SUMMARY OF FINDINGS


OVERVIEW

This publication contains statistics on the main costs incurred by employers as a consequence of employing labour. The statistics are based on the Major Labour Costs Survey conducted by the Australian Bureau of Statistics (ABS) in respect of the 2010-11 and 2002-03 reference years. 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.


TOTAL COSTS

Total labour costs incurred by employers in Australia during 2010-11, as defined in the Major Labour Costs Survey, were $620,357 million. Employee earnings accounted for 87.3% of total labour costs. Superannuation was the next largest component at 7.6%. Payroll tax and workers' compensation costs were 3.0% and 1.7% respectively, while fringe benefits tax was the smallest component at 0.5% of total labour costs.

Large businesses (those with 100 or more employees) accounted for 61.2% of the total labour cost, while medium businesses (20 to 99 employees) accounted for 19.0% and small businesses (less than 20 employees) accounted for 19.8%.

Total labour costs for private sector employers were $478,968 million, representing 77.2% of the labour costs of all employers. Total labour costs for the public sector, which includes public trading and financial enterprises as well as national, state/territory and local government departments and authorities, were $141,389 million (22.8% of the total).


COSTS PER EMPLOYEE

Total labour costs per employee during 2010-11 was $53,063. The private sector had lower total labour costs per employee ($48,875) than the public sector ($74,674). This difference is primarily a result of higher earnings and superannuation costs per employee in the public sector, particularly in the national public sector.

The Australian Capital Territory and Northern Territory had the highest costs per employee ($66,646 and $56,030 respectively) while Queensland had the lowest ($48,246). Across industries, labour costs per employee were highest in the Mining industry ($134,581 per employee) and lowest in the Accommodation and Food Services industry ($20,896) and Arts and Recreation Services industry ($30,333).

EARNINGS

Earnings, which includes gross wages and salary, the ungrossed value of fringe benefits, and severance, termination and redundancy payments, is the largest component of labour costs. During 2010-11, earnings accounted for 87.3% of total labour costs with a value of $541,296 million. Private sector earnings totalled $418,055 million (77.2% of total earnings) and public sector earnings were $123,241 million (22.8% of total earnings).

Earnings per employee were higher for the public sector ($65,089) compared with the private sector ($42,658). Earnings per employee were highest in the Australian Capital Territory ($57,464) and Northern Territory ($48,879) and lowest in Queensland ($42,343).

Earnings per employee were highest in the Mining ($114,433) and Electricity, Gas, Water and Waste Services ($83,984) industries, and lowest in the Accommodation and Food Services ($18,317) and Arts and Recreation Services ($26,661) industries.

SUPERANNUATION

During 2010-11, the value of employer superannuation contributions paid on behalf of employees in Australia was $46,989 million, or 7.6% of total labour costs. The private sector accounted for $34,956 million or 74.4% of employer contributions and the public sector, $12,033 million (25.6%).

Superannuation costs per employee were $4,020. Superannuation costs per employee were significantly higher in the public sector ($6,355), than the private sector ($3,568). The Australian Capital Territory had the highest superannuation costs per employee with $6,896 while Queensland had the lowest with $3,708 per employee.

The Mining and Electricity, Gas, Water and Waste Services industries had the highest superannuation costs per employee at $9,946 and $8,242 respectively. Industries with the lowest superannuation costs per employee were Accommodation and Food Services, Administrative and Support Services, and Arts and Recreation Services ($1,506, $2,136 and $2,205 respectively).

PAYROLL TAX

Payroll tax paid by employers during 2010-11 totalled $18,631 million, representing 3.0% of total labour costs. The payroll tax cost per employee was higher in the public sector ($1,927) than in the private sector ($1,529).

Payroll tax per employee was highest in the Northern Territory ($1,763) and New South Wales ($1,753), and lowest in the Australian Capital Territory ($1,041). A large proportion of organisations in the Australian Capital Territory have payroll tax exemptions as they are engaged in general government activities.

As a proportion of total labour costs, payroll tax was highest in Tasmania (3.4%) and lowest in the Australian Capital Territory (1.6%).

Across industries, payroll tax as a proportion of total labour costs was highest in Mining (4.6%), followed by Electricity, Gas, Water and Waste Services (4.0%) and Finance and Insurance Services (3.9%). The industry with the smallest proportion of payroll tax to total labour costs was Health Care and Social Assistance (0.9%). As a cost per employee, payroll tax was highest in Mining ($6,216), and lowest in Health Care and Social Assistance ($485).

For small businesses (fewer than 20 employees), payroll tax accounted for only 1.5% of total labour costs. For medium businesses (20 to 99 employees) and large businesses (100 employees or more), payroll tax accounted for 3.3% and 3.4% respectively.


WORKERS' COMPENSATION

Total workers' compensation costs during 2010-11 were $10,249 million, representing 1.7% of total labour costs. Workers' compensation costs per employee were slightly higher in the public sector ($1,058) than the private sector ($842). However, as a proportion of total labour costs, workers' compensation costs were higher in the private sector (1.7%) than the public sector (1.4%).

Workers' compensation costs per employee were highest in South Australia ($1,081) and lowest in Tasmania ($673). Workers' compensation costs as a proportion of total labour costs were highest in South Australia (2.1%) and lowest in Tasmania (1.3%).