iCloud backup smaller than photos library?

So I’ve noticed that my iCloud backup size is significantly smaller than the backed up photos library. My old phone’s backup did the same, said it was 1.1gb but when restored on new phone it restored over 20gb worth of photos.

I DO NOT have iCloud photos turned on, so photos were definitely being backed up in backup.

Is this because the files are compressed in iCloud? If so, then how come when I’ve tried to back up using the free 5gb it says there’s not enough storage?

Any help would be appreciated. I mainly want to know so I can be sure my backups are safe. Also to see why I can’t back up using the free storage. Sorry if this has been asked, but I couldn’t find a definitive answer. Thanks in advance!