In the 18 months leading up to December 31, Google UK’s staff earned an average of £385,000 each. One of the main reasons for higher salaries is that Google UK also spent almost £1 billion on share-based payments over the same time period.
Google, along with other tech firms that are also looking to cut operating costs as the world economy worsens, reported $3.4 billion in turnover and $1.1 billion in pre-tax profits over the 18 months leading up to December 2021.
The company, which delayed its accounting period from the end of June to the end of December last year, issued financial results for the first time this July. It paid £200m in UK corporation tax over the past 18 months.
Google UK hired 577 new employees between June 2020 and December last year. In total, the company employs 5,701 employees–2,275 in sales and marketing roles; 2,412 in research and design; 1,014 in management and administration.
Google spent, according to Companies House accounts, £2.2bn in 18 months. Google’s wage and salary bill totaled £1.06 billion.
In 2017, the UK staff received a $2.6 billion in share-based payments, with $330 million in social security costs and $67 million in expenses related to its defined contribution plan.
The accounts show that Google paid £200m in corporation tax on its total UK profits of £1.1bn.
Google, like its tech peers Meta – the owner of Facebook and Instagram – and Amazon, is often the subject of criticism that it doesn’t pay enough in taxes in the UK.
Google’s annual turnover was reported to be £3.4bn over a 18-month period, but Insider Intelligence estimated that the company earned almost £8.7bn in ad revenue in the UK during 2021 alone.
Google reports some of its revenue in other regions, including Ireland, which has a lower tax rate.
Regarding Google’s global effective income tax rate over the past decade, a spokesperson cites the company’s average statutory tax rates of close to 20%. They also support efforts via OECD to update international tax rules in order to allocate more taxing rights to countries where products and services are consumed.
Google’s Irish subsidiary agreed in November to pay €218 millions (roughly $235 million) in back taxes to the Irish government. 2020, Google’s parent company, Alphabet, said it would stop using a notorious tax loophole known as “the double Irish with a Dutch sandwich”.
In 2020, the UK introduced a digital services tax of 2% of gross revenues, which was aimed at large companies with huge revenue and relatively small profit margins.
The OECD broke down a plan for 2017 that will replace the global system with a tax system for big multinational corporations, who will have to pay taxes where they do business. They have committed to a minimum 15% corporation tax rate.
Google UK’s spokesperson responded, “Any attempt to calculate average employee compensation using these figures will be highly inaccurate. We continue to invest in the UK as a key hub of tech and innovation, adding new employees and through our purchase of the Central St Giles development (in London) for $1 billion earlier this year.”