programmes.
Since 2019, HMRC has reduced its workforce by 159 with the largest decreases in our AA and Administrative Officer (AO) grades.
Women continue to be over-represented in more junior grades, where pay is lower, and under-represented in more senior grades.
Table 1: HMRC Data as at 31 March 2020 showing relevant employees
| Grade (increasing seniority) | Number of men (% of men who work in this grade) | Number of women (% of women who work in this grade) | % Women |
|---|---|---|---|
| AA/AO | 9,299 (31.3%) | 14,069 (40.3%) | 60.2% |
| Officer (O) | 6,786 (22.8%) | 8,397 (24.0%) | 55.3% |
| Higher Officer (HO)/Senior Officer (SO) | 9,415 (31.7%) | 9120 (26.1%) | 49.2% |
| Band T | 360 (1.2%) | 265 (0.8%) | 42.4% |
| Grade 7/6 | 3659 (12.3%) | 2,867 (8.2%) | 43.9% |
| SCS | 217 (0.7%) | 190 (0.5%) | 46.7% |
| non-grade | 9 (0.03%) | 9 (0.03%) | 50.0% |
| Total | 29,745 | 34,917 | 54.0% |
Delegated grades - AA to Grade 6
As a Civil Service department, HMRC is governed by public sector pay policy as set out in the Civil Service Pay Guidance for delegated grades. The Senior Civil Service (SCS) is covered by separate SCS pay guidance published by government.
The pay guidance defines the overall financial parameters for Civil Service pay awards each year to ensure that these pay awards are consistent with the government’s overall objectives.
In HMRC, the AA grade consists of a single spot rate of pay, whereas grades AO to Grade 6 each have basic pay ranges consisting of a minimum and maximum rate of basic pay. There are no target rates, steps or progression points within the pay ranges. Upward movement within the pay ranges is via annual pay awards.
Given our geographical offices across the United Kingdom, each grade has 2 basic pay ranges, London and national. The split between men and women on the London pay range is 49.6% and 50.4% favouring male employees. The national pay range split is 54.7% and 45.3% favouring female employees.
Out of the whole female workforce, 12.1% of women are on the London pay range, an increase of 0.2% from 2019. In the male workforce 14.4% of men are on the London pay range, a decrease of 0.3%.
HMRC’s settlement date for annual pay awards is 1 June. For 2019 a consolidated award was paid to all our people, irrespective of performance and gender.
Our in-year reward system compromises of 3 reward schemes:
- Simply Thanks vouchers of £20 for appreciation of good work and positive behaviours
- Recognition Award for exceptional short-term performance-
- High Performance Award for exceptional sustained performance leading to positive results typically up to a 6-month period. This particular reward scheme will be non-consolidated and non-pensionable. The line of business/directorate of the individual decide the award amount up to an overall maximum limit for the grade
Dependant on the nature of the work undertaken in certain roles, we may also pay additional allowances or supplements, which together with the basic pay forms the annual salary.
The value of the pay awards is negotiated with our two recognised trade unions. This does not include receipt of any of the 3 reward schemes mentioned above.
Senior Civil Service
Pay and grading for the SCS across the Civil Service are governed by the Cabinet Office.
The SCS structure consists of 3 grades: Deputy Director (SCS1); Director (SCS2); and Director General (SCS3), and each grade has a set pay range with a minimum and maximum rate of basic pay.
The settlement date for annual pay awards is 1 April, and for 2020 the award comprised 3 elements:
- a consolidated award paid to all our people in the SCS
- a non-consolidated, non-pensionable award linked to exceptional (moderated) performance against objectives for the performance year 2019 to 2020
- a non-consolidated, non-pensionable award linked to short-term exceptional performance during the year
The parameters for SCS pay in HMRC are managed by the Cabinet Office.
Gender pay gaps
Gender composition
Image showing that females make up 54% of the workforce at 34, 917, down by 1.6% from 2019, and males make up 46% at 29, 745, up by 0.8%.
2020 gender pay gaps in hourly pay
Mean pay gap
Image showing the mean hourly rate is £14.09 for females and £14.74 for males, a gap of 4.4%. This is a reduction of 2.8% from 2019.
Median pay gap
Image showing the median hourly rate is £12.60 for females and £13.39 for males, a gap of 5.9%. This is a reduction of 3.4% from 2019.
HMRC’s gender pay gaps in hourly pay have reduced this year. This is due to more women having been promoted or recruited to higher grades.
Compared to 2019, there was an increase of 2.2% of women in the Higher Officer (HO) grade, 2.9% increase of women in the Senior Officer (SO) grade, 8.4% increase of women in Grade 7 and 6.8% increase in Grade 6. There was an increase of 6.7% of women in SCS from last year.
Part-time employees make up 30% of the overall workforce of which 77.7% are women. 92.7% of part time colleagues are based outside of London of which 78.1% are women and 51.4% of the part time workforce are of AO grade of which 41.3% are women.
The mean gender pay gap is 1.2% for full-time employees which is a 0.7% reduction from 2019. The mean gender pay gap for part-time employees is 9% which is a 4.6% decrease from 2019. The median gender pay gap is 2.9% for full time employees and 15.3% for part time. This is an overall positive reduction of 0.4% and 3.5% respectively from 2019.
The pay gap varies by location (see Annex A) as well as working pattern and the distribution of women by grade and we are working to understand the influence of each factor to inform our actions to close gender pay gaps.
Proportion of men and women by pay quartiles
Table 2 shows the proportion of full-time female and male relevant employees in each pay quartile.
The pay quartiles are created by ranking each full-time employee in order from lowest earning (first quartile) to highest earning (fourth quartile).
The pay quartiles broadly reflect the uneven distribution of women through the grades in HMRC, meaning that proportionally more women than men are in lower paid grades.
We will look further into the data and roles that are represented in these quartiles, to identify any unjustifiable disparities and develop actions accordingly (action 4).
Table 2: pay quartiles
| Quartile | Female % | Male % |
|---|---|---|
| First (lower) quartile | 52.0 | 48.0 |
| Second quartile | 59.7 | 40.3 |
| Third quartile | 55.3 | 44.7 |
| Fourth (upper) quartile | 47.9 | 52.1 |
Bonus pay gap data
2020 bonus pay gaps
Image showing the mean bonus pay gap between males and females is 0.6%, a reduction of 3.3% from 2019.
Median bonus gap
Image showing the median bonus pay gap percentage between males and females is 0%, the same as 2019.
Image showing 61.8% of females and 62.8% of males received a bonus in 2020. This was down by 0.2% for females and up by 0.2% for males from 2019.
For bonus pay we captured data for the 12-month period between 1 April 2019 and 31 March 2020 from our in-year and end-year reward schemes.
HMRC’s bonus pay gap have decreased this year as 61.8% of women and 62.8% of men received a bonus. This is an increase from 2019 whereby 61.3% of women and 61.8% of men received a bonus. We believe this is due to our much improved in-year reward system.
The system allows individuals to be rewarded for exceptional performance in real-time whereas the previous system, which was phased out in June 2018, looked at performance as assessed at the year end.
HMRC follows the standard public sector approach to pay and reward, and an agreed fund is reserved for payment of non-consolidated, non-pensionable awards linked to performance. As mentioned before there are 3 reward schemes:
- Simply Thanks vouchers of £20 for appreciation of good work and positive behaviours
- Recognition Award for exceptional short-term performance
- High Performance Award for exceptional sustained performance leading to positive results typically up to a 6-month period
Our bonus systems are all gender neutral by design. However, the larger female workforce in the lower pay grades drives our mean gender bonus pay gap, in the same way that it drives our mean gender hourly pay gap.
This of course changes when you look by grade, so that the bonus gap for AAs is 11.4% in favour of men and for Grade 7s it is -10.9% favouring women. Please see Annex B for all other grades.
At HMRC we are proud to enable our people to work alternative working patterns including reduced hours if it suits their lifestyle. However, this does not impact upon the bonus pay gaps, as year-end bonuses are pro-rated for people work part-time.
As with last year, the median gender bonus pay gap remains at 0%, which is due to the large number of Simply Thanks vouchers that we issued during the year (Simply Thanks made up 60% of all bonuses).
Progress since the 2019 report
Performance management
Following a review of our performance management system we introduced a fundamentally new approach called Performance and Development Conversations (P&DCs) in July 2018 for our people in grades AA to Grade 6.
The new approach aims to encourage, support and improve the quality of conversations between managers and their people that focus on the how of performance, as well as development, progress, aspirations and wellbeing. More positively, there are no overall performance ratings, which removes perceptions of bias and increases opportunities for development, engagement, and productivity.
Managers and employees have regular conversations and are asked to record these on the system at least every quarter. We are currently planning to review how P&DC is operating across HMRC, working with the P&DC leads in each part of the business. This may lead to further improvements to the policy and system over the next 12 months.
Reward and Recognition
To support our new P&DC approach, we have our in-year reward schemes. In particular, we set upper limits by grade for the High-Performance Award, and the short-term Recognition Award has 3 fixed rates, which means that the award is received in full by people who work part-time.
Of the female workforce, 43.2% are part time which make up 23.3% of the entire workforce. Of the male workforce, 14.5% are part time meaning a 0.7% decrease from 2019.
Equal Pay Audit
HMRC conducts an equal pay audit every 3 years. The 2019 report is due to be published soon after the publication of this Gender Pay Gap report.
Talent and development programmes
In HMRC we celebrate diversity and recognise that our people don’t all want the same things from their careers. Considering this, we provide a wide range of opportunities to help colleagues to be the best they can be and to progress, whether to more senior roles, or other roles in HMRC or the Civil Service.
To support this, accessibility of our offer is at the heart of our thinking around our talent and development programmes. Internally we run the Spring, Leap and Ascend programmes, which are now all delivered using digital classrooms (and prior to lockdown these were run using a mixture of regional and digital events).
We continue to value the inclusivity of our programmes and have put this at the heart of their design, making sure that people of all backgrounds, locations, and professions are encouraged to take part.
Across government we continue to work with Civil Service Talent in the Cabinet Office to increase the regional offer for the centrally-run Civil Service wide Future Leaders Scheme and Senior Leaders Scheme programmes.
We have also been working on developing our supporting offer as a department to supplement these cross-government programmes and provide further opportunities for individuals, many of which will be virtual in the current climate. Through this work our aim is to provide an offer that is accessible to all our people and that recognises the challenge for colleagues with caring responsibilities to otherwise participate.
Flexible working
We continue to support people who wish to work more flexibly across all grades, particularly where representation of women is lower. Most roles are available as job-share, reduced hours or flexible working patterns.
We continue to learn from our experience of COVID-19 and are exploring how we can sustain greater permanent flexibility across our workforce, particularly for colleagues in exit schemes who are unable to travel to regional centres where a significant proportion are female.
Smarter working
To give all colleagues more choice and a better experience in how, where and when they work, we have invested significantly in mobile technology, launched our Smarter Ways of Working standards and improved our digital skills.
Colleagues are able to consider a range of remote and flexible working options including varying start and finish times as well as working remotely, including from home, to help support wellbeing, caring responsibilities and work-life balance.
Wellbeing
Through the health and wellbeing campaigns we support and promote, we remind colleagues of all the wellbeing support and services which are available to everyone. We continue to raise awareness of work-life balance and caring responsibilities, regardless of sex.
Working with our provider for our Employee Assistance Programme, we have introduced 2 workshops on men’s health and women’s health, to build awareness of common gender associated health issues and offer advice on how to look after your body and mind.
We continue to work towards creating a culture where colleagues and managers feel confident to talk openly about health concerns and we have embedded this into our performance management approach, encouraging regular conversations about personal wellbeing and establishing what support may be needed.
Data from our annual survey [Civil Service People Survey; December 2019] shows a very small difference between the sexes in the ‘flourishing at work’ scores [PERMA index], with women reporting a score of 72%, 3% higher than men. Working closely with our colleague-led gender network, gives us valuable insights to enable targeted wellbeing activity to maximise positive impacts for both sexes.
With even greater focus on colleague wellbeing this year during the COVID-19 pandemic, we have provided additional support and advice, created new wellbeing products, and further promoted the services available to all.
SCS locations
We are actively increasing the number of SCS roles outside of London, and therefore developing career opportunities across the regions. We currently have 4 SCS roles filled by job-share (3 at SCS 1 level and one at SCS 3 level) and this is always considered as part of our vacancy planning process at SCS. There are 6 women and 2 men – all job share roles involve at least one woman (no job share role is totally covered by men).
Specific actions
-
We will profile and encourage flexible and part time working for men and women in our communication campaigns, to build a more inclusive workplace.
-
We will ensure gender equality is actively considered as part of our policy improvement activity, particularly in our review of how performance and development conversations are operating across HMRC and in ensuring gender parity throughout recruitment and selection processes.
-
We will work with and support Regional Centre leads and Customer Groups to take an evidence-based approach to identifying and addressing any gender imbalances in their areas.
-
We will evaluate the effectiveness of our talent development activities and target interventions to identify, understand and address points in the pipeline where the proportion of women decreases.
-
We will proactively consider gender and grade as part of our planned work to analyse bonus data, to identify if manager discretion could lead to bias in outcome.
Annex A: 2020 HMRC gender pay gap results by location
| London | National | |
|---|---|---|
| Mean gender pay gap - Ordinary pay | 4.8% | 3.1% |
| Median gender pay gap - Ordinary pay | 8.9% | 6.1% |
| Mean gender pay gap - Bonus pay in the 12 months ending 31 March | 1.7% | -0.2% |
| Median gender pay gap - Bonus pay in the 12 months ending 31 March | 9.1% | 0.0% |
| The proportion of male employees paid a bonus in the 12 months ending 31 March | 62.7% | 62.8% |
| The proportion of female employees paid a bonus in the 12 months ending 31 March | 61.6% | 61.8% |
Proportion of male and female full pay relevant employees in each quartile.
| Quartile | Female % | Male % | Female % | Male% |
|---|---|---|---|---|
| First (lower) quartile | 55.6% | 44.4% | 49.0% | 51.0% |
| Second quartile | 51.9% | 48.1% | 62.6% | 37.4% |
| Third quartile | 44.7% | 55.3% | 54.5% | 45.5% |
| Fourth (upper) quartile | 44.8% | 55.2% | 51.5% | 48.5% |
| Total Staff | London | National |
|---|---|---|
| Female | 4,230 | 30,678 |
| Male | 4,294 | 25,442 |
| Total | 8,524 | 56,120 |
Annex B: 2020 HMRC gender pay gap results by grade
| % - AA | % - AO | % - O | % - HO | % - BT | % - SO | % - G7 | % - G6 | % - SCS | |
|---|---|---|---|---|---|---|---|---|---|
| Mean gender pay gap - ordinary pay | -6.5% | -6.4% | -4.6% | -2.1% | -0.9% | -0.5% | -1.7% | 0.8% | 0.2% |
| Median gender pay gap - ordinary pay | -13.5% | -11.0% | -12.3% | -8.6% | 0.0% | -0.9% | -8.5% | 0.0% | 3.1% |
| Mean gender pay gap - bonus pay in the 12 months ending 31 March 19 | 11.4% | -1.0% | -6.6% | -6.7% | 10.5% | -5.1% | -10.9% | -10.2% | 2.7% |
| Median gender pay gap - Bonus pay in the 12 months ending 31 March 19 | 7.7% | 0.0% | -25.0% | -10.0% | 0.0% | 0.0% | -6.7% | -23.5% | -11.6% |
| Proportion of male employees paid a bonus in the 12 months ending 31 March 19: | 55.2% | 52.9% | 64.2% | 68.7% | 54.7% | 73.3% | 70.5% | 67.1% | 17.5% |
| Proportion of female employees paid a bonus in the 12 months ending 31 March 19 | 54.7% | 51.5% | 65.3% | 69.2% | 58.5% | 78.1% | 72.2% | 68.8% | 25.3% |
Proportion of male and female full pay relevant employees in each quartile.
| AA | AO | O | HO | BT | SO | G7 | G6 | SCS | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Quartile | Female % | Male % | Female % | Male % | Female % | Male % | Female % | Male % | Female % | Male % | Female % | Male % | Female % | Male % | Female % | Male % | Female % | Male % | |
| First (lower) quartile | 25.7% | 74.3% | 40.4% | 59.6% | 44.3% | 55.7% | 43.7% | 56.3% | 45.2% | 54.8% | 46.2% | 53.8% | 38.6% | 61.4% | 41.7% | 58.3% | 50.0% | 50.0% | |
| Second quartile | 48.8% | 51.2% | 46.8% | 53.2% | 45.1% | 54.9% | 43.5% | 56.5% | 40.9% | 59.1% | 49.0% | 51.0% | 40.2% | 59.8% | 41.7% | 58.3% | 48.0% | 52.0% | |
| Third quartile | 83.7% | 16.3% | 74.2% | 25.8% | 63.0% | 37.0% | 56.6% | 43.4% | 42.6% | 57.4% | 49.3% | 50.7% | 50.3% | 49.7% | 42.5% | 57.5% | 41.0% | 59.0% | |
| Fourth (upper) quartile | 70.3% | 29.7% | 78.0% | 22.0% | 67.7% | 32.3% | 53.3% | 46.7% | 40.9% | 59.1% | 51.2% | 48.8% | 46.9% | 53.1% | 44.3% | 55.7% | 44.0% | 56.0% |
| Total staff | AA | AO | O | HO | BT | SO | G7 | G6 | SCS |
|---|---|---|---|---|---|---|---|---|---|
| Female | 601 | 13,468 | 8,397 | 6,233 | 265 | 2,887 | 2,127 | 740 | 190 |
| Male | 442 | 8,857 | 6,786 | 6,383 | 360 | 3,032 | 2,667 | 992 | 217 |
| Total | 1,043 | 22,325 | 15,183 | 12,616 | 625 | 5,919 | 4,794 | 1,732 | 407 |
Annex C: 2020 HMRC gender pay gap results – full-time/part-time
| % full-time | % part-time | |
|---|---|---|
| Mean gender pay gap - ordinary pay | 1.2 | 9.0 |
| Median gender pay gap - ordinary pay | 2.9 | 15.3 |
| Mean gender pay gap - bonus pay in the 12 months ending 31 March | -7.8 | -8.1 |
| Median gender pay gap - bonus pay in the 12 months ending 31 March | -10.0 | -16.7 |
| The proportion of male employees paid a bonus in the 12 months ending 31 March | 65.2 | 48.4 |
| The proportion of female employees paid a bonus in the 12 months ending 31 March | 67.9 | 53.7 |
Proportion of male and female full pay relevant employees in each quartile
| Quartile | Female % | Male % | Female % | Male% |
|---|---|---|---|---|
| First (lower) quartile | 42.0 | 58.0 | 76.4 | 23.6 |
| Second quartile | 45.6 | 54.4 | 84.0 | 16.0 |
| Third quartile | 44.2 | 55.8 | 80.4 | 19.6 |
| Fourth (upper) quartile | 42.4 | 57.6 | 72.3 | 27.7 |
| Total Staff | Full Time | Part Time |
|---|---|---|
| Female | 19,893 | 15,075 |
| Male | 25,421 | 4,322 |
| Total | 45,260 | 19,397 |