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Average Weekly Earnings Survey revisions

Estimates from the quarterly survey of Average Weekly Earnings were recently revised. These revisions relate to correcting for the misreporting of amounts salary sacrificed in the survey. Revised Average Weekly Earnings data series for August 1996 through to May 2008 were released on 13 November 2008, in Average Weekly Earnings (cat. no. 6302.0).

The definition of earnings used in the survey is, broadly, current and regular payments in cash. This means that the series have historically excluded amounts salary sacrificed, as these were considered to be payments in kind.

Under the revised conceptual framework for measures of employee remuneration, as presented in Information Paper: Changes to ABS Measures of Employee Remuneration (cat. no. 6313.0), amounts salary sacrificed are now considered to be payments in cash. However, as outlined in the information paper, the Average Weekly Earnings series is continuing on the existing basis (ie excluding amounts salary sacrificed), to maintain long-term comparability of the time series.

From August 2007, the Average Weekly Earnings survey was expanded to separately collect amounts salary sacrificed by employees, with the intention of releasing an additional series of earnings inclusive of salary sacrificed amounts.

Although the estimates of earnings from the Average Weekly Earnings survey should exclude amounts salary sacrificed, the survey expansion revealed evidence that earnings series from the Average Weekly Earnings survey have inadvertently included some amounts salary sacrificed.

Working closely with data providers, the ABS has been able to identify instances of misreporting (and amend reporting practices where necessary), quantify the extent of misreporting that has occurred in recent times, and estimate the impact of this misreporting on the historical series.

The overall impact of the revisions is relatively small at the Australia level. There are, however, more significant impacts on some lower level (sector, state and industry) data series. It should be noted that the magnitude of the revisions is generally less than the standard errors associated with the estimates, and that the impacts of the revisions on estimates of quarterly movements are generally minor.

A broad indication of the data impacts, including the key series affected by the revisions, is presented in Information Paper: Revisions to Average Weekly Earnings Series (cat. no. 6302.0.55.001).

For more information please contact us on (02) 6252 7206 or email labour.statistics@abs.gov.au