Earnings


0. Registration entry for subjects


0.1 Name

Earnings

0.2 Subject area

Wages, salaries and income

0.3 Responsible authority; office, division, person etc.

Statistics Iceland
Wages, income and education
Email: wages@statice.is
Telephone: (+354) 528 1250

0.4 Purpose and history

The purpose of data on "Earnings" is to provide information about employees' earnings, distribution and wage structure. New time-series was published in 2016 with data from 2015. The intention is to publish back-data for the years 2008-2014. Until these time-series are complete it is possible to partly use time-series in the section "Earnings - earlier tables" to compare data between years. The new time-series contains information on more subgroups than previous data and tables on occupational groups and occupations include both employees in the public and private sector, where as older time-series only included the private sector. Data on basic earnings have been added and the definition of full-time employees has been narrowed.
Data on earnings were first published in 2005. However, in 2008, a few changes were made in the methodology and the time series were therefore republished from 1998.
When comparing data it has to be kept in mind that the methods have been slightly changed and data have been added.

0.5 Users and application

The main users of the data are individuals, private business enterprises, national and international organisations, employees' organisations and employers' associations, ministries, public institutions and the media. The aim with data on earnings is to inform on salaries, distribution of salaries and structure of salaries. Data are not intended for indexation, as the wage index, as the sample changes according to changes in the labour market. In addition, data are also used in European and international enquiries.

0.6 Sources

Earnings in the labour market are based on Statistics Iceland's data collected through the Icelandic survey on wages, earnings and labour costs (ISWEL). The target population contains all local activity units with more than 10 employees. Every month, each business unit sends a text file containing detailed information on earning structure and cost items, together with background data on the individuals and business units. Contracts have been finalised with Iceland's leading software firms on writing computer programs that fit their own wage software and allow companies to submit standardised and detailed information electronically to Statistics Iceland on wages, labour cost, working hours and necessary background factors.
The population frame is based on the Monthly PAYE (Pay As You Earn) data.

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

When collecting data the aim is to have the collection process as automatic and simple as possible. In the inclusion process the business units are visited, technical aspects concerning the software for wage calculations are addressed, along with details on entering records. The business unit's wage structure is mapped; payroll items are assigned to the wage items of the survey to ensure coordination with other business units. During the visit efforts are made to gather information on the business unit and any potential uniqueness, such as its wage structure or arrangement of working hours. When the inclusion process is considered complete regular submission of data commences.

0.9 EEA and EU obligations

No EU or EEA rules apply.

1. Contents


1.1 Description of content

The purpose of Earnings is to provide information about employees' earnings, distribution and wage structure. Average earnings are based on individuals' earnings with in certain groups, where an individual is defined as an employee working with the same business unit, in the same economic activity and in the same occupation for a certain period of time. Data is broken down by sectors and occupational groups, by economic activities and occupational groups and by occupations. Furthermore, data is provided for men and women.
For full-time employees' basic earnings, regular earnings, total regular earnings and total earnings are calculated, thus composition of earnings can be determined.
Earnings for part-time employees are adjusted to fulltime hours. Only basic earnings and regular earnings are calculated for part-time employees.

The following tables are published in the subject area "Earnings":
· Earnings for the private and the public sector by occupational group and sex
· Distribution of earnings for full-time employees in the private and the public sector by occupational group
· Earnings by economic activity, occupational group and sex
· Distribution of earnings for full-time employees by economic activity and occupational group
· Earnings for full-time employees by occupation and sex

Older time-series are available in the subject area "Earnings - older tables" older tables and can be partly used in comparing new and older data.
The data tables contain two different datasets:
Data tables for the whole labour market 2008-2014:
· Earnings for the private and public sector by sex
· Distribution of earnings for full-time employees in the private and public sector
· Earnings by economic activity (NACE rev.2) and sex
· Distribution of earnings for full-time employees by economic activity (NACE rev.2)

Data tables only containing the private sector 1998-2014:
· Earnings in the private sector for full-time employees by occupational group
· Distribution of earnings in the private sector for full-time employees by occupational group
· Earnings in the private sector for full-time employees by occupation and sex
· Earnings in the private sector by economic activity (NACE rev.1.1) and sex 1998-2011
· Distribution of earnings in the private sector for full-time employees by economic activity (NACE rev.1.1) 1998-2011

1.2 Statistical concepts

Earnings are based on employees' earnings by sector, economic activity, occupational group or occupation.

Population
The population is defined as all employees working in business units with minimum of 10 employees. Data on earnings are based on a subset of employees 18 years and older. The population frame is based on the monthly PAYE (Pay As You Earn) data register.

Sample
Data is based on a sample from the following economic activities (NACE rev.2): Manufacturing (C), Electricity, gas, steam, and air conditioning supply (D), Water supply; sewerage, waste management etc. (E), Construction (F), Wholesale and retail trade; repair of motor vehicles (G), Transportation and storage (H), Information and communication (J), Financial and insurance activities (K), Public administration and defence; compulsory social security (O), Education (P), Human health and social work activities (Q). These economic activities cover about 80% of the Icelandic labour market.
In the economic activity J small enterprises and enterprises in the IT business are missing.
Only employees in the public sector are covered in the economic activities O, P and Q. In O employees in the public sector are about 95% of the population, in P about 90% and 80% in Q. Thus, the weight of employees in the public sector of the total is about 50% instead of 35%.

In older time-series it has to be kept in mind that the ISWEL sample has changed over time and data in older time-series are based on the following economic activities:
  • 1998-2004: Data is based on NACE rev.1.1 and includes the economic activities of Manufacturing (D), Construction (F), Wholesale and retail trade; repair (G), and Transport, storage and communication (I).
  • 2005-2011: Data is based on NACE rev.1.1 and includes the economic activities of Manufacturing (D), Construction (F), Wholesale and retail trade; repair (G), Transport, storage and communication (I), and Financial intermediation (J).
  • 2012-2014: Preliminary numbers. Data is based on NACE rev.2
  • For the private sector data include the economic activities Manufacturing (C), Electricity, gas, steam, and air conditioning supply (D), Construction (F), Wholesale and retail trade; repair of motor vehicles (G), Transportation and storage (G), Information and communication (J), and Financial and insurance activities (K). In the economic activity J small enterprises and enterprises in the IT business are missing.
  • For the whole labour market data include the above economic activities and Public administration and defence; compulsory social security (O), Education (P), Human health and social work activities (Q). Only employees in the public sector are covered in the economic activities O, P and Q.

Variables
  • Earnings: Basic wages and salaries, additional allowances, expenses payments, bonus payments, shift premium, sickness pay, overtime pay, piecework, irregular bonuses, lump-sum payments, and other irregular payments.
Hours paid: Normal hours, hours with shift premium and overtime hours.
Background factors: Local activity, employee, occupation, economic activity, sex and age.

Statistical variables
  • Weights: Weights are based on sectors and economic activities as recorded in the monthly PAYE (Pay As You Earn) data register. In addition, an individual weight is assigned based on the number of working months during the year.
  • Mean: The mean is the weighted mean, taking into account weights.
  • Median: The median is a weighted median and divides the distribution of an ordered group by wages or working hours into half.
  • Quartiles: The quartiles are weighted quartiles and divide the distribution of an ordered group by wages or working hours into quarters.
  • Deciles: The deciles are weighted deciles and divide the distribution of an ordered group by wages or working hours into 10 groups.
  • Decile share ratio: The decile share ratio is the ratio between the total sums of earnings of employees in the 10th decile divided by the total sum of earnings by employees in the first decile.
  • Quartile share ratio: The quartile share ratio is the ratio between the total sum of earnings by employees in the fourth quartile divided by the total sum of earnings by employees in the first quartile.
  • Percentage under the mean: Percentage of employees receiving salaries under the mean.
  • Distribution: The distribution is estimated sing the mean, median, quartiles, deciles, decile share ratio and quartile share ratio. Data is more distributed as the quartiles and deciles are further apart. If the mean is higher than the median it can be estimated that some individuals in the group have considerable higher earnings than the majority in the group. These individuals contribute to a higher mean, which is very sensitive to outliers. If the mean and median are similar it can be estimated that few outliers are in the data. Percentage under the mean gives also an estimation of distribution. If the mean and median were the same, 50% of employees would have earnings under the mean. As the percentage under the mean gets higher, more outliers are in the data that affect the mean.

Groupings
  • Sectors: Employees in the public sector work with municipalities and the central government. Other employees belong to the private sector.
  • Economic activities: Economic activities are based on ISAT08 (i.e. the Icelandic version of NACE rev.2).
  • Occupational groups and occupations: Occupational groups and occupations are based on ISTARF95 (i.e. the Icelandic version of ISCO-88).
  • Full-time employees: Full-time employees are defined as employees whose total daytime or shift work hours are equal to or exceed 90% of normal working hours, e.g. 173.3 for workers. In older tables overtime-hours are also part of the full-time definition.

Definitions
  • Basic earnings: Basic earnings are the remuneration for regular daytime working hours without any supplements. Basic earnings for part-time employees are full-time equivalent.
  • Regular earnings: Regular earnings are the remuneration for regular working hours that is ordinary working hours according to collective agreements, both daytime and shift-work hours. Regular earnings for part-time employees are full-time equivalent.
  • Total regular earnings: Total regular earnings are the total remuneration per month including over-time. Total regular earnings are only calculated for full-time employees.
  • Total earnings: Total earnings are the total remuneration per month including piecework, irregular bonuses and various other irregular payments, excluding payments in kind. Employees' benefits are excluded. Total earnings are only calculated for full-time employees.
  • Hours paid: Hours paid is monthly working hours for full-time employees, whether being daytime, shift-work or overtime hours. To obtain weekly hours the hours paid is divided by (52/12). Hours paid are usually a good estimator of hours worked. However in some occupational groups, for example among managers and professionals, fixed-wage contracts are common. Thus, employees do not get paid overtime, and their working hours might be underestimated. Hours paid are only calculated for full-time employees.

2. Time


2.1 Reference periods

Earnings in the labour market are based on individual's average monthly earnings over one year.

2.2 Process time

Earnings in the labour market are published on the web page of Statistics Iceland at the latest in June every year.

2.3 Punctuality

In accordance with the release plan on the web page of Statistics Iceland, http://www.statice.is/

2.4 Frequency of releases

Annually.

3. Reliability and security


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 economic activities and size. 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.
Municipalities are stratified according to geographical area and size. A complete dataset is obtained from the central government.
To ensure quality data is gathered directly from participating business units. Before entering the survey the business units are visited and wage structure is examined and payroll items are assigned to the wage items of the survey to ensure coordination with other business units.
Population frame is updated yearly and new business units are simultaneously included into the survey as other quit participation and efforts are continuously made to improve the data quality through feedback to the business units and through updating and improvement of the quality checking system.
The sample structure is dynamic by year and weights are estimated annually. The weights are based on the Monthly PAYE (Pay As You Earn) data register.
The sampling error has not been calculated. Work is continuously being carried out to enhance the quality of the data reports.

3.2 Sources of errors

In the calculation of earnings both sampling errors and non-sampling errors can occur.

Sampling errors: Sampling errors may occur if the sampled business units do not reflect the population accurately. The population frame is based on monthly PAYE (Pay As You Earn) data and is updated annually.

Other errors: Coverage/frame errors due to incomplete population frame, non-response errors and measurement errors. Coverage/frame errors can arise if business units are incorrectly registered according to the industry classification, for example if business units are operating in more than one industry but only registered in one of the industries or if newly established business units are not a part of the population frame. In order to minimize errors due to imperfect population frame, effort is made to improve the data on a regular basis. None-response errors and measurement errors are errors that occur in the data collection process. By maintaining a constant partnership with the sampled business units these errors are minimized. In many business units, fixed-wage contracts are common. Thus, employees do not get paid for overtime work, and their working hours might be underestimated.

3.3 Measures on confidence limits/accuracy

The statistical uncertainty is not calculated.

4. Comparison


4.1 Comparison between periods

When comparing data between periods one must take into account that the sample structure and the quality of data handling has changed because of the extending survey coverage witch is still taking place.

4.2 Comparison with other statistics

Older time-series are found in "Earnings - earlier tables". Data on sectors and economic activities are comparable, but data and methods have been improved. Data on occupational groups and occupations are only partly comparable as data on the public sector is missing in earlier time series.
Regular earnings can be extrapolated by the wage index, which is published monthly. The wage index is based on hourly regular earnings that are comparable to monthly regular earnings.

4.3 Coherence between preliminary and final statistics

Date is preliminary because data on certain groups are missing from the dataset.

5. Access to information


5.1 Forms of dissemination

· News, released on Statistics Iceland's website
· Statistics, categorised statistical web tables
· Statistical Series, Hagtíðindi

5.2 Basic data; storage and usability

The data collected in the survey of wages, earnings and labour costs:
1.Company ID No. (scrambled)
2.Municipality
3.Economic sector (Nace Rev. 2)
4.Employee's ID No. (scrambled)
5.Month and year of birth
6.Sex
7.Union
8.Pension fund
9.Education code (ISCED)
10.Occupation code (4 digit ISCO88)
11.Length of service (date of employment)
12.Proportion to full-time employment
13.Pay period
14.Contractual working hours
15.Annual leave entitlement percentage
16.Annual leave arrangement
17.Agreement
18.Wage group
19.Wage level
20.Basic wages and salaries
21.Normal hours
22.Additional allowances
23.Expenses payments
24.Bonus payments
25.Piecework payments and output work
26.Shift premium
27.Hours with shift premium
28.Overtime pay
29.Overtime hours
30.Sickness pay
31.Sickness hours
32.Lump sums and special payments
33.Committee or management payments
34.Allowances for transport
35.Fringe benefits
36.Other payments
37.Remuneration paid for leave
38.Pension fund contribution
39.Social security tax
40.Sickness fund payment
41.Vacation (union) housing fund fee
42.Science fund / continued education
43.Other labour costs
44.First day of payment period
45.Final day of payment period

Some data are not obtainable with all local activities like sickness payment when their payroll system does not include that information.
The collected data are confidential and Statistics Iceland rules of procedure for treating confidential data are applied. For information on rules for treating confidential data see: http://www.statice.is/about-statistics-iceland/laws-and-regulations/statistics-icelands-rules-of-procedure-for-treating-confidential-data/

5.3 Reports

Changes and development of Earnings are reported alongside the publishing of new data.

5.4 Other information

Further information is provided by the department of Wages, income and education.

© Hagstofa �slands, �ann 30-11-2016