GLOSSARY


C E F G I P S W

Costs per employee

Labour costs incurred in respect of employees, divided by the number of employees, for businesses/organisations operating at the end of 2010-11. The number of employees relates to the last pay period ending on or before 30 June of the reference year. Costs and employee numbers for businesses/organisations which ceased operating during the reference year are excluded.

Earnings

Total employee remuneration during the reference year, regardless of the form of remuneration. This comprises:

• gross wages and salaries
• the value of salary sacrificed (excluding fringe benefits tax)
• the ungrossed value of fringe benefits provided by employers through arrangements other than salary sacrifice
• severance, termination and redundancy payments.

Gross wages and salaries is net of amounts reimbursed for employees on government employment programs. Workers’ compensation payments paid through the payroll and fringe benefits tax paid by employers are excluded from earnings.

Employees

The number of wage and salary earners who received pay for any part of the last pay period ending on or before 30 June of the reference year.

Employer size

To derive estimates of employer size, each of the units selected in the survey was allocated a size classification based on the number of employees reported for that unit during the last pay period ending on or before 30 June of the reference year. The size classification reflects the size of a unit in each state or territory and not necessarily the size of the unit Australia wide.

Fringe benefits

Non-cash benefits, such as goods and services, provided to employees in respect of employment. Examples include use of a work car, a cheap loan, or health insurance costs. These benefits may be provided through salary sacrifice or other arrangements. Employer contributions to superannuation for an employee (including through a salary sacrifice arrangement), when paid to a complying superannuation fund, are not considered to be fringe benefits.

Fringe benefits tax

A tax paid by employers due to fringe benefits provided for their employees. There are exemptions which apply to some categories of employers (e.g. certain not-for-profit organisations) and certain benefits (e.g. laptop computers). Estimates of the ungrossed value of fringe benefits (a component of earnings) and fringe benefits tax both relate to the year ended 31 March.

Gross wages and salaries

Payments to employees before tax and other items (such as employee contributions to superannuation) are deducted, and comprise:

• payments for time worked
• payments for time not worked (such as annual, sick and other leave, and public holidays)
• leave loading payments.

Gross wages and salaries includes:

• amounts paid from interstate or overseas
• ordinary time and overtime earnings
• over-award payments
• penalty payments, shift and other remunerative allowances
• retainers and commissions paid to employees who received a salary
• bonuses and similar payments
• payments under incentive, piecework or profit sharing schemes
• advance and retrospective payments
• salaries and fees paid to company directors and members of boards who received a salary.

Gross wages and salaries excludes:

• reimbursements of expenses, e.g. travel, entertainment, meals, etc.
• drawings from profits by directors or office holders
• salary sacrifice amounts
• wages and salaries reimbursed under government employment programs
• workers’ compensation payments paid through the payroll.

Industry

Classified according to the Australian and New Zealand Standard Industrial Classification (ANZSIC).

Payroll tax

Employers whose wage and salary payments reach a specified level, as defined in each state’s or territory’s payroll tax legislation, are liable to pay this tax. Employers may claim exemptions for some categories of employees. Religious, not-for-profit and general government organisations are generally exempt from payroll tax.

Salary sacrifice

Salary sacrifice is an arrangement between an employer and an employee, where the employee agrees to forego part of their entitlement to salary or wages in return for the employer providing benefits of a similar cost (to the employer). Common types of benefits include employer contributions to superannuation funds and novated leases for motor vehicles.

Sector

Public sector organisations comprise local government authorities and all government departments, agencies and authorities created by, or reporting to, the national or state/territory Parliaments. All remaining entities are classified as private sector businesses.

Severance, termination and redundancy payments

Costs incurred by employers on resignation, retirement, retrenchment or disablement of an employee.

Superannuation

Employer contributions to superannuation funds on behalf of employees. Contributions by employees, or employer contributions under salary sacrifice arrangements, are excluded.

Workers’ compensation

Workers’ compensation costs comprise, in general, the costs of insurance premiums paid plus any other costs not reimbursed by insurers. Premium rates are usually determined by considering the industry of the employer and the employer’s previous claims history. Non-reimbursed costs may vary depending on the legislation which applies in each state, but can include wages and salaries, other costs such as medical and legal costs, and lump sum settlement payments. In addition, most states and territories allow very large employers to self-insure, where, except in extreme circumstances, workers’ compensation costs are borne by the employers. The direct costs of self-insurance are included in the estimates of workers' compensation costs in this publication.