- Registration entry for subjects
- Reliability and security
- Access to information
0.2 Subject area
Wages, salaries and income
0.3 Responsible authority; office, division, person etc.
Telephone: (+354) 528 1250
0.4 Purpose and history
The wage index is a monthly index The wage index is calculated and published according to the legal act on the wage index No. 89/1989. Aggregated index for the entire labour market has been published monthly since January 1989. According to the legal act the index is intended to reflect, to the extent possible, changes in total wages of all employees paid for fixed hours (i.e. all wages paid for day-time and fixed overtime hours, including additional payments and bonuses), excluding irregular payments (irregular overtime, irregular bonuses etc.). Employers' social contributions and taxes are excluded. Calculation of the index is based on a comparison of wages and salaries for two consecutive months.
The breakdown of wage index shows the changes of regular hourly wages in the private sector by occupational group and economic activity. The index also shows changes of wages in the public sector.
0.5 Users and application
Users of the wage index and sub-indices are individuals, private business enterprises, national and international organisations, employees' organisations and employers' associations, ministries and public institutions.
The wage index is based on the data collected through the Statistics Iceland Icelandic survey on wages, earnings and labour costs (ISWEL). The survey is based on a sample of private companies and is performed by Statistics Iceland. Data is collected monthly directly from the company's payroll systems and contains information on all labour cost. In the public sector the data is collected directly from the payroll systems of local governments and from the Central Government Accounting Office.
0.7 Legal basis for official statistics
Statistics collected, generated and disseminated by Statistics Iceland are governed by act on Statistics Iceland No. 163/2007.
0.8 Response burden
The Icelandic survey on wages, earnings and labour costs (ISWEL) is based on a lengthy tradition of collecting data directly from the software each company uses for calculating wages, i.e. from the administrative records of the enterprise. Monthly, each company sends a text file containing detailed information on earning structure and cost items, together with background data on the individuals and the company. Taking advantage of data collection by direct access minimises the bias caused by recording. Moreover, the expense and nuisance companies associate with data collection and the time lost through reporting is kept to a minimum. This is important, since a substantial number of companies are obliged to participate in the survey on a regular basis so as to maintain a representative sample. In order to collect metadata on each company and its pay structure, great effort is expended on the inclusion process for each enterprise as it enters the survey.
0.9 EEA and EU obligations
No EU or EEA rules apply.
1.1 Description of content
The purpose of the index is to reflect changes in total wages paid for fixed working hours. The base of the wage index is December 1988. The base for the breakdown is, however, December 2014.
The weight structure of the index is based on administrative registers. The industrial classification used is ÍSAT95 is the Icelandic equivalent to NACE rev.1 classification and the occupational classification is to ÍSTARF95, an Icelandic version of ISCO-88. Each economic activity and occupation group is given a weight based on their share in total wages. The weights for occupation groups and industries are revised regularly. At the elementary level, weighted geometric average of labour unit prices is calculated. At the aggregation level, Fisher index formula is used.
1.2 Statistical concepts
The comparison covers only those employees who are in the same job, within the same company and same industry, during the two relevant months.
Regular monthly salaries are the remuneration for regular working hours excluding payments for overtime as well as piecework, irregular bonuses and various other irregular payments. Regular working hours are defined as ordinary working hours according to collective agreements, both daytime and shift-work hours.
Population is defined as all employees 18 years or older working in companies with minimum 10 employees. The population frame is based on the monthly PAYE (Pay As You Earn) data.
Occupations are classified according to ÍSTARF95, an Icelandic version of ISCO-88. The comparison covers only those who are in same job (5 digit code) during the two relevant months.
Same company in same industry
Industries are classified according to ISAT08 which is the Icelandic equivalent to NACE rev.2 classification (down to 5 digit level).
The wage index is based on data collected from companies operating in the following industries in the private sector: Manufacturing (C), Construction (F), Wholesale and retail trade (G ), Transportation and storage (H), Financial and insurance activities (K), Energy and water supply (D_E) and Information and communication (J).
The sample of public servants covers employees in a sample of municipalities, including the capital city of Reykjavik (local government), as well as data from. The Central Government Accounting Office (central government).
As data is drawn from different sources, weights are used to reflect the structure of the Icelandic labour market. As there is different information available on different parts of the data, the weights are based on information available on a given time.
Weights are adjusted annually parallel to the data release on the 1st. quarter every year. Weights are based on administrative registers on taxes and data from the ISWEL survey.
In the private sector weights are based on classification on occupations (ÍSTARF95 - based on ISCO88) and economic activities (ÍSAT08 - based on NACE rev.2). In 2015 and 2016 the weights are as follows:
Service workers 1.5 %
Craft workers 6.2%
General workers 14.0%
Service workers 0.0 %
Craft workers 4.9%
General workers 3.1%
Wholesale and retail trade (G)
Service workers 10.0 %
Craft workers 0.9%
General workers 2.8%
Transportation and storage (H)
Service workers 2.1 %
Craft workers 0.4%
General workers 3.5%
Financial and insurance activities (K)
Service workers 0.1%
Craft workers 0.0%
General workers 0.1%
Energy and water supply (D_E)
Service workers 0.1%
Craft workers 0.6%
General workers 0.7%
Information and communication (J)
Service workers 0.2%
Craft workers 0.2%
General workers 0.1%
The private sector weights about 74.0% of the wage index.
In the public sector information about occupational groups is not available. Thus weights are based on union federations.
The weights of the unions with in the central government are the following in 2015 and 2016:
Federation of State and Municipal Employees (BSRB) 24.0%
The Icelandic Confederation of Labour (ASÍ) 4.0%
Association of Academics (BHM) 32.2%
The Icelandic Teachers' Union (KÍ) 8.2%
Other academics 22.2%
Senior officials 5.8%
Non-union members 1.3%
Other unions 2.4%
The central government weights about 14.0 % of the wage index.
The weights of the unions with in the local government are the following in 2015 and 2016:
Federation of State and Municipal Employees (BSRB) 29.1%
The Icelandic Confederation of Labour (ASÍ) 16.8%
Association of Academics (BHM) 11.0%
The Icelandic Teachers' Union (KÍ) 38.9%
Other academics 2.0%
Senior officials 0.7%
Non-union members 1.1%
Other unions 0.3%
The local government weights about 12.0% of the wage index.
2.1 Reference periods
Reference period for the wage index is the previous month. The wage index for January is published around 22nd of February and is based on comparison of wages between December and January. The breakdown for January is published at the end of April.
2.2 Process time
Processing for the wage index is 20-24 days. Processing time for the decomposed wage indices is 80 to 90 days.
The wage index is published according to the advance release calendar at 9:00 am. The advance release calendar for each year is published on the web site of Statistics Iceland http://www.hagstofa.is.
2.4 Frequency of releases
3.1 Accuracy and reliability
The Icelandic survey on wages, earnings and labour costs is a sample survey. The sample is a stratified cluster sample. where the sample unit is the local activity unit and the observation unit is the employee. The target population contains all local activity units with no fewer than 10 employees. The population frame is based on monthly PAYE (Pay As You Earn) data. PAYE data reflects the sum of wages reported to the tax authorities.
The population is stratified in sections and subsections according to NACE Rev. 2. Activity units with more than A/m employees are selected with a probability of 1 (where A is the number of employees in the stratum and m is the number of activity units to be selected from the stratum). For the rest of the population. a simple random sample (srs) is selected from each stratum.
During visits to participating companies. technical aspects concerning the software for wage calculations are addressed. along with details on entering records. such as classification of occupations according to ÍSTARF95 standard. The company's wage structure is examined. assigning payroll items to the wage items of the survey to ensure coordination with other companies. Population frame is updated yearly and new companies are simultaneously included into the survey as other quit participation and efforts are continuously made to improve the data quality through feedback to the enterprises and through updating and improvement of the quality checking system.
3.2 Sources of errors
In the calculation of an index various errors can arise. e.g. sampling errors (coverage errors. non-response errors) which may occur if the sampled companies do not reflect the population accurately. The population frame is based on monthly PAYE (Pay As You Earn) data. Errors can arise if enterprises are incorrectly registered according to the industry classification. in cases of companies operating in more than one industry but only registered in one of the industries. if newly established companies are not a part of the population frame etc. In order to minimize errors due to imperfect population frame. effort is made to improve the data on regular basis.
3.3 Measures on confidence limits/accuracy
The statistical uncertainty is not calculated.
4.1 Comparison between periods
The wage index is comparable over time.
4.2 Comparison with other statistics
The wage index is intended to be a timely indicator of general changes in wages since 1989. The breakdown is published since 2015 and is intended to reflect changes in regular wages in private sector by occupational group and economic activity. as well as overall changes in regular wages in the public sector.
4.3 Coherence between preliminary and final statistics
Preliminary statistics are not published.
5.1 Forms of dissemination
Basic data is stored by Statistic Iceland and is not accessible to others.
Statistics Iceland operates in accordance with the United Nations Fundamental Principles of Official Statistics. The European Statistics Code of Practice as well as the Act on the Protection of Privacy regarding the processing of personal data. Furthermore Statistics Iceland has laid down its own Rules of Procedure for Treating Confidential Data.
5.2 Basic data; storage and usability
Basic data is stored by Statistic Iceland and is not accessible to others than employees of the Wage unit.
No reports are published about the wage index.
5.4 Other information
Further information is provided by the department of Wages, income and education.
© Hagstofa �slands, �ann 18-10-2016