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6348.0.55.001 - Labour Costs, Australia, 2002-03  
Latest ISSUE Released at 11:30 AM (CANBERRA TIME) 11/06/2004   
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SUMMARY OF FINDINGS


Overview

This publication contains statistics on the main costs incurred by employers as a consequence of employing labour in 2002-03. The statistics are based on the Major Labour Costs Survey (MLC) conducted in July 2003. The survey provides information on various components of labour costs, including: employee earnings; employer payments for superannuation; workers' compensation costs; payroll tax and fringe benefits tax.


More detailed data for 2002-03 and estimates for 1993-94 and 1996-97 based on the previous two MLC Surveys are presented in the Appendix.


Total costs

Total labour costs incurred by employers in Australia in 2002-03, as defined in the Major Labour Costs Survey, were $354,150 million. Employee earnings accounted for 86.6% of total labour costs. Superannuation was the next largest component at 7.6%. Payroll tax and Workers' compensation costs were 2.9% and 2.2% respectively, while Fringe benefits tax was the smallest component at 0.8% of total labour costs.


Large businesses (those with 100 or more employees) accounted for 57.0% of the total labour cost, while medium businesses (20 to 99 employees) accounted for 17.9% and small businesses (less than 20 employees) accounted for 24.4%.


Total labour costs for private sector employers were $270,330 million, representing 76.3% of the labour costs of all employers. Total labour costs for the public sector, which includes public trading and financial enterprises as well as commonwealth, state and local government departments and authorities, were $83,821 million (23.7% of the total).


Costs per employee

Total labour cost per employee in 2002-03 was $42,578. The private sector had lower total labour costs per employee ($40,117) than the public sector ($52,960). This difference is primarily a result of higher earnings and superannuation costs per employee in the public sector, and in particular in the Commonwealth public sector.


The Australian Capital Territory and New South Wales had the highest costs per employee ($46,276 and $46,078 respectively) while Tasmania had the lowest ($35,611). Across industries, labour costs per employee was highest in Mining ($96,399), and lowest in Accommodation, cafes and restaurants ($23,934) and Retail trade ($25,061).

LABOUR COSTS PER EMPLOYEE, State/Territory
Graph: LABOUR COSTS PER EMPLOYEE, State/Territory



Earnings

Earnings, which includes gross wages and salary, the ungrossed value of fringe benefits, and severance, termination and redundancy payments, is by far the most significant component of labour costs. In 2002-03, earnings accounted for 86.6% of total labour costs with a value of $306,609 million. Private sector earnings totalled $233,956 million (76.3% of total earnings) and public sector earnings were $72,653 million (23.7% of total earnings).


Earnings per employee were higher for the public sector ($45,904) compared with the private sector ($34,710). Earnings per employee was highest in the Australian Capital Territory ($39,982) and New South Wales ($39,647) and lowest in Tasmania ($30,813).


Earnings per employee was highest in the Mining ($81,335) and Electricity, gas and water supply ($64,296) industries, and lowest in the Accommodation, cafes and restaurants ($20,844) and Retail trade ($21,958) industries.

EARNINGS PER EMPLOYEE, Industry
Graph: EARNINGS PER EMPLOYEE, Industry



Superannuation

In 2002-03, the value of employer superannuation contributions paid on behalf of employees in Australia was $26,930.1 million, or 7.6% of total labour costs. The private sector accounted for $20,086.4 million or 74.6% of employer contributions and the public sector, $6,843.7 million (25.4%)


Superannuation cost per employee was $3,240. Superannuation cost per employee was significantly higher in the public sector ($4,325), than the private sector ($2,983). The Australian Capital Territory had the highest superannuation cost per employee with $4,426 while Tasmania had the lowest with $2,766 per employee.


The Mining and Electricity, gas and water supply industries had the highest superannuation cost per employee at $6,040 and $5,669 respectively. Industries with the lowest superannuation cost per employee were Communication services, Accommodation, cafes and restaurants, and Retail trade ($1,635, $1,712 and $1,801 respectively). It should be noted that during 2002-03 the superannuation costs of the Communication services industry was particularly affected by the use of surplus funds in some superannuation schemes to offset employer contributions (see paragraph 22 of Explanatory Notes).

SUPERANNUATION, Percentage of total labour costs
Graph: SUPERANNUATION, Percentage of total labour costs



Payroll tax

Payroll tax paid by employers in 2003-03 totalled $10,121 million, representing 2.9% of total labour costs. The payroll tax cost per employee was higher in the public sector ($1,525) than in the private sector ($1,149).


Payroll tax per employee was highest in New South Wales ($1,467) and the Northern Territory ($1,420), and lowest in the Australian Capital Territory ($693). A high proportion of organisations in the Australian Capital Territory have payroll tax exemptions as they are engaged in general government activities.

PAYROLL TAX PER EMPLOYEE, State/territory
Graph: PAYROLL TAX PER EMPLOYEE, State/territory



As a proportion of total labour costs, payroll tax was highest in the Northern Territory (3.4%) and New South Wales (3.2%), and lowest in the Australian Capital Territory (1.5%).


Across industries, payroll tax as a proportion of total labour costs was highest in Electricity, gas and water supply (4.7%), followed by Communication services (4.6%), Mining (4.5%) and Finance and insurance (4.2%). The industry with the lowest proportion of payroll tax to total labour costs was Health and community services (0.6%). As a cost per employee, payroll tax was highest in Mining ($4,297) and Electricity, gas and water supply ($3,534), and lowest in Health and community services ($219).


For small businesses (less than 20 employees), payroll tax accounted for only 0.7% of total labour costs. For medium businesses (20 to 99 employees) and large businesses (100 employees or more), payroll tax accounted for 3.0% and 3.8% respectively.


Workers' compensation

Total workers' compensation costs in 2002-03 were $7,815 million, representing 2.2% of total labour costs. Workers' compensation cost per employee was slightly higher in the public sector ($972) than the private sector ($931). However, as a proportion of total labour costs, workers' compensation was higher in the private sector (2.3%) than the public sector (1.8%).


Workers' compensation as a cost per employee was highest in New South Wales ($1,161) and lowest in Queensland ($602). Workers' compensation costs as a proportion of total labour costs was highest in New South Wales and Tasmania (2.5% each) and lowest in Queensland (1.6%).



TABLES

1. MAJOR LABOUR COSTS, State/territory

Other labour costs
Earnings
Superannuation
Payroll tax
Workers' compensation
Fringe benefits tax
Total
Total labour costs

TOTAL LABOUR COSTS ($m)

New South Wales
109,807.1
9,474.9
4,055.7
3,212.1
1,045.4
17,788.1
127,595.2
Victoria
80,349.5
7,090.5
2,658.1
2,102.3
753.2
12,604.2
92,953.6
Queensland
50,651.3
4,476.7
1,388.2
907.3
314.2
7,086.3
57,737.6
South Australia
20,387.2
1,832.9
678.0
547.3
150.9
3,209.1
23,596.4
Western Australia
29,172.8
2,469.8
909.8
629.1
308.4
4,317.1
33,490.0
Tasmania
5,805.9
520.4
181.9
169.8
30.6
902.7
6,708.6
Northern Territory
3,045.2
247.4
121.1
73.5
28.5
470.5
3,515.7
Australian Capital Territory
7,390.3
817.5
127.9
173.6
43.9
1,162.9
8,553.2
Australia
306,609.3
26,930.1
10,120.7
7,814.9
2,675.2
47,540.9
354,150.3

COSTS PER EMPLOYEE ($)

New South Wales
39,647
3,425
1,467
1,161
378
6,431
46,078
Victoria
37,156
3,284
1,233
969
350
5,836
42,992
Queensland
33,621
2,975
931
602
211
4,718
38,339
South Australia
34,180
3,064
1,139
916
253
5,372
39,552
Western Australia
35,343
2,994
1,106
760
374
5,234
40,577
Tasmania
30,813
2,766
968
902
162
4,798
35,611
Northern Territory
35,364
2,870
1,420
845
335
5,470
40,834
Australian Capital Territory
39,982
4,426
693
937
238
6,293
46,276
Australia
36,855
3,240
1,221
939
323
5,722
42,578

2. MAJOR LABOUR COSTS, Sector

Other labour costs
Earnings
Superannuation
Payroll tax
Workers' compensation
Fringe benefits tax
Total
Total labour costs

TOTAL LABOUR COSTS ($m)

Private
233,955.8
20,086.4
7,708.3
6,276.3
2,302.7
36,373.7
270,329.6
Public
Commonwealth
13,450.3
1,163.3
294.4
176.4
118.9
1,753.0
15,203.3
State
53,323.4
5,203.9
2,090.6
1,155.4
214.6
8,664.4
61,987.8
Local
5,879.8
476.6
27.5
206.8
39.0
749.9
6,629.6
Total
72,653.5
6,843.7
2,412.4
1,538.6
372.5
11,167.2
83,820.7
All sectors
306,609.3
26,930.1
10,120.7
7,814.9
2,675.2
47,540.9
354,150.3

COSTS PER EMPLOYEE ($)

Private
34,710
2,983
1,149
931
343
5,406
40,117
Public
Commonwealth
53,888
4,660
1,180
707
477
7,023
60,911
State
45,609
4,452
1,788
988
184
7,411
53,021
Local
35,828
2,906
168
1,259
237
4,569
40,397
Total
45,904
4,325
1,525
972
235
7,056
52,960
All sectors
36,855
3,240
1,221
939
323
5,722
42,578

3. MAJOR LABOUR COSTS, Employer size

Other labour costs
Earnings
Superannuation
Payroll tax
Workers' compensation
Fringe benefits tax
Total
Total labour costs

TOTAL LABOUR COSTS ($m)

0-19 employees
78,353.4
7,598.6
628.3
1,992.8
391.3
10,611.1
88,964.5
20-99 employees
54,680.2
4,628.1
1,901.9
1,549.5
556.6
8,636.1
63,316.3
100 or more employees
173,575.7
14,703.4
7,590.5
4,272.5
1,727.3
28,293.7
201,869.5
Total
306,609.3
26,930.1
10,120.7
7,814.9
2,675.2
47,540.9
354,150.3

COSTS PER EMPLOYEE ($)

0-19 employees
29,794
2,905
231
756
149
4,041
33,835
20-99 employees
32,965
2,791
1,147
934
336
5,208
38,173
100 or more employees
42,914
3,636
1,877
1,056
427
6,996
49,910
Total
36,855
3,240
1,221
939
323
5,722
42,578

4. MAJOR LABOUR COSTS, Industry

Other labour costs
Earnings
Superannuation
Payroll tax
Workers' compensation
Fringe benefits tax
Total
Total labour costs

TOTAL COSTS ($m)

Mining
6,181.4
459.0
326.6
230.6
129.2
1,145.4
7,326.8
Manufacturing
44,201.0
3,679.4
2,007.2
1,679.3
532.3
7,898.1
52,099.2
Electricity, gas and water supply
3,672.0
323.7
201.8
65.5
40.9
631.8
4,303.9
Construction
17,113.2
1,478.7
374.4
855.8
86.9
2,795.8
19,909.0
Wholesale trade
18,510.5
1,669.0
666.0
392.1
394.4
3,121.5
21,632.0
Retail trade
26,725.2
2,188.8
798.7
641.7
137.8
3,767.1
30,492.3
Accommodation, cafes and restaurants
10,021.2
822.2
266.6
353.2
38.7
1,480.7
11,501.9
Transport and storage
13,787.0
1,174.5
611.6
513.9
87.3
2,387.3
16,174.2
Communication services
6,702.6
193.9
337.8
103.0
82.6
717.2
7,419.8
Finance and insurance
19,177.3
1,326.7
922.2
136.6
340.0
2,725.6
21,902.8
Property and business services
45,544.2
4,305.1
1,345.0
725.9
382.0
6,757.9
52,302.1
Government administration and defence
18,222.1
1,963.3
340.0
360.1
120.2
2,783.6
21,005.7
Education
27,235.0
2,841.5
1,132.6
415.2
101.7
4,491.0
31,726.0
Health and community services
32,498.1
2,942.4
204.0
858.1
76.9
4,081.4
36,579.5
Cultural and recreational services
6,214.1
521.4
217.1
110.5
54.0
903.0
7,117.1
Personal and other services
10,804.4
1,040.6
369.2
373.3
70.4
1,853.6
12,658.0
All industries
306,609.3
26,930.1
10,120.7
7,814.9
2,675.2
47,540.9
354,150.3

COSTS PER EMPLOYEE ($)

Mining
81,335
6,040
4,297
3,026
1,701
15,064
96,399
Manufacturing
43,510
3,624
1,985
1,652
526
7,787
51,297
Electricity, gas and water supply
64,296
5,669
3,534
1,147
715
11,065
75,361
Construction
37,397
3,237
821
1,871
*191
6,120
43,517
Wholesale trade
41,723
3,774
1,501
881
891
7,047
48,770
Retail trade
21,958
1,801
662
527
113
3,103
25,061
Accommodation, cafes and restaurants
20,844
1,712
561
737
81
3,090
23,934
Transport and storage
43,871
3,740
1,951
1,631
278
7,600
51,471
Communication services
56,611
1,635
2,854
869
698
6,057
62,667
Finance and insurance
52,395
3,626
2,521
373
930
7,451
59,846
Property and business services
37,435
3,545
1,108
594
314
5,561
42,996
Government administration and defence
45,056
4,856
842
889
297
6,884
51,940
Education
38,598
4,028
1,605
589
144
6,365
44,963
Health and community services
35,443
3,210
219
939
85
4,454
39,897
Cultural and recreational services
28,404
2,384
994
505
247
4,131
32,535
Personal and other services
34,154
3,295
1,173
1,182
224
5,873
40,027
All industries
36,855
3,240
1,221
939
323
5,722
42,578

* estimate has a relative standard error of 25% to 50% and should be used with caution



NOTES


ABOUT THIS PUBLICATION

This publication contains estimates obtained from a sample of employers conducted by mail for the financial year 2002-03. The survey was designed to obtain information from employers on the major costs of employing labour.



NOTES ON ESTIMATES

Care should be taken when comparing estimates of major labour costs contained in this publication with those from the most recent survey published in Labour Costs, Australia 1996-97 (cat. no. 6348.0) as there are differences in methodology between the two surveys. See paragraph 30 in the Explanatory Notes for more details.



ABS DATA AVAILABLE ON REQUEST

In addition to the information contained in this publication, a range of unpublished data is available on request. For more information refer to the Appendix.



SAMPLING ERROR

For information on sampling error refer to the Technical Note.



INQUIRIES

For further information about these and related statistics, contact the National Information and Referral Service on 1300 135 070 or Kerry Foley on Perth (08) 9360 5373.


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