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SUMMARY OF FINDINGS


Overview

This publication contains statistics on the main costs incurred by employers as a consequence of employing labour in 2002-03. The statistics are based on the Major Labour Costs Survey (MLC) conducted in July 2003. The survey provides information on various components of labour costs, including: employee earnings; employer payments for superannuation; workers' compensation costs; payroll tax and fringe benefits tax.

More detailed data for 2002-03 and estimates for 1993-94 and 1996-97 based on the previous two MLC Surveys are presented in the Appendix.

Total costs

Total labour costs incurred by employers in Australia in 2002-03, as defined in the Major Labour Costs Survey, were $354,150 million. Employee earnings accounted for 86.6% of total labour costs. Superannuation was the next largest component at 7.6%. Payroll tax and Workers' compensation costs were 2.9% and 2.2% respectively, while Fringe benefits tax was the smallest component at 0.8% of total labour costs.

Large businesses (those with 100 or more employees) accounted for 57.0% of the total labour cost, while medium businesses (20 to 99 employees) accounted for 17.9% and small businesses (less than 20 employees) accounted for 24.4%.

Total labour costs for private sector employers were $270,330 million, representing 76.3% of the labour costs of all employers. Total labour costs for the public sector, which includes public trading and financial enterprises as well as commonwealth, state and local government departments and authorities, were $83,821 million (23.7% of the total).

Costs per employee

Total labour cost per employee in 2002-03 was $42,578. The private sector had lower total labour costs per employee ($40,117) than the public sector ($52,960). This difference is primarily a result of higher earnings and superannuation costs per employee in the public sector, and in particular in the Commonwealth public sector.

The Australian Capital Territory and New South Wales had the highest costs per employee ($46,276 and $46,078 respectively) while Tasmania had the lowest ($35,611). Across industries, labour costs per employee was highest in Mining ($96,399), and lowest in Accommodation, cafes and restaurants ($23,934) and Retail trade ($25,061).

LABOUR COSTS PER EMPLOYEE, State/Territory

Earnings per employee were higher for the public sector ($45,904) compared with the private sector ($34,710). Earnings per employee was highest in the Australian Capital Territory ($39,982) and New South Wales ($39,647) and lowest in Tasmania ($30,813).

Earnings per employee was highest in the Mining ($81,335) and Electricity, gas and water supply ($64,296) industries, and lowest in the Accommodation, cafes and restaurants ($20,844) and Retail trade ($21,958) industries.

EARNINGS PER EMPLOYEE, Industry

Superannuation cost per employee was $3,240. Superannuation cost per employee was significantly higher in the public sector ($4,325), than the private sector ($2,983). The Australian Capital Territory had the highest superannuation cost per employee with $4,426 while Tasmania had the lowest with $2,766 per employee.

The Mining and Electricity, gas and water supply industries had the highest superannuation cost per employee at $6,040 and $5,669 respectively. Industries with the lowest superannuation cost per employee were Communication services, Accommodation, cafes and restaurants, and Retail trade ($1,635, $1,712 and $1,801 respectively). It should be noted that during 2002-03 the superannuation costs of the Communication services industry was particularly affected by the use of surplus funds in some superannuation schemes to offset employer contributions (see paragraph 22 of Explanatory Notes).

SUPERANNUATION, Percentage of total labour costs

Payroll tax per employee was highest in New South Wales ($1,467) and the Northern Territory ($1,420), and lowest in the Australian Capital Territory ($693). A high proportion of organisations in the Australian Capital Territory have payroll tax exemptions as they are engaged in general government activities.

PAYROLL TAX PER EMPLOYEE, State/territory

Across industries, payroll tax as a proportion of total labour costs was highest in Electricity, gas and water supply (4.7%), followed by Communication services (4.6%), Mining (4.5%) and Finance and insurance (4.2%). The industry with the lowest proportion of payroll tax to total labour costs was Health and community services (0.6%). As a cost per employee, payroll tax was highest in Mining ($4,297) and Electricity, gas and water supply ($3,534), and lowest in Health and community services ($219).

For small businesses (less than 20 employees), payroll tax accounted for only 0.7% of total labour costs. For medium businesses (20 to 99 employees) and large businesses (100 employees or more), payroll tax accounted for 3.0% and 3.8% respectively.

Workers' compensation

Total workers' compensation costs in 2002-03 were $7,815 million, representing 2.2% of total labour costs. Workers' compensation cost per employee was slightly higher in the public sector ($972) than the private sector ($931). However, as a proportion of total labour costs, workers' compensation was higher in the private sector (2.3%) than the public sector (1.8%).

Workers' compensation as a cost per employee was highest in New South Wales ($1,161) and lowest in Queensland ($602). Workers' compensation costs as a proportion of total labour costs was highest in New South Wales and Tasmania (2.5% each) and lowest in Queensland (1.6%).

TABLES

1. MAJOR LABOUR COSTS, State/territory
		Other labour costs
	Earnings	Superannuation	Payroll tax	Workers' compensation	Fringe benefits tax	Total	Total labour costs
TOTAL LABOUR COSTS ($m)
New South Wales	109,807.1	9,474.9	4,055.7	3,212.1	1,045.4	17,788.1	127,595.2
Victoria	80,349.5	7,090.5	2,658.1	2,102.3	753.2	12,604.2	92,953.6
Queensland	50,651.3	4,476.7	1,388.2	907.3	314.2	7,086.3	57,737.6
South Australia	20,387.2	1,832.9	678.0	547.3	150.9	3,209.1	23,596.4
Western Australia	29,172.8	2,469.8	909.8	629.1	308.4	4,317.1	33,490.0
Tasmania	5,805.9	520.4	181.9	169.8	30.6	902.7	6,708.6
Northern Territory	3,045.2	247.4	121.1	73.5	28.5	470.5	3,515.7
Australian Capital Territory	7,390.3	817.5	127.9	173.6	43.9	1,162.9	8,553.2
Australia	306,609.3	26,930.1	10,120.7	7,814.9	2,675.2	47,540.9	354,150.3
COSTS PER EMPLOYEE ($)
New South Wales	39,647	3,425	1,467	1,161	378	6,431	46,078
Victoria	37,156	3,284	1,233	969	350	5,836	42,992
Queensland	33,621	2,975	931	602	211	4,718	38,339
South Australia	34,180	3,064	1,139	916	253	5,372	39,552
Western Australia	35,343	2,994	1,106	760	374	5,234	40,577
Tasmania	30,813	2,766	968	902	162	4,798	35,611
Northern Territory	35,364	2,870	1,420	845	335	5,470	40,834
Australian Capital Territory	39,982	4,426	693	937	238	6,293	46,276
Australia	36,855	3,240	1,221	939	323	5,722	42,578

2. MAJOR LABOUR COSTS, Sector
			Other labour costs
		Earnings	Superannuation	Payroll tax	Workers' compensation	Fringe benefits tax	Total	Total labour costs
TOTAL LABOUR COSTS ($m)
Private		233,955.8	20,086.4	7,708.3	6,276.3	2,302.7	36,373.7	270,329.6
Public
	Commonwealth	13,450.3	1,163.3	294.4	176.4	118.9	1,753.0	15,203.3
	State	53,323.4	5,203.9	2,090.6	1,155.4	214.6	8,664.4	61,987.8
	Local	5,879.8	476.6	27.5	206.8	39.0	749.9	6,629.6
	Total	72,653.5	6,843.7	2,412.4	1,538.6	372.5	11,167.2	83,820.7
All sectors		306,609.3	26,930.1	10,120.7	7,814.9	2,675.2	47,540.9	354,150.3
COSTS PER EMPLOYEE ($)
Private		34,710	2,983	1,149	931	343	5,406	40,117
Public
	Commonwealth	53,888	4,660	1,180	707	477	7,023	60,911
	State	45,609	4,452	1,788	988	184	7,411	53,021
	Local	35,828	2,906	168	1,259	237	4,569	40,397
	Total	45,904	4,325	1,525	972	235	7,056	52,960
All sectors		36,855	3,240	1,221	939	323	5,722	42,578

3. MAJOR LABOUR COSTS, Employer size
		Other labour costs
	Earnings	Superannuation	Payroll tax	Workers' compensation	Fringe benefits tax	Total	Total labour costs
TOTAL LABOUR COSTS ($m)
0-19 employees	78,353.4	7,598.6	628.3	1,992.8	391.3	10,611.1	88,964.5
20-99 employees	54,680.2	4,628.1	1,901.9	1,549.5	556.6	8,636.1	63,316.3
100 or more employees	173,575.7	14,703.4	7,590.5	4,272.5	1,727.3	28,293.7	201,869.5
Total	306,609.3	26,930.1	10,120.7	7,814.9	2,675.2	47,540.9	354,150.3
COSTS PER EMPLOYEE ($)
0-19 employees	29,794	2,905	231	756	149	4,041	33,835
20-99 employees	32,965	2,791	1,147	934	336	5,208	38,173
100 or more employees	42,914	3,636	1,877	1,056	427	6,996	49,910
Total	36,855	3,240	1,221	939	323	5,722	42,578

4. MAJOR LABOUR COSTS, Industry
		Other labour costs
	Earnings	Superannuation	Payroll tax	Workers' compensation	Fringe benefits tax	Total	Total labour costs
TOTAL COSTS ($m)
Mining	6,181.4	459.0	326.6	230.6	129.2	1,145.4	7,326.8
Manufacturing	44,201.0	3,679.4	2,007.2	1,679.3	532.3	7,898.1	52,099.2
Electricity, gas and water supply	3,672.0	323.7	201.8	65.5	40.9	631.8	4,303.9
Construction	17,113.2	1,478.7	374.4	855.8	86.9	2,795.8	19,909.0
Wholesale trade	18,510.5	1,669.0	666.0	392.1	394.4	3,121.5	21,632.0
Retail trade	26,725.2	2,188.8	798.7	641.7	137.8	3,767.1	30,492.3
Accommodation, cafes and restaurants	10,021.2	822.2	266.6	353.2	38.7	1,480.7	11,501.9
Transport and storage	13,787.0	1,174.5	611.6	513.9	87.3	2,387.3	16,174.2
Communication services	6,702.6	193.9	337.8	103.0	82.6	717.2	7,419.8
Finance and insurance	19,177.3	1,326.7	922.2	136.6	340.0	2,725.6	21,902.8
Property and business services	45,544.2	4,305.1	1,345.0	725.9	382.0	6,757.9	52,302.1
Government administration and defence	18,222.1	1,963.3	340.0	360.1	120.2	2,783.6	21,005.7
Education	27,235.0	2,841.5	1,132.6	415.2	101.7	4,491.0	31,726.0
Health and community services	32,498.1	2,942.4	204.0	858.1	76.9	4,081.4	36,579.5
Cultural and recreational services	6,214.1	521.4	217.1	110.5	54.0	903.0	7,117.1
Personal and other services	10,804.4	1,040.6	369.2	373.3	70.4	1,853.6	12,658.0
All industries	306,609.3	26,930.1	10,120.7	7,814.9	2,675.2	47,540.9	354,150.3
COSTS PER EMPLOYEE ($)
Mining	81,335	6,040	4,297	3,026	1,701	15,064	96,399
Manufacturing	43,510	3,624	1,985	1,652	526	7,787	51,297
Electricity, gas and water supply	64,296	5,669	3,534	1,147	715	11,065	75,361
Construction	37,397	3,237	821	1,871	*191	6,120	43,517
Wholesale trade	41,723	3,774	1,501	881	891	7,047	48,770
Retail trade	21,958	1,801	662	527	113	3,103	25,061
Accommodation, cafes and restaurants	20,844	1,712	561	737	81	3,090	23,934
Transport and storage	43,871	3,740	1,951	1,631	278	7,600	51,471
Communication services	56,611	1,635	2,854	869	698	6,057	62,667
Finance and insurance	52,395	3,626	2,521	373	930	7,451	59,846
Property and business services	37,435	3,545	1,108	594	314	5,561	42,996
Government administration and defence	45,056	4,856	842	889	297	6,884	51,940
Education	38,598	4,028	1,605	589	144	6,365	44,963
Health and community services	35,443	3,210	219	939	85	4,454	39,897
Cultural and recreational services	28,404	2,384	994	505	247	4,131	32,535
Personal and other services	34,154	3,295	1,173	1,182	224	5,873	40,027
All industries	36,855	3,240	1,221	939	323	5,722	42,578
* estimate has a relative standard error of 25% to 50% and should be used with caution

NOTES ON ESTIMATES

Care should be taken when comparing estimates of major labour costs contained in this publication with those from the most recent survey published in Labour Costs, Australia 1996-97 (cat. no. 6348.0) as there are differences in methodology between the two surveys. See paragraph 30 in the Explanatory Notes for more details.

ABS DATA AVAILABLE ON REQUEST

In addition to the information contained in this publication, a range of unpublished data is available on request. For more information refer to the Appendix.

SAMPLING ERROR

For information on sampling error refer to the Technical Note.

INQUIRIES

For further information about these and related statistics, contact the National Information and Referral Service on 1300 135 070 or Kerry Foley on Perth (08) 9360 5373.