This
quick guide provides information on sources available for Australian earnings
data, it outlines a definition of earnings, and aims to respond to frequently
asked questions (FAQs). It draws on a range of data published by the Australian
Bureau of Statistics (ABS), as well as other sources. This guide updates the
2018 version of the same name, as well as the earlier Parliamentary Library publication,
Earnings in Australia: a quick guide (A Hall, 15 April 2015).
What are earnings?
The International Labour
Organization (ILO) describes earnings as:
‘...remuneration
in cash and in kind paid to employees, as a rule at regular intervals, for time
worked or work done together with remuneration for time not worked such as for
annual vacation, other paid leave or holidays. Earnings exclude employers’
contributions in respect of their employees paid to social security and pension
schemes and also the benefits received by employees under these schemes.
Earnings also exclude severance and termination pay’ (ABS, Labour statistics: concepts sources and methods, Feb
2018, cat . no. 6102.0.55.001).
Earnings generally refer to
gross wages or salary, that is, the calculated amount prior to tax.
Earnings or income?
‘Earnings’ is a narrower
concept than ‘income’, as income includes remuneration from all sources, not
just wages or salary received from employers. Examples of other income sources
include dividend payments from shares or rental income from housing. Whether to
use earnings or income data depends on the question to be answered. Earnings
data is useful for analysis of wage differences between industries, occupations
or gender. Income data is generally used when examining equality or
distribution, as it encompasses amounts received from all sources, including
government pensions, business income and investment income. The effect of these
differences between the two is illustrated in the following table.
Comparison
of earnings and income using ABS data
| Earnings or income |
Applicable group |
Amount ($) |
Source |
| Median weekly total cash
earnings |
All employees |
1,110.00 |
ABS, Employee Earnings
and Hours, May 2018, cat. no. 6306.0 (see Datacube 3) |
| Median weekly total cash
earnings |
Full-time non-managerial
employees paid at the adult rate |
1,460.00 |
ABS, Employee Earnings
and Hours, May 2018, cat. no. 6306.0 (see Datacube 8) |
| Median equivalised
disposable household weekly income |
By person (all households) |
853.00 |
ABS, Household income
and wealth, 2015–16, cat. no. 6523.0
(see table 'Main source of gross household income') |
| Median equivalised
disposable household weekly income |
By person (in households
whose main source of gross income was 'employee income') |
999.00 |
As above |
Key source of conceptual
information
The ABS
release, Labour statistics: concepts, sources and methods, Feb
2018 (cat. no. 6102.0.55.001)
provides a chapter on the concepts, definitions and application of ‘Employee remuneration’, as well as chapters for surveys of earnings and the
wage price index.
FAQs
This section aims to
address commonly asked questions about earnings data.
What data can be used to determine
average earnings at a particular point in time?
The ABS Average weekly earnings (cat. no. 6302.0) publication provides twice-yearly
estimates of the average gross (i.e. pre-tax) weekly earnings for wage and
salary earners. The key data series are briefly summarised below.
- Average weekly ordinary time
earnings (AWOTE) for full-time adult employees
This
is considered the most stable of the series, due to the exclusion of
overtime, part-time employees and those on junior rates of pay.
- Average weekly total earnings
(ordinary time plus overtime) for full-time adult employees
This
series contains the highest estimates of earnings as it includes
overtime, but excludes part-time employees and those aged less than 21
years who are not paid at the adult rate of pay.
- Average weekly total earnings
for all employees
This series includes overtime, employees paid junior
or apprentice rates and part-time employees.
- Average weekly cash
earnings
This
series was introduced in May 2010. It differs to the average weekly earnings
series as it includes amounts salary sacrificed. The series is available
by sector (private/public) and by industry.
Notes on the data
- The estimates of average weekly
earnings are calculated by dividing the estimates of gross weekly earnings by
estimates of the number of employees. The survey is designed to provide snapshots
of earnings at particular time points, rather than to compare changes in
earnings over time.
- The information is supplied to the
ABS by a representative sample of employers. The employer survey data is
considered to provide more robust estimates of earnings, when compared to a
household sample survey.
- The survey data does not include all
employed, as it is based on the earnings of employees. Excluded are the
self-employed, owners of unincorporated businesses and permanent members of the
Australian defence force.
- Due to the way in which the data
is compiled, it does not provide total wages and salaries received by an
employee from all of their jobs. It is also not possible to calculate median
wages as the underlying data is collected at the aggregated employee level,
rather than for individuals. It does not provide any information on families,
households or couples.
- Users should be aware that a
number of factors can change the estimates produced by the survey. For example,
changes in the distribution of occupations across or within industries, the
composition of part-time workers in the employment mix, or an upsurge in the
number of apprentices can change the mix of employees included in a series and
the resulting wage rates for that series.
- The ABS generally encourages the
use of trend data for time series comparisons, rather than the original
or seasonally adjusted figures. However, the Average Weekly Earnings trend
series is only available from 2012, whereas the original series is available
from 1994. This discrepancy is due to a change in the timing of the survey (from
quarterly to twice per year). While the collection of data commenced in 1941,
the ABS website only provides historical data from June 1967 onwards.
What earnings data is used for
legislative purposes?
The ABS Average weekly earnings (cat. no. 6302.0) publication is referenced in a
range of Commonwealth legislation. Some examples are listed below.
- The Child Support (Assessment) Act 1989 (Part 1 Section 5A) uses the annualised Male Total
Average Weekly Earnings figure to calculate assessable parental income for
child support.
- The Higher Education Funding Act 1988 (Chapter 5A1, Section 106PC) uses Average weekly
earnings figures as part of the calculation of voluntary payments in respect of
accumulated HEC debt.
- The Social Security Act 1991 (Section 16A(1)) refers to the AWOTE in the
definition of ‘Seasonal work’ and the calculation of a preclusion period for
intermittent work.
- The Income Tax Assessment Act 1997 (Subsection 960-280(4)) refers to the full-time adult
AWOTE for a particular time frame to create an index number for genuine
redundancy, early retirement schemes or pre-1 July 1988 funding credits.
The Aged Pension also relies
on an annualised Male Total Average Weekly Earnings (MTAWE) figure as a wages
benchmark for indexation. The Pension is indexed in March and September of each
year. It is increased to reflect growth in the Consumer Price Index (CPI) and
the Pensioner and Beneficiary Living Cost Index (PBLCI), whichever is higher.
However, when wages grow more quickly than prices, the pension is increased to
the wages benchmark. The benchmark sets the combined couple rate as a
proportion of the MTAWE (the single rate is a proportion of the couple rate). For
more information see ‘After 20 September 2009’ in 5.1.8.50 Common provisions
affecting indexation of Pensions, Guide to Social Security Law (Department of Social Services, 20 March 2019).
What data sources are available to
analyse median earnings?
The ABS Employee Earnings and Hours (cat. no. 6306.0) publication provides estimates of employee
earnings (pre-tax) every two years. The survey is designed to provide detailed
information on the composition and distribution of earnings, hours paid for and
methods used to set pay. The deciles and quartiles tables provide median
earnings.
The key series are based on
types of employees and their personal and/or employment characteristics, these
include: all employees; non-managerial employees; and full-time non-managerial
employees paid at the adult rate. Characteristics include: age; sex; method of
setting pay (e.g. award, collective agreement); employment status (full-time/part-time);
type of employee (e.g. permanent, casual); occupation; industry; and sector
(public/private).
Notes on the data
Although generally similar
to the Average Weekly Earnings survey, there are a couple of key differences.
These are summarised below.
- All estimates from this survey include
amounts salary sacrificed (i.e. weekly cash earnings).
- The information supplied by
employers covers both their details and those of their employees. The data
relates to a sample of individual employees rather than employees at the
aggregate level. This allows for greater flexibility in what estimates can be
produced from the survey (e.g. distributions, median earnings).
- While this survey provides
estimates of the number of employees, these are produced to add context to the
figures on pay setting methods, rather than to provide a definitive estimate of
employees. The ABS advises using the Labour Force Survey (cat. no. 6202.0) for estimates of employment.
- There have been a number of
conceptual and methodological changes to the survey since it was first run in
1974. The ABS provides historical data from May 1993 onwards. However, the
comparability of survey content varies over time and analysis of earnings
across long time periods should be undertaken with caution.
Other sources of median earnings
data
- The ABS Wage and Salary Earner Statistics for Small Areas (cat. no. 5673.0.55.003) publication provides average
and median wages and salary income (see p. 5).
- The ABS Characteristics of Employment (cat. no. 6333.0) publication provides estimates of median
weekly and hourly earnings for employees in their main job by a range of
personal and employment characteristics (e.g. sex, full-time/part-time status,
industry, occupation, level of highest non-school qualification). The main
release includes some data by state/territory, while the microdata release also
provides smaller geographic areas.
What data can be used to analyse
total earnings (all jobs) for individuals?
The ABS Microdata: Characteristics of Employment (cat. no.
6333.0.00.001) release provides estimates of weekly earnings for people in all
jobs (ranges), as well as weekly and hourly earnings (ranges) in main job and
second job. Also included are the hours paid for in main job and second job.
Data is available via TableBuilder, which the Statistics and Mapping Section of
the Parliamentary Library can access on behalf of clients.
What data can be used to analyse
earnings in specific industries, occupations or sectors?
- The ABS Average weekly earnings (cat. no. 6302.0) publication includes the three key
series by sex and industry division (broadest level, excludes Agriculture), and
by public/private sector (and state).
- The ABS Employee Earnings and Hours (cat. no. 6306.0) publication includes earnings
estimates by industry, occupation and sector.
- The ABS Characteristics of Employment (cat. no. 6333.0) publication includes earnings
estimates by industry and occupation.
- The ABS Employment and Earnings, Public Sector (cat. no. 6248.0.55.002) publication provides annual
information on the number of civilian employees (Commonwealth, state and local
government) and the total cash wages and salaries.
- The ABS quarterly publication, Business Indicators (cat. no. 5676.0), includes wages and salary data for
the private sector. Note: very small non-employing businesses are excluded.
What data can be used to analyse
wage growth within and across industries?
The ABS Wage Price Index (WPI, cat. no. 6345.0) publication provides quarterly indexes that
measure changes in the price of labour in the Australian labour market. The WPI
is constructed similarly to the CPI, in that
it follows a fixed ‘basket’ of jobs and is therefore not affected by changes in
quality and quantity of work. The WPI FAQs
page provides helpful information about the sample, collection, calculation,
interpretation and comparisons of employer costs between states, industries and
sectors.
What data can be used to analyse
geographic differences in earnings?
- The ABS Wage and Salary Earner Statistics for Small Areas (cat. no. 5673.0.55.003) publication provides small
area data based on Australian Taxation Office (ATO) individual income tax
returns. The data covers Australians who lodged tax forms with the ATO and who
reported income from wages and salaries. Data is available by the following
regions: Statistical Area Level 2 (SA2s); Statistical Area Level 3 (SA3s);
Statistical Area Level 4 (SA4s); Local Government Area (LGAs); Greater Capital
City Statistical Area (GCCSAs); and State/Territory.
- The ABS Characteristics of Employment (cat. no. 6333.0) publication provides estimates of
median weekly and hourly earnings for employees in their main job by
State/Territory. The Microdata: Characteristics of Employment (cat. no.
6333.0.00.001) release provides estimates of weekly and hourly earnings in main
and second job, and weekly earnings in all jobs, by SA4s, Metro/Non-Metro Area
groupings and GCCSAs.
What data can be used to analyse
gender differences in earnings (i.e. ‘wage gap’)?
- Three key ABS publications include
earnings estimates by males and females, Average weekly earnings, Employee Earnings and Hours and Characteristics of Employment. Care
should be taken when comparing estimates for full-time workers, as
approximately only half of all female workers are represented in the data (due
to the remainder being part-time workers). The distribution of males and
females across industries and/or occupations can also impact on estimates at
the aggregate level.
- The Parliamentary Library quick
guide: Gender wage gap statistics provides a range of resources for analysing the
gender gap.
- The Workplace Gender Equality
Agency (WGEA) publishes annual earnings data on employees representing about 40% of the total labour force. A key
strength of the data is that all people employed by a business are included.
However, the data set is limited to private sector employers with 100 or more
employees. The data set includes industry profiles and comparison tools.
- The APS Remuneration Report provides an annual summary of remuneration across the
whole of the Australian Public Service (APS), excluding some groups of
temporary employees and those on leave without pay.
- The ABS also publishes a range of
estimates in the Gender Indicators (cat. no. 4125.0) publication, including economic
security, health, education, work and family balance, and safety and justice.
What data is available on
apprentice earnings?
The ABS Employee Earnings and Hours (cat. no. 6306.0) publication includes earnings
estimates by rates of pay, including apprentices/trainees. Earnings are
available by a range of characteristics.
Where can you find the minimum wage
data?
National minimum wage
information is available from the Fair Work Ombudsman’s website.
Where can you find Chief Executive
Officer salaries and wages?
- The Australian Financial Review
(AFR) provides annual data on the salaries of the ASX300 Chief Executive Officers (CEOs), with a full breakdown of remuneration and
percentage change in their pay from the previous reporting period. Only CEOs
who held the role for the entire annual reporting period are included.
- ASCI provide CEO pay in ASX200 companies through an annual remuneration survey.
Where can you find Parliamentary
salaries and entitlements?
Current rates are set out
in the Remuneration Tribunal’s Members of Parliament Determination available from the Tribunal’s website. The
Determination also includes Travel Allowance, the framework for parliamentary
work expenses, Annual Review Statements, MP Entitlements and Parliamentary
Retirement Travel.
Where can you find taxation
statistics for wage and salary earners?
The ATO provides a range of
statistics based on individuals’ tax returns, including the number of wage and salary earners who
have lodged a return and the total amount these individuals have recorded as
income. Wage and salary earner data is provided by a range of characteristics,
such as sex, age ranges, taxable status, state/territory, taxable income range,
industry and occupation. The ATO’s annual publication, Taxation statistics, also provides information on the income tax returns
of companies, super funds, partnerships and trusts.
Historical data on earnings
- D Hutchinson (revised by F Ploeckl,
June 2016), Australian Wages Series—Sources,
Methods and Uses, MeasuringWorth.com
website, accessed 24 April 2018.
-
G Withers, T Endres and L Perry, ‘No
7: Australian Historical Statistics: Labour Statistics’ in Source papers in
economic history,
The Australian National University, Centre for Economic History website, accessed
24 April 2018.
- ABS, Employee Earnings,
Benefits and Trade Union Membership (cat. no. 6310.0) contains median and mean earnings for
‘main job’ and ‘all jobs’ for employees from 1975 to 2013.
- J Rob Bray, ‘Reflections on the
evolution of the minimum wage in Australia: Options for the future’, commissioned as part of the HC
Coombs Policy Forum’s Visioning Australia’s Future Initiative, The
Australian National University, Research School of Economics, May 2013,
accessed 24 April 2018. (Contains a minimum wage series from 1907 to 2012).
- JR Bray, ‘100 years of the
minimum wage and the Australian tax and transfer system: what has happened,
what have we learnt and what are the challenges?’, Australian Tax Forum, v.30,
2015, pp. 819-844.