1 This electronic release contains estimates of the total number of wage and salary earners and their characteristics for various levels of the Australian Standard Geographical Classification (ASGC), including Statistical Local Areas (SLAs) and Local Government Areas (LGAs), in each state and territory of Australia for the year 2000-01.
2 The data have been compiled from the Australian Taxation Office's (ATO) Individual Income Tax Return Database and are part of the Australian Bureau of Statistics' (ABS) program to increase the range of regional statistics available, particularly through the use of administrative information collected by other government agencies.
3 The ABS wishes to acknowledge the support the Australian Taxation Office has provided in compiling these statistics and in assisting the ABS in its aim to increase the range of regional data available to users of regional statistics. Without such support the wide range of statistics published by the ABS would not be available.
4 All individual income tax statistics provided to the ABS by the ATO have been in aggregated form only, at the SLA level. Information about individual taxpayers has not been released to the ABS.
5 The statistics, prior to being provided to the ABS, have also been subjected to a confidentiality process that randomly adjusts cells in tables with small values. This includes altering some small cells to zero. Caution should therefore be exercised in deducing that there are no people in an area with certain characteristics and, in general, no reliance should be placed on cells with small values in tables. The application of this process prevents the risk of inadvertently releasing any information that may identify an individual while, for most purposes, the overall information value of the statistics have not been impaired.
SCOPE AND COVERAGE
6 The main functions and responsibilities of the Australian Taxation Office are to administer taxation legislation and to collect a wide variety of taxes. The ATO therefore collects data from its reporting population as part of its processes to calculate income tax liability for those persons who are required to lodge an income tax return.
7 The ATO database covers all individuals who submit an individual income tax return and includes persons with income from one or more of a range of sources such as wages and salary, own business, superannuation, investments and government pensions, benefits or allowances. However, the scope of the ATO statistics presented in this electronic publication relate only to persons with wage and salary income, i.e. wage and salary earners (or employees). These wage and salary earners may also have other sources of income.
8 As the ATO's income tax return is designed to obtain a person's total income from various sources over a financial year, and not the employment status of a person at a particular point in time (as is the case in ABS collections), wage and salary earners have been defined as:
persons aged 15 years and over who have submitted an individual income tax return and for whom wage and salary income was the principal (or main) source of income for the financial year.
9 Wage and salary income, as reported on the income tax return, includes gross income as shown on the 'PAYG payment summary - individual non-business' as well as allowances, commissions, bonuses, tips, gratuities, consultation fees, honoraria and other payments for services. Allowances and other earnings may include car, travel or transport allowances, allowances for tools, clothing or laundry and dirt, risk, meal or entertainment allowances. (Note: PAYG (Pay as You Go) payment summaries were previously known as Group Certificates). The data have been collated from questions 1 and 2 in the 2000-01 individual income tax return.
10 Defining wage and salary earners in this way provides an indication of the main employment status, for the financial year, of persons submitting individual income tax returns which, with annual time series data, provide valuable information about employment activity and variations in earned income in regions over time. It should be noted that this definition does not take account of whether wage and salary earners work on a full-time or part-time basis. Consequently, differences in the extent of part-time work may account for some differences in the number of wage and salary earners and average wage and salary incomes across regions. Similarly, average wage and salary incomes may be affected by overtime earnings and multiple job holdings.
11 The following diagram summarises the ABS categorisation of persons reporting wage and salary income on individual income tax returns lodged with the ATO. The shaded area represents wage and salary earners based on the ABS definition as specified above.
PERSONS LODGING INDIVIDUAL INCOME TAX RETURNS, Australia, 2000-01
(a) Persons reporting wage and salary income may also have other sources of income.
12 From the ATO database, and using data for 2000-01 as an example, the proportion of persons with wage and salary income as their principal source of income represents 93% of all persons who lodged an income tax return and who reported any wage and salary income. The wage and salary income of these wage and salary earners represents over 99% of all wage and salary income reported, around 87% of the total income of all individuals reporting any wage and salary income and almost 75% of all income reported by individuals to the ATO. Similar proportions are also evident for previous years.
REVISIONS TO PREVIOUS DATA
13 As part of the ongoing process of improving the overall accuracy and quality of the statistics compiled from an administrative data source, there has been a slight change in the way the definition of wage and salary earners has been specified from records on the ATO database for the years 1999-00 and 2000-01 in comparison to how it was specified for 1995-96 to 1998-99.
14 In broad terms, for 1999-00 onwards, lump sum and/or other non-regular payments have been excluded from the definition to define principal source of income. These are payments such as eligible termination payments (ETPs), net capital gains and equalisation deposits and withdrawals, etc. This change aligns the definition more closely to international standards that define income as of a regular and recurring nature, received at annual or more frequent intervals.
15 Consequently data for Table 1, which includes the total number of wage and salary earners and their average wage and salary income, for the four years 1995-96 to 1998-99 have been revised to align with this specification, therefore providing a comparable time series for the whole period 1995-96 to 2000-01. The effect of this change is that the estimates of the number of wage and salary earners for the years 1995-96 to 1998-99 are slightly higher than those previously published in Experimental Estimates, Regional Wage and Salary Earner Statistics, Australia, 1995 -96 to 1998 - 99 (cat. no. 5673.) For example, persons receiving an ETP (i.e. question 4 on the individual income tax return in 2000-01) with a monetary value higher than that shown for wage and salary income (i.e. questions 1 and 2) would have been previously excluded from the data (i.e not a wage and salary earner) but now, with this refinement, are defined as wage and salary earners (when their wage and salary income is their main source of income over other sources). That is, the value of the lump sum payment does not override the main employment status of the individual for the financial year as defined for the purposes of these statistics.
16 Please note that the various cross-tabulations previously published as data cubes for the years 1995-96 to 1998-99 (i.e. Tables 2 - 14 which include age, sex, occupation, wage and salary income and total income) have not been revised, as the overall percentage distributions in these tables have not significantly changed.
17 The statistics compiled from the ATO database are based on individual income tax returns lodged for the financial year ended 30 June, regardless of the year in which they were processed. At the time of compiling the statistics for 2000-01 it is estimated that around 99.0% of returns had been processed by the ATO.
18 The Australian Standard Geographical Classification (ASGC) is used by the ABS for the collection and dissemination of geographically classified statistics. It is an essential reference for understanding and interpreting the geographical context of statistics published, not only by the ABS but also by other organisations, and its use enables comparability across datasets.
19 The ABS uses geographic concordances to enable the conversion of data from one type of geographic region to another. These geographic concordances are generally used to convert data for ‘non-standard areas’ to data for standard areas used by the ABS. Geographic concordances (or conversions) are expressed as conversion factors based on population.
20 The geographic identifier available on the ATO database is the postcode of the current home address of the individual. Consequently, postcode to SLA conversion factors have been used to concord, or convert, ATO aggregated postcode data to estimates for statistical local areas. The concordances are based on the estimated resident population for each particular year. Data for 2000-01 were calculated on SLA boundaries effective at 1 July 2001 as defined in the Detailed Main Structure of the Australian Standard Geographical Classification (ASGC), Volume 1, 2001 (cat. no. 1216.0).
21 The concordance process:
22 The following example shows how the concordances were applied. SLA 22751, Bellarine - Inner in Victoria, covers three postcode areas; all of postcode 3224 and parts of postcodes 3219 and 3221. Based on the estimated resident population at 30 June 2001, the proportions of the population, or concordance factors, in each postcode that make up the SLA were: 62.60% for postcode 3219, 26.71% for postcode 3221 and 100.00% for postcode 3224. By applying these factors to the relevant total population for each postcode, in this case the total number of wage and salary earners, an estimate of 8,530 for Bellarine - Inner, was derived.
- minimises confidentiality restrictions as data are not output for postcodes with small populations;
- enables the data to be more easily compared with standard ABS output;
- enables the data to be output for other standard ABS geographic areas such as Statistical Divisions, Statistical Subdivisions and Local Government Areas; and
- provides flexibility so that data can be provided for the different regions of interest being studied by users of regional data (which are usually groupings of SLAs and/or LGAs).
EXAMPLE - POSTCODE TO SLA CONCORDANCE
23 When analysing concorded data the following limitations of this methodology need to be taken into account:
Number of wage and salary earners
24 While care was taken in producing the concordances the ABS will not guarantee the accuracy of concorded data.
COMPARABILITY OF RESULTS WITH ABS COLLECTIONS
25 The following diagram summarises the basic components of the employed population in Australia, as defined in ABS collections. Wage and salary earners, or employees, comprise around 86% of all employed persons and as such make a major contribution to the labour market. The shaded area shows the component that the wage and salary earner estimates from ATO data attempt to represent.
- in applying the concordances it is assumed that the particular characteristics of any data item are uniformly distributed across a postcode area and therefore concorded data may not truly reflect the distribution of the characteristics of the population. In some cases, where the same postcode is split across two or more SLAs and there are no other contributing postcodes, distinct numerical estimates will be derived but rates or averages will be identical for each SLA (as these will be equivalent to the original rate or average of the contributing postcode);
- the conversion factors are based on total population only but have been applied across all ATO data items, i.e. the number of wage and salary earners, wage and salary income, total income and sex, age and occupation groups;
- some official postcodes (such as PO boxes, etc.) do not correspond to residential areas but may still have been reported under the current home address field on the income tax return. Data for these and other ‘invalid’ postcodes, such as those due to incorrect reporting or processing errors, have been included in an ‘unknown’ category for each state and territory and for Australia where the state or territory was not known; and
- concorded figures have been rounded so discrepancies may occur between sums of the component items and totals.
ABS CATEGORIES OF EMPLOYED PERSONS(a), Australia, May quarter 2001
(a) Persons aged 15 years and over.
Source: ABS Labour Force Survey
26 Where possible the wage and salary earner estimates presented in this publication have been compared with other ABS data sources such as the Census of Population and Housing, the Labour Force Survey (LFS) and the Survey of Employment and Earnings (SEE). These comparisons provide a means for establishing whether counts are of an ‘expected’ magnitude and whether distributions across variables or regions are similar. Despite differences in purpose, concepts, definitions and reference periods, the statistics compiled from the ATO database have been found to be generally consistent in broad magnitude when compared with these other data sources.
27 The table below shows ATO wage and salary earner data for Australia compared with data from the Labour Force Survey and the Survey of Employment and Earnings. In broad magnitude, each of the three data sources estimate the number of wage and salary earners at around 7 million persons in 1995-96 and increasing to around 7.5 million or more in 2000-01. Similarly, both ATO and ABS Survey of Employment and Earnings data show that total wages and salaries paid increased from around $204 billion in 1995-96 to around $260 billion in 2000-01.
COMPARISON WITH ABS DATA, Number of Wage and Salary Earners and Wage and Salary Income, Australia, 1995-96 to 2000-01
(a) LFS; Labour Force Survey, Original Series, May Quarter. Source: Labour Force, Australia, Detailed - Electronic Delivery, cat. no. 6291.0.55.001, Data Cubes.
(b) SEE; Survey of Employment and Earnings, Trend Series, At June. Source: Wage and Salary Earners, Australia, cat.no. 6248.0, Time Series Spreadsheets.
28 Comparisons for each state and territory are included in the appendix as well as an outline of the major differences between these data sources.
29 The appendix also includes comparisons between 2000-01 ATO data and 2001 Population Census data for the various characteristics of wage and salary earners (sex, age, occupation and wage and salary income). These comparisons also indicate consistent distributions between ATO and Census data. The previously published Information Paper: Use of Individual Income Tax Data for Regional Statistics-Experimental Estimates for Small Areas, 1995-96 and 1996-97 (cat. no. 5673.0) contains comparisons between 1995-96 ATO and 1996 Population Census data.
OTHER LIMITATIONS TO DATA
29 In addition to the methodological and definitional issues already highlighted (such as the number of wage and salary earners defined over a whole or any part of the financial year rather than at a point in time, use of postcode to SLA concordances and the randomisation of small cells) some other limitations need to be taken into account when analysing the data. For example,
NUMBER OF WAGE AND SALARY EARNERS ('000)
WAGE AND SALARY INCOME ($m)
30 Overall however, the limitations outlined above are considered to be relatively minor factors which do not limit the general use of the data for the broad purposes intended.
AUSTRALIAN STANDARD GEOGRAPHICAL CLASSIFICATION
31 The statistics in this electronic release and accompanying data cubes are presented according to the Australian Standard Geographical Classification (ASGC), 2001. Under this classification, statistical areas are defined as follows:
- a number of low income earners, including wage and salary earners, are not required to submit a tax return and therefore may not be included in the statistics. For example, where income is below the annual tax free threshold and tax was not withheld, a return is not required to be submitted to the ATO. (Note: The tax free threshold was $5,400 for 1995-96 to 1999-00 and $6,000 for 2000-01). It should also be noted that changes to the tax free threshold may have a minor effect on averages.
- some persons may move address over the course of a year and consequently their wage and salary income may not all relate to the current home address or postcode area (and therefore the SLA) as reported on the income tax return;
- generally, around 95.0% of individual income tax returns are processed within one year and around 99% within two years of the end of each particular income tax year. Consequently, a small proportion of returns may not have been processed at the time that these statistics were compiled and would not be included in the estimates presented. No attempt has been made to estimate or revise the data for any records submitted to the ATO after these statistics have been compiled. Note: Data for 2000-01 were compiled in August 2003, around twenty four months after the end of the 2001 income tax year.
- A number of SLAs with large decreases in the number of wage and salary earners between 1997-98 and 1998-99 in particular are areas with significant Indigenous populations. It is possible that these decreases are due to changes in the reporting of the income of Community Development Employment Project (CDEP) participants. CDEP is a program that enables Indigenous persons to exchange unemployment benefits for opportunities to undertake work and training in their communities. An instruction in the 1998-99 TaxPack (and in subsequent years) defines CDEP income as a 'Commonwealth of Australia Government Allowance or Payment'. Before 1998-99 such specific instructions on the treatment of CDEP payments were not included in TaxPacks. Although difficult to verify, it may be possible that, prior to 1998-99, CDEP participants reported income from this source as wage and salary income as the CDEP payment is shown as CDEP Salary or Wages on the group certificate or PAYG payment summary - individual non business. Consequently, wage and salary earner data prior to 1998-99 may have included CDEP participants while, for 1998-99 onwards, these persons have not been included. The general effect of this reporting anomaly is that for the three years 1995-96 to 1997-98, the estimates of the number of wage and salary earners may be higher and the average wage and salary incomes lower, than subsequent years.
32 Further information concerning statistical areas, including information about recent changes to boundaries, is contained in Australian Standard Geographical Classification (ASGC), 2001 (cat. no. 1216.0). The ASGC also incudes a complete series of maps showing SLAs.
33 A range of other data are available for the wage and salary earner population for each of the years 1995-96 to 2000-01. These data are available as data cubes (Excel spreadsheets) and include various cross-tabulations of characteristics such as age, sex, occupation, wage and salary income and total income. Below is a complete list of the tables available. Data definitions and classifications are included in the GLOSSARY.
- Legal Local Government Areas (LGAs): These areas are the spatial units which represent the geographical areas of incorporated local government councils and incorporated Community Government Councils (CGCs) where the CGC is of sufficient size and statistical significance. The various types of LGAs are cities (C), areas (A), boroughs (B), rural cities (RC), towns (T), shires (S), district councils (DC) and municipalities (M).
- Statistical Local Areas (SLAs): These geographical areas are in most cases identical with, or have been formed from a division of, whole LGAs. In other cases, they represent unincorporated areas. In aggregate, SLAs cover the whole of a state or territory without gaps or overlaps. In some cases legal LGAs overlap Statistical Subdivision boundaries and therefore comprise two or three SLAs (Part A, Part B and, if necessary, Part C).
- Statistical Subdivisions (SSDs): These are of intermediate size, between SLAs and SDs. In aggregate, they cover the whole of Australia without gaps or overlaps. They are defined as socially and economically homogeneous regions characterised by identifiable links between the inhabitants. In the non-urban areas an SSD is characterised by identifiable links between the economic units within the region, under the unifying influence of one or more major towns or cities.
- Statistical Divisions (SDs): These consist of one or more SSDs. The divisions are designed to be relatively homogeneous regions characterised by identifiable social and economic units within the region, under the unifying influence of one or more major towns or cities.
34 Due to the application of both the postcode to SLA concordance and the randomisation process, totals for each variable and geographic area may differ from table to table. Concorded figures have been rounded while column and row totals have been derived after the random adjustment process has been applied. The random adjustments have been made only to very small cells. However, the more detailed a table is, the greater the likelihood of small cells being present. This is particularly the case for SLAs with small wage and salary populations. The randomisation of small cells has only been applied at the SLA level and for most purposes the value of the data has not been impaired. Differences in totals between tables are not significant and can be ignored.
35 Furthermore, where figures have been rounded, discrepancies may occur between the sums of the component items and totals. Proportions and rates have been calculated on rounded figures and may differ slightly if calculated on the unrounded numbers.
36 Users may wish to refer to the following ABS and other products which contain statistics relating to wage and salary earners and/or other statistics compiled from Australian Taxation Office data.
Australian Bureau of Statistics, Information Paper, Use of Individual Income Tax Data for Regional Statistics - Experimental Estimates for Small Areas, 1995-96 and 1996-97, cat. no. 5673.0
Australian Bureau of Statistics, Experimental Estimates, Regional Wage and Salary Earner Statistics, Australia, 1995-96 to 1998-99, cat. no. 5673.0
Australian Bureau of Statistics, Information Paper, Use of Business Income Tax Data for Regional Statistics - Experimental Estimates, Selected Regions, Australia, 1995-96 to 1997-98, cat. no. 5675.0
Australian Bureau of Statistics, Experimental Estimates, Regional Small Business Statistics, Australia, 1995-96 to 1999-2000, cat. no. 5675.0
Australian Bureau of Statistics, Labour Force, Australia, cat. no. 6203.0.
Australian Bureau of Statistics, Wage and Salary Earners, Australia, cat. no. 6248.0.
Australian Bureau of Statistics, 1996 and 2001 Census of Population and Housing.
Australian Taxation Office, Taxation Statistics, a summary of taxation and superannuation statistics, annual, ATO Canberra
37 For further information about these statistics, contact the National Information Service on 1300 135 070, or Mark Nowosilskyj on: phone (08) 8237 7358, fax (08) 8237 7393 or email email@example.com
SYMBOLS AND OTHER USAGES
|Table 1:||Total Wage and Salary Earners, Total Wage and Salary Income and Average and Median Wage and Salary Income By SLA.|
|Table 2:||Age, By Sex and SLA.|
|Table 3:||Occupation (Major Groups), By Sex and SLA.|
|Table 4:||Occupation (Major Groups), By Age and SLA.|
|Table 5:||Wage and Salary Income, By Sex and SLA.|
|Table 6:||Wage and Salary Income, By Age and SLA.|
|Table 7:||Wage and Salary Income, By Occupation (Major Groups) and SLA.|
|Table 8:||Occupation (Selected Minor Groups), By SLA.|
|Table 9:||Wage and Salary Income, By Occupation (Selected Minor Groups) and SSD.|
|Table 10:||Total Wage and Salary Earners, Total Income and Average and Median Total Income By SLA.|
|Table 11:||Total Income, By Sex and SLA.|
|Table 12:||Total Income, By Age and SLA.|
|Table 13:||Total Income, By Occupation (Major Groups) and SLA.|
|Table 14:||Total Income, By Occupation (Selected Minor Groups) and SSD.|
|ABS||Australian Bureau of Statistics|
|ASGC||Australian Standard Geographical Classification|
|ATO||Australian Taxation Office|
|CDEP||Community Development Employment Project|
|ETP||eligible termination payment|
|LFS||labour force survey|
|LGA||local government area|
|PAYG||pay as you go|
|SEE||survey of employment and earnings|
|SLA||statistical local area|
|W & S||wage and salary|
|$m||million dollars |
|(CGC)||Community Government Councils|
|(M)||Municipality or Municipal Council|
|$m||million dollars |
|-||not applicable or figure not calculated|