Compensation of employees

Latest release
Australian System of National Accounts: Concepts, Sources and Methods
Reference period
Edition 8

21.48    Annual state estimates of COE by industry are compiled from a range of ABS survey data for the state accounts, Quarterly state estimates of COE are produced quarterly for Australian National Accounts: National Income, Expenditure and Product.

Annual sector compensation of employees

21.49    Annual state totals for COE are compiled by aggregating sector-based subcomponents which include private and public sector estimates of cash wages and salaries, payments in kind, and employer social contributions (ESC). All components are estimated using a top-down approach; that is, national benchmarks are apportioned across states and territories using source data indicators based on the location of the employer.

21.50    The following table outlines the data sources used to estimate annual compensation of employees.

Table 21.1 Annual compensation of employees data sourcesby component
ItemComment
Method
   

National estimates of sectoral COE are apportioned across states and territories using relevant output indicators:

\(\large{ \text {state sectoral COE} = \text{national sectoral COE} \times \left(\frac{\text{state employee expenses indicator}}{\text{national employee expenses indicator}}\right)}\)

Wages and salaries indicators
 Private sector
  Non-farm
   

For the current year, wages and salaries data from the Quarterly Business Indicators Survey (QBIS) is used to extrapolate forward wages and salaries data from EAS. Those extrapolated values are used to apportion national private non-farm wages and salaries across states and territories.

From 2006-07 to the reference year, wages and salaries data from the Economic Activity Survey (excluding the Agriculture subdivision) is used to apportion national private non-farm wages and salaries across states and territories.

For values prior to 2006-07, output indicators were estimated consistent with the source data and methods outlined in the sixth edition of this manual (2015). Those output indicators are used to backcast EAS data from 2006-07. The backcasted values are used to apportion national private non-farm wages and salaries across states and territories.

  Farm
   

For the current year, total hours worked estimates from the Labour Force Survey are used to extrapolate EAS wages and salaries data forward. Those extrapolated values are used to apportion national private farm wages and salaries across states and territories.

From 2006-07 to the reference year, Agriculture subdivision wages and salaries data from the Economic Activity Survey is used to apportion national private farm wages and salaries across states and territories.

For values prior to 2006-07, output indicators were estimated consistent with the source data and methods outlined in the sixth edition of this manual (2015). Those output indicators are used to backcast EAS data from 2006-07. Those backcasted values are used to apportion national private farm wages and salaries across states and territories.

 Public sector
  Defence
   Wages and salaries for defence employees are collected at a national level in Government Finance Statistics (GFS). The national estimates are apportioned across states and territories using the proportion of permanent military personnel in each state and territory.
  Non-defence
   

Wages and salaries for non-defence public sector (across all jurisdictions) employees are collected in GFS.

Wages and salaries of domestic Commonwealth public sector employees are apportioned across states and territories based on the share of earnings of employees in each jurisdiction. Estimates from the Public Sector Employment and Earnings (PSEE) are used to determine the state shares.

Payments to staff of Australian embassies and consulates overseas, are allocated to the Australian Capital Territory.

 Non-cash wages – payments in kind
   

Data for state and territory estimates of the value of fringe benefits payable to public sector employees are collected in the Survey of Major Labour Costs (MLC). This survey is run intermittently.

Estimates for the latest years, and for years between surveys, are interpolated in line with underlying wage growth for each jurisdiction by sector.

Employer social contributions
 Private sector
   

Data for state and territory estimates of employer social contributions are sourced from the intermittent MLC survey.

Estimates for the latest years, and for years between surveys, are interpolated in line with underlying wage growth for each jurisdiction by sector.

 Public sector
   

Superannuation paid to public sector employees is collected in GFS. All other components of employer social contributions are sourced from the intermittent MLC survey.

Estimates for the latest years, and for years between surveys, are interpolated in line with underlying wage growth for each jurisdiction by sector.

State by industry compensation of employees

21.51    Annual state by industry splits of COE are produced using a top-down approach. National industry estimates of COE are apportioned across states and territories using state by industry indicators of wages and salaries.

21.52    The state by industry division indicators of wages and salaries are created by summing data from the Economic Activity Survey for corporations. For the general government sector data from Public Sector Employment and Earnings is used since 2022-23, with the prior period using the Survey of Employment and Earnings.

21.53    In the current year, where EAS data is not available, wages and salaries data from the Quarterly Business Indicators Survey and estimates of hours worked from the Labour Force Survey are used as indicators

21.54    The state by industry COE estimates are constrained to two sets of benchmarks:

  1. state by sector estimates of COE
  2. national industry division estimates of COE.

21.55    Any residual imbalance is allocated across the state by industry estimates to ensure additivity to both benchmarks.

21.56    The following tables provide additional detail on the method and data sources used to estimate state COE by industry:

Table 21.2 Compensation of employeesAll industry divisions, excluding Agriculture, forestry and fishing, Financial and insurance services, and Public administration and safety
ItemComment
Method  
  

For the ANZSIC divisions above, estimates of state industry COE are allocated using relevant wages and salaries indicators:

\(\large{ \text {state COE} = \text{national COE} \times \left(\frac{\text{state wages and salaries indicator}}{\text{national wages and and salaries indicator}}\right)} \)

Wages and salaries indicator
 Current year
  Wages and salaries data from the Quarterly Business Indicators Survey is used to extrapolate forward EAS wages and salaries data. Those extrapolated values are added to PSEE estimates and then are used to apportion national COE across states and territories.
 2006-07 to reference year
  Wages and salaries data from the Economic Activity Survey and Public Sector Employment and Earnings (since 2022-23) are used to apportion national COE across states and territories. The SEE was used instead of PSEE in the years prior to 2022-23.
 Prior to 2006-07
  For values prior to 2006-07, output indicators were estimated consistent with the source data and methods outlined in the sixth edition of this manual (2015). Those output indicators are used to backcast EAS data from 2006-07. Those backcasted values are added to SEE estimates and then used to apportion national COE across states and territories.
Table 21.3 Compensation of employees by industryAgriculture, forestry and fishing (ANZSIC Division A)
ItemComment
Method
  

Estimates of state industry COE are apportioned across states and territories using relevant output indicators:

\(\large{ \text {state COE} = \text{national COE} \times \left(\frac{\text{state wages and salaries indicator}}{\text{national wages and and salaries indicator}}\right)} \)

Wages and salaries indicator
 Current year
  Total hours worked from the Labour Force Survey is used to extrapolate forward EAS wages and salaries. Those extrapolated values are added to PSEE estimates to derive a state indicator which is used to apportion national COE across states and territories.
 2006-07 to reference year 
  Wages and salaries data from the Economic Activity Survey and Public Sector Employment and Earnings (since 2022-23) are used to apportion national COE across states and territories. The SEE was used instead of PSEE in the years prior to 2022-23.
 Prior to 2006-07
  For values prior to 2006-07, output indicators were estimated consistent with the source data and methods outlined in the sixth edition of this manual (2015). Those output indicators are used to backcast EAS data from 2006-07. Those values are added to SEE estimates and then used to apportion national COE across states and territories.
Table 21.4 Compensation of employees by industryFinancial and insurance services ( ANZSIC Division K)
ItemComment
Method
  

Estimates of state industry COE are apportioned across states and territories using relevant output indicators:

\(\large{ \text {state COE} = \text{national COE} \times \left(\frac{\text{state wages and salaries indicator}}{\text{national wages and and salaries indicator}}\right)} \)

Wages and salaries indicator
 2006-07 to current year
  Wages and salaries data from the Quarterly Business Indicators Survey and Public Sector Employment and Earnings  (since 2022-23) are used to apportion national COE across states and territories. The SEE was used instead of PSEE in years prior to 2022-23.
 Prior to 2006-07
  For values prior to 2006-07, output indicators were estimated consistent with the source data and methods outlined in the sixth edition of this manual (2015). Those output indicators are used to backcast QBIS data from 2006-07. Those backcasted values are added to SEE estimates and then used to apportion national COE across states and territories.
Table 21.5 Compensation of employees by industryPublic administration and safety (ANZSIC Division O)
ItemComment
Method
  

Estimates of state industry COE for are apportioned across states and territories using relevant output indicators:

\(\large{ \text {state COE} = \text{national COE} \times \left(\frac{\text{state wages and salaries indicator}}{\text{national wages and and salaries indicator}}\right)} \)

Wages and salaries indicator
 Current year
  Total state private sector COE is used to extrapolate forward EAS wages and salaries data. Those extrapolated values are added to PSEE estimates to derive a state indicator which used to apportion national COE across states and territories.
 2006-07 to reference year 
  Wages and salaries data from the Economic Activity Survey and Public Sector Employment and Earnings (since 2022-23) are used to apportion national COE across states and territories. The SEE was used instead of PSEE in the years prior to 2022-23.
 Prior to 2006-07
  For values prior to 2006-07, output indicators were estimated consistent with the source data and methods outlined in the sixth edition of this manual (2015). Those output indicators are used to backcast EAS data backwards from 2006-07. Those backcasted values are added to SEE estimates and then used to apportion national COE across states and territories.

Quarterly compensation of employees

21.57    Quarterly state totals for COE are compiled in a manner similar to the annual state by sector COE estimates. Quarterly state COE estimates are aggregated from values of sector-based subcomponents that are calculated by apportioning national estimates across states and territories. Quarterly estimates are benchmarked to annual state totals to ensure consistency between quarterly and annual estimates.

21.58    The following table outlines the method and data sources used to estimate quarterly state compensation of employees.

Table 21.6 Quarterly compensation of employees data sources – by component
ItemComment
Wages and salaries
 Private sector
  Non-farm
   Wages and salaries for private sector non-farm employees are based on estimates from the Quarterly Business Indicators Survey.
   Quarterly farm wages and salaries are apportioned across states and territories using estimates of employment from the Labour Force Survey.
 Public Sector
  Defence
   Wages and salaries for defence employees are collected at a national level in Government Finance Statistics. The national estimates are apportioned across states and territories using the proportion of permanent military personnel in each state and territory.
  Non-defence
   

Wages and salaries for non-defence public sector employees are collected in GFS.

Wages and salaries of domestic Commonwealth public sector employees are apportioned across states and territories based on the earnings of employees in each jurisdiction - compiled from ATO data in Public Sector Employment and Earnings since 2022-23. In prior years the the Survey of Employment and Earnings was used.

Payments to staff of Australian embassies and consulates overseas, are allocated to the Australian Capital Territory.

 Non-cash wages – payments in kind
   Estimates for quarterly payments in kind are moved in line with underlying wage growth for states.
Employer social contributions
   Estimates for quarterly employer social contributions are moved in line with underlying wage growth for states.
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