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INTRODUCTION

1 This electronic release contains estimates of the total number of wage and salary earners and their characteristics for various levels of the Australian Standard Geographical Classification (ASGC), including Statistical Local Areas (SLAs) and Local Government Areas (LGAs), in each state and territory of Australia for the year 2000-01.

2 The data have been compiled from the Australian Taxation Office's (ATO) Individual Income Tax Return Database and are part of the Australian Bureau of Statistics' (ABS) program to increase the range of regional statistics available, particularly through the use of administrative information collected by other government agencies.

3 The ABS wishes to acknowledge the support the Australian Taxation Office has provided in compiling these statistics and in assisting the ABS in its aim to increase the range of regional data available to users of regional statistics. Without such support the wide range of statistics published by the ABS would not be available.


CONFIDENTIALITY

4 All individual income tax statistics provided to the ABS by the ATO have been in aggregated form only, at the SLA level. Information about individual taxpayers has not been released to the ABS.

5 The statistics, prior to being provided to the ABS, have also been subjected to a confidentiality process that randomly adjusts cells in tables with small values. This includes altering some small cells to zero. Caution should therefore be exercised in deducing that there are no people in an area with certain characteristics and, in general, no reliance should be placed on cells with small values in tables. The application of this process prevents the risk of inadvertently releasing any information that may identify an individual while, for most purposes, the overall information value of the statistics have not been impaired.


SCOPE AND COVERAGE

6 The main functions and responsibilities of the Australian Taxation Office are to administer taxation legislation and to collect a wide variety of taxes. The ATO therefore collects data from its reporting population as part of its processes to calculate income tax liability for those persons who are required to lodge an income tax return.

7 The ATO database covers all individuals who submit an individual income tax return and includes persons with income from one or more of a range of sources such as wages and salary, own business, superannuation, investments and government pensions, benefits or allowances. However, the scope of the ATO statistics presented in this electronic publication relate only to persons with wage and salary income, i.e. wage and salary earners (or employees). These wage and salary earners may also have other sources of income.

8 As the ATO's income tax return is designed to obtain a person's total income from various sources over a financial year, and not the employment status of a person at a particular point in time (as is the case in ABS collections), wage and salary earners have been defined as:

persons aged 15 years and over who have submitted an individual income tax return and for whom wage and salary income was the principal (or main) source of income for the financial year.

9 Wage and salary income, as reported on the income tax return, includes gross income as shown on the 'PAYG payment summary - individual non-business' as well as allowances, commissions, bonuses, tips, gratuities, consultation fees, honoraria and other payments for services. Allowances and other earnings may include car, travel or transport allowances, allowances for tools, clothing or laundry and dirt, risk, meal or entertainment allowances. (Note: PAYG (Pay as You Go) payment summaries were previously known as Group Certificates). The data have been collated from questions 1 and 2 in the 2000-01 individual income tax return.

10 Defining wage and salary earners in this way provides an indication of the main employment status, for the financial year, of persons submitting individual income tax returns which, with annual time series data, provide valuable information about employment activity and variations in earned income in regions over time. It should be noted that this definition does not take account of whether wage and salary earners work on a full-time or part-time basis. Consequently, differences in the extent of part-time work may account for some differences in the number of wage and salary earners and average wage and salary incomes across regions. Similarly, average wage and salary incomes may be affected by overtime earnings and multiple job holdings.

11 The following diagram summarises the ABS categorisation of persons reporting wage and salary income on individual income tax returns lodged with the ATO. The shaded area represents wage and salary earners based on the ABS definition as specified above.

PERSONS LODGING INDIVIDUAL INCOME TAX RETURNS, Australia, 2000-01



(a) Persons reporting wage and salary income may also have other sources of income.

• minimises confidentiality restrictions as data are not output for postcodes with small populations;
• enables the data to be more easily compared with standard ABS output;
• enables the data to be output for other standard ABS geographic areas such as Statistical Divisions, Statistical Subdivisions and Local Government Areas; and
• provides flexibility so that data can be provided for the different regions of interest being studied by users of regional data (which are usually groupings of SLAs and/or LGAs).

Postcode	Number of wage and salary earners	Conversion factor	SLA share
	no.	no.	no.
3219	7,221	0.6260	4,520
3221	2,680	0.2671	716
3224	3,294	1.0000	3,294
SLA total			8,530

• in applying the concordances it is assumed that the particular characteristics of any data item are uniformly distributed across a postcode area and therefore concorded data may not truly reflect the distribution of the characteristics of the population. In some cases, where the same postcode is split across two or more SLAs and there are no other contributing postcodes, distinct numerical estimates will be derived but rates or averages will be identical for each SLA (as these will be equivalent to the original rate or average of the contributing postcode);
• the conversion factors are based on total population only but have been applied across all ATO data items, i.e. the number of wage and salary earners, wage and salary income, total income and sex, age and occupation groups;
• some official postcodes (such as PO boxes, etc.) do not correspond to residential areas but may still have been reported under the current home address field on the income tax return. Data for these and other ‘invalid’ postcodes, such as those due to incorrect reporting or processing errors, have been included in an ‘unknown’ category for each state and territory and for Australia where the state or territory was not known; and
• concorded figures have been rounded so discrepancies may occur between sums of the component items and totals.

ABS CATEGORIES OF EMPLOYED PERSONS(a), Australia, May quarter 2001


(a) Persons aged 15 years and over.
Source: ABS Labour Force Survey

• a number of low income earners, including wage and salary earners, are not required to submit a tax return and therefore may not be included in the statistics. For example, where income is below the annual tax free threshold and tax was not withheld, a return is not required to be submitted to the ATO. (Note: The tax free threshold was $5,400 for 1995-96 to 1999-00 and $6,000 for 2000-01). It should also be noted that changes to the tax free threshold may have a minor effect on averages.
  
• some persons may move address over the course of a year and consequently their wage and salary income may not all relate to the current home address or postcode area (and therefore the SLA) as reported on the income tax return;
  
• generally, around 95.0% of individual income tax returns are processed within one year and around 99% within two years of the end of each particular income tax year. Consequently, a small proportion of returns may not have been processed at the time that these statistics were compiled and would not be included in the estimates presented. No attempt has been made to estimate or revise the data for any records submitted to the ATO after these statistics have been compiled. Note: Data for 2000-01 were compiled in August 2003, around twenty four months after the end of the 2001 income tax year.
  
• A number of SLAs with large decreases in the number of wage and salary earners between 1997-98 and 1998-99 in particular are areas with significant Indigenous populations. It is possible that these decreases are due to changes in the reporting of the income of Community Development Employment Project (CDEP) participants. CDEP is a program that enables Indigenous persons to exchange unemployment benefits for opportunities to undertake work and training in their communities. An instruction in the 1998-99 TaxPack (and in subsequent years) defines CDEP income as a 'Commonwealth of Australia Government Allowance or Payment'. Before 1998-99 such specific instructions on the treatment of CDEP payments were not included in TaxPacks. Although difficult to verify, it may be possible that, prior to 1998-99, CDEP participants reported income from this source as wage and salary income as the CDEP payment is shown as CDEP Salary or Wages on the group certificate or PAYG payment summary - individual non business. Consequently, wage and salary earner data prior to 1998-99 may have included CDEP participants while, for 1998-99 onwards, these persons have not been included. The general effect of this reporting anomaly is that for the three years 1995-96 to 1997-98, the estimates of the number of wage and salary earners may be higher and the average wage and salary incomes lower, than subsequent years.

• Legal Local Government Areas (LGAs): These areas are the spatial units which represent the geographical areas of incorporated local government councils and incorporated Community Government Councils (CGCs) where the CGC is of sufficient size and statistical significance. The various types of LGAs are cities (C), areas (A), boroughs (B), rural cities (RC), towns (T), shires (S), district councils (DC) and municipalities (M).
  
• Statistical Local Areas (SLAs): These geographical areas are in most cases identical with, or have been formed from a division of, whole LGAs. In other cases, they represent unincorporated areas. In aggregate, SLAs cover the whole of a state or territory without gaps or overlaps. In some cases legal LGAs overlap Statistical Subdivision boundaries and therefore comprise two or three SLAs (Part A, Part B and, if necessary, Part C).
  
• Statistical Subdivisions (SSDs): These are of intermediate size, between SLAs and SDs. In aggregate, they cover the whole of Australia without gaps or overlaps. They are defined as socially and economically homogeneous regions characterised by identifiable links between the inhabitants. In the non-urban areas an SSD is characterised by identifiable links between the economic units within the region, under the unifying influence of one or more major towns or cities.
  
• Statistical Divisions (SDs): These consist of one or more SSDs. The divisions are designed to be relatively homogeneous regions characterised by identifiable social and economic units within the region, under the unifying influence of one or more major towns or cities.