Labour Account Australia methodology

The Australian Labour Account provides a set of core macro-economic labour market variables derived through data integration, with both an industry focus and time series dimension.  

It builds on the International Labour Organisation (ILO) fundamentals and expands them to ensure consistency with the System of National Accounts (2008 SNA). The Labour Account also extends the analytical utility of National Accounts data, through providing a labour market-specific perspective. 

The experimental Australian Labour Account has been developed to provide a framework for integrating data from a number of sources including household survey, business survey and administrative data. The result is internally consistent estimates of key labour market variables, which more effectively enable the description and analysis of the state and dynamics of the Australian labour market. These core variables can help users make sense of seemingly inconsistent labour related data, which are often based on different reference periods, populations, concepts, definitions and methodologies.

These inconsistencies are magnified when data are disaggregated by industry or sector, or in analysis requiring the combination of data from both business and household sources, for example combining output and hours worked by industry to derive industry productivity growth rates. There is a risk that users may draw inappropriate conclusions from the use of different labour statistics without an informed understanding of which data to use in which circumstances.

The Labour Account provides a time series of estimates of the number of employed persons, the number of jobs, hours worked and the income earned for each industry in one coherent framework. Historically, published estimates of employed persons in each industry have only been available for industry of main job. The expanded scope and additional data sources used in the Labour Account include data for multiple job holders by their industry of second, third and fourth job. 

For the first time, this enables an industry perspective of the total number of people employed in each industry in a time series. This could be used to better assess policy changes targeting a particular industry, providing a more complete picture of the number of people impacted by the change (see Figure 1).
 

The Labour Account provides a conceptual framework through which existing labour market data from diverse sources can be confronted and integrated, with the aim of producing a coherent and consistent set of aggregate labour market statistics. 

The Labour Account helps address data coherence by:

• bringing together related labour statistics from multiple sources in a single set of tables;
• applying a consistent set of concepts across the data to explore statistical anomalies;
• making transparent adjustments to data to offset conceptual and scope differences; and
• making further informed and documented data adjustments to provide a balanced set of labour statistics.

The Labour Account consists of four quadrant tables: Jobs, Persons, Volume and Payments (see figure 2). For the Labour Account, data in each table are available annually for 86 industry subdivisions, and quarterly for 19 high level industry divisions.

The Jobs quadrant provides statistics on numbers of filled jobs derived separately from business and household sources, plus data on vacant jobs to provide a total number of jobs in the economy.

The Persons quadrant includes statistics on numbers of employed persons, together with data on numbers of unemployed and underemployed persons (derived from household sources). 

The Labour Volume quadrant provides statistics on hours paid for (derived from business sources) and hours worked (from household sources), plus data on additional hours of work sought by unemployed and underemployed persons (from household sources). 

The Labour Payments quadrant provides statistics on labour income and employment costs (from business sources). 

The Labour Account is able to combine data from the jobs, persons, volume and payments tables to calculate average hours worked, average remuneration (per person and per job), and average labour costs per job. 

The scope of the Australian Labour Account is consistent with that of the national economy, as defined in the Australian System of National Accounts (ASNA), which follows the international standards set out in the United Nations System of National Accounts. The Labour Account includes all jobs created by enterprises engaged in the production of goods and services that fall within the scope of the National Accounts "production" boundary, operating within Australia's economic territory. 

Labour Account employed persons are defined as all people who hold one or more of those jobs. Hours worked and paid for relate to productive activity in those jobs. Labour income relates to earnings derived from employment in those jobs and includes both Compensation of Employees, as defined in the ASNA, and an estimate of the labour related component of Gross Mixed Income. Labour costs relate to net employment related expenditure by businesses incorporating both labour remuneration, employment related intermediate consumption, and employment related net taxes.

The data sources used to compile Labour Account statistics do not always align completely with the ASNA. The household Labour Force Survey, for example, excludes permanent defence force personnel, short-term working visa holders and children under 15 from its count of employed persons, all of whom fall within the scope of the Labour Account and ASNA concept of employed persons. The Labour Account tables include "adjustments" to bridge the conceptual and scope gaps between the ASNA standard and the principal data sources. For example data obtained from the Commonwealth Government are used to "add in" defence force personnel. Commonwealth data on short term visa arrivals and departures are used to estimate the stock of potential employed persons in this category. Labour force participation and employment rates for resident cohorts with similar characteristics are used to estimate numbers of working short-term visitors. These adjustment methodologies are fully documented in the Australian Labour Account: Concepts, Sources and Methods (cat. no. 6150.0).

Finally, the Labour Account includes balanced estimates of filled jobs, employed persons, hours worked and hours paid for that adjust for the remaining sampling and non-sampling error. These adjustments are based on analysis of data for each industry, making use of employment related statistics on production, taxes, wages and salaries to assess the relative plausibility of various estimates. 

It depends on when you ask this, who you ask, and how you ask the question.

Based on the answers provided by "responsible adults" from the households where workers live, the basic approach used in the Labour Force Survey, there were 12.8 million people employed in Australia in 2019 -2020.

Based on the answers provided by "responsible representatives" of businesses and other enterprises where they work, the approach adopted in business surveys, there were 13.8 million filled jobs in Australia in 2019-2020.

First, they are counting different things - for example, the Labour Force Survey asks about a person’s main job to identify employed and unemployed people, and people not in the labour force. However, a person holding two jobs will be counted twice in a business survey, once by each employer. Business surveys measure the number of "filled jobs", not the number of employed people. 

When people in households were asked how many jobs they have, they told the ABS in 2019-2020 they had 13.7 million. Businesses reported they had 13.8 million filled jobs, which was 0.1 million (or 0.7%) more than reported by households in the monthly Labour Force Survey.

The second reason for the difference is that, in line with international standards, not everyone who has a job is in the scope of the Labour Force Survey. Similarly, some forms of work are not captured by reporting businesses.

People whose main job is in the permanent military forces are not reported by either businesses or households, and household representatives are not asked to report on jobs held by people intending to stay in Australia for less than 12 months. No employment by children under 15 years, either paid or unpaid, is reported by households. In addition, unpaid contributions of work to a family business or farm by family members of any age are not reported by businesses. If the ABS adjusts for these known differences, then the number of filled jobs reported by businesses would be raised to 14.0 million, and the number of filled jobs reported by households would increase to 14.2 million.

The remaining difference of 255,700 jobs, or 1.8% of the household based estimate, reflects the unavoidable measurement limitations related to measuring filled jobs and employment.

• Likely sources of measurement error in household based data include lack of knowledge about the jobs held by household members on the part of the person responding to the Labour Force Survey.
• On the business survey side, there is no single ABS business survey that collects employment data from businesses across the whole economy, and business based estimates of filled jobs are compiled from multiple sources, potentially resulting in a larger overall total measurement error than in any of the individual sources. 
• Both business and household surveys are also subject to sampling variability. Divergences can further arise when estimating missing data, or modelling is required to offset data gaps and lags in the supply of information. 

Based on hours worked reported by households, and after adjusting for defence force personnel, short-term visitors and children: 21,236 million hours were worked in 2019-2020. Businesses reported the number of "hours paid for" at 23,063 million hours. These numbers imply that hours paid for but not worked, mainly various forms of paid leave, exceeded hours of unpaid overtime (hours worked but not paid for). This pattern was consistent over time at a whole of economy scale.

The Labour Account provides a time series of estimates of the number of employed persons, the number of jobs, hours worked and the income earned for each industry in one coherent framework. Historically, published statistics on employed persons in each industry have only been available for industry of main job. The expanded scope and additional data sources used in the Labour Account includes data for multiple job holders by industry of second, third and fourth job. For the first time, this enables an industry perspective of the total number of people employed in each industry in a time series. This could be used to better assess policy changes targeting a particular industry, providing a more realistic picture of the number of people impacted by the change.

The provision of time-series data on employment, hours and earnings, that are conceptually aligned with the Australian System of National Accounts data, will help improve macro-economic analysis and forecasting. 

Consistent data on employment, hours and incomes will assist in assuring the quality of national accounts production and income data. A better alignment of hours worked with production (gross output and gross value added) at an industry level will improve the reliability of both labour and multi-factor productivity statistics.

The Labour Account is a complement to the existing suite of labour statistics. Users should continue to use the Labour Force Australia (cat. no. 6202.0) for headline employment, unemployment and persons not in the labour force as this is the data suite that is internationally comparable and aligned with International Labour Organisation conventions. If users require detailed dynamics essential for analysis of individual or household characteristics, such as household type, age, sex, income, occupation and educational qualifications, they should use the source data.

The Labour Account should be used for industry analysis of labour growth and performance in terms of people, jobs, hours and income.

Labour Account tables are likely to be of most value to people engaged in the use of labour statistics in macro-economic analysis, forecasting and in policy related research. 

The Labour Account is designed to complement the existing suite of labour statistics. Australia’s official labour force data are derived from the household Labour Force Survey and published in Labour Force, Australia (ABS cat. no. 6202.0), which remains the source of internationally comparable statistics on the labour force, employment and unemployment.

If you require detailed information essential for analysis of individual or household characteristics, such as household type, age, sex, income, occupation and educational qualifications, they should also use Labour Force Survey data.

The ABS has released four publications regarding the Labour Accounts:

• Australian Labour Account: Concepts, Sources and Methods (cat. no. 6150.0)
• Labour Account Australia, Experimental Estimates (cat. no. 6150.0.55.001)
• Information Paper: Australian Labour Account (cat. no. 6150.0.55.002)
• Labour Account Australia (cat. no. 6150.0.55.003)

Labour statistics are some of Australia’s most important economic and social statistics. Put simply, they provide information about people and their participation in the labour market, their success in finding employment, their earnings and other benefits, their type of work, their working hours and conditions.

Given the importance of high quality information on the Australian labour market, the ABS produces a broad range of labour statistics, drawn from a wide range of different sources. Some of these sources are very well known, such as the monthly Labour Force Survey, but others are less well known – particularly new collections like the fortnightly release of Weekly Payroll Jobs and Wages in Australia, the annual Jobs in Australia and the quarterly Labour Account.

A simple way of visualising this is to consider that ABS labour statistics are drawn from four key “pillars” of data, each of which is a bit different, but which provide complementary insights into the labour market.

Each of these pillars – the two traditional sources of household and business surveys, and the two more recent pillars of administrative data based statistics and Labour Account - provides important and unique insights to enable Australians to better understand their labour market.

A household survey approaches individual households to complete questions about their individual, family or household circumstances.

The key household survey that provides vital information about Australia’s labour market is the Labour Force Survey, and its related supplementary surveys.

Business surveys collect a broad range of information from businesses, including their performance, financial position or about jobs and employees.

Key business surveys with a labour market focus include Job Vacancies, Employee Earnings and Hours Average Weekly Earnings and the Wage Price Index.

Administrative data refers to information maintained by governments and other entities that is made available to the ABS for statistical purposes. It includes data used for registrations, transactions and record keeping, usually during the delivery of a service.

The ABS publishes employment information from the Linked Employer Employee Dataset (LEED), using Australian Tax Office information and ABS data. As a result, the LEED includes more than 100 million tax records over six consecutive years between 2011-12 and 2016-17, and provides information for over 2,200 different regions based on a person’s usual residence.

The ABS has also recently begun publishing weekly index measures of payroll jobs and wages, based on Single Touch Payroll data, from January 2020 onwards.

The Labour Account brings together data from separate administrative, business, and household sources, adjusting and confronting the various sources until a coherent picture of the labour market is established. It provides data on the number of employed persons, the number of jobs, hours worked and income earned for each industry. It provides the best labour market estimates for the 19 industry divisions each quarter and 86 industries annually.

Often there is only a single statistical data source on the ABS website that will include the information that you are after. However, for many labour market topics it is often the case that the ABS produces multiple statistics, each drawn from a different data source to enable different types of analysis. They provide important, complementary economic and social insights into the labour market, which is large, complex and dynamic.

It is therefore important to be guided by what you are looking to understand about the labour market. Is it to understand a topic where:

• demographic characteristics are important or it may be related to an activity outside of employment? Household surveys are often useful for this.
• specific employer or payroll information is important? Business surveys are often useful for this.
• detailed sub-population or geographic information is important? This is usually best sourced from administrative data, or the five-yearly Census.
• a comprehensive ‘best estimate’ of key labour market indicators (based on reconciled information from all of the available data sources) is important? The Labour Account is designed to provide this.
   

For example, in seeking to understand how many people are employed in jobs in Australia, you could use statistics from:

• Monthly Labour Force – which provides a timely indicator on changes in employment, unemployment and underemployment, including analysis by personal characteristics such as sex, age, occupation and employment status.
• The quarterly Labour Account – which is the best source of headline information on employment by industry. It provides an estimate of the number of jobs, hours worked, and associated labour income.
• The annual Jobs in Australia – which provides granular information on all the job relationship for more than 2,200 different regions across Australia. This rich dataset is based on more than 100 million individual records which allow for micro-data analysis of the Australian labour market.
   

Another common example is seeking to understand changes in wages over time, where you could use statistics from:

• Quarterly Wage Price Index - which measures changes in the price of labour in the Australian labour market. In a similar manner to the CPI, the WPI follows price changes in a fixed "basket" of jobs and is therefore not affected by changes in quality and quantity of work.
• The twice yearly Average Weekly Earnings - which provides data on average wages by industry, which provides insights into compositional changes in earnings over time.
• The two yearly Employee Earnings and Hours - which provides detailed data on methods of setting pay, hours paid for and detailed distributional earnings information.
• The annual Characteristics of Employment – which provides earnings by detailed socio-demographic and other characteristics.
• The quarterly Compensation of Employees measure in the National Accounts and quarterly measure of labour income in the Labour Account – which provide aggregate earnings measures,
   

Below is a list of some of the key labour statistics collections, organised into the pillars. In addition to improving the visibility of all of the available labour statistics, the ABS is also exploring how to better organise labour market information around themes and topics. This is being actively explored as part of the design of its new website, which will be launched later in 2020.

Labour Force, Australia (cat. no. 6202.0) - Monthly
Labour Force, Australia, Detailed - Electronic Delivery (cat. no. 6291.0.55.001) – Monthly
Labour Force, Australia, Detailed, Quarterly (cat. no. 6291.0.55.003)
Characteristics of Employment, Australia (cat. no. 6333.0) - Annually
Participation, Job Search and Mobility, Australia (cat. no. 6226.0) – Annually
Education and Work, Australia (cat. no. 6227.0) - Annually
Characteristics of Recent Migrants, Australia (cat. no. 6250.0) – 4 yearly
Barriers and Incentives to Labour Force Participation, Australia (cat. no. 6239.0) – 2 yearly
Retirement and Retirement Intentions, Australia (cat. no. 6238.0) – 2 yearly

Job Vacancies, Australia (cat. no. 6354.0) - Quarterly
Industrial Disputes, Australia (cat. no. 6321.0.55.001) - Quarterly
Average Weekly Earnings (cat. no. 6302.0) – 6 monthly
Employee Earnings and Hours, Australia (cat. no. 6306.0) – 2 yearly
Wage Price Index, Australia (cat. no. 6345.0) - Quarterly
Employment and Earnings, Public Sector, Australia (cat. no. 6248.0.55.002) - Annually
Australian Industry (cat. no. 8155.0) - Annually
Labour Costs, Australia (cat. no. 6348.0) – 5 yearly

Weekly Payroll Jobs and Wages in Australia (6160.0.55.001) - Fortnightly
Jobs in Australia (cat. no. 6160.0) - Annually
Personal Income in Australia (cat. no. 6524.0.55.002) - Annually

Labour Account Australia (cat. no. 6150.0.55.003) - Quarterly

The ABS continues to strengthen the suite of labour market statistics, to ensure that Australia can effectively understand how its labour market, economy and society are changing over time and make informed decisions.

Traditionally, the Labour Force Survey (LFS) has been the primary source of information on employment by industry over time. However, industry information is not what the Labour Force Survey is primarily designed to measure, which is the labour force status of the population (that is, whether people are employed, unemployed or not in labour force) and their key demographics.

In July 2017, the ABS released a new labour statistics product, the Labour Account, which brings together a broad range of labour market statistics into one framework to be compared and confronted to produce a coherent picture of the Australia labour market, and its industries.

The ABS considers the Labour Account to be the best source of headline information on employment by industry. It has been specifically designed to produce the most comprehensive estimates for industries in Australia, drawing upon a broad range of data sources. It provides an estimate of the number of jobs, hours worked, and associated labour income that align very well with industry measures of output in the economy. In the future, it is expected to lead to improvements in the measurement of productivity.

The Labour Account is also the best source of quarterly private and public sector jobs information. While the annual public sector Survey of Employment and Earnings provides a robust level estimate of public sector employment, the additional scope and confrontation processes of the Labour Account provide the best indicator of the relative proportions and changes over time across both private and public sectors.

The comparative strength of the industry information in the Labour Account is that it is generally drawn from how businesses have been officially categorised, rather than how employed people (most of whom are employees) describe the business they work in. The Labour Account shows that there are a number of people in the labour market who, when responding to the Labour Force Survey, will describe the business activities that are most relevant to their job, rather than the actual industry of the business that pays their wages or salary. For example, an employee of a business engaged in engineering construction who works on a coal mine site may incorrectly describe their industry of employment as coal mining and not construction.

However, the Labour Account cannot provide all of the information that survey data can, and there is still an important role for other detailed information, including Labour Force Survey statistics (cat. no. 6291.0.55.003) and also the relatively new Jobs in Australia (cat. no. 6160.0), which provide insights into the characteristics and distribution of people and their jobs in the labour market.

For more information on the various sources of labour statistics refer to the Navigating ABS Labour Statistics spotlight.

Additional hours sought by underemployed refers to the number of additional hours part-time employed persons would prefer to work and are available for, and the number of hours not worked by full-time employed persons for economic reasons.

Adjustments to employed persons are the additions and deductions made to align the scope of the Labour Force Survey with Australian System of National Accounts concepts of production and residency.

Additions are made for:

• persons working in the permanent defence forces;
• non-residents (short term visitors) living in Australia and employed by Australian resident enterprises; and
• child workers.
   

Deductions are made for:

• Australian residents living in Australia employed by non-resident enterprises.
   

Adjustments to hours actually worked in all jobs are the additions and deductions made to hours worked to align the scope of the Labour Force Survey with Australian System of National Accounts concepts of production and residency.

Additions are made for hours worked by:

• non-residents (short term visitors) living in Australia and employed by Australian resident enterprises;
• child workers; and
• persons working in the permanent defence forces.
   

Deductions are made for hours worked by:

• Australian residents living in Australia employed by non-resident enterprises.
   

Available hours of labour supply refers to the total number of hours spent directly on and available to be spent on, and in relation to, productive activities. It is the aggregate of hours actually worked and hours preferred but not worked.

Average hours actually worked per job is the hours actually worked divided by the number of filled jobs.

Average labour cost per hour paid is the total labour cost divided by hours paid for.

Average labour cost per hour worked is the total labour cost divided by hours actually worked in all jobs.

Average labour income per employed person is the total labour income divided by the number of employed persons.

Compensation of employees is defined as the total remuneration, in cash or in kind, payable by an enterprise to an employee in return for work done by the employee (SNA 2008, para 7.5, ASNA 11.6). It is the value of entitlements received by employees from employers for services rendered. It is further classified into two sub components: Wages and salaries and Employers’ social contributions.

Contributing family workers are persons who work without pay in an enterprise operated by a relative.

Employees are persons who work for a public or private employer and receive remuneration in wages, salary, a retainer fee from their employer while working on a commission basis, tips, piece rates, or payment in kind. Employees are engaged under a contract of service (an employment contract) and take directions from their employer/supervisor/manager/foreman on how work is performed.

Employers’ social contributions are payments by employers which are intended to secure for their employees the entitlement to social benefits should certain events occur, or certain circumstances exist, that may adversely affect their employees’ income or welfare - namely work related accidents and retirement.

Employment related costs to employers relates to other costs attributed to employees, such as training costs and recruitment costs.

Employment subsidies are payments made by government, typically to employers. They may be based on the size of the total workforce, the employment of particular types of persons such as physically handicapped persons or persons who have been unemployed for long periods. These subsidies may also be intended to cover some or all of the costs of training schemes organised or financed by employers.

Filled jobs refer to all positions of employment that are currently filled (including self-employment). Filled jobs can be measured from either household sources (such as the Labour Force Survey), or business sources (such as the Economic Activity Survey).

Hours actually worked in all jobs includes:

• all time spent directly on, and in relation to, productive activities;
• down time;
• time spent in addition to hours worked during normal periods of work (including overtime);
• time spent at the place of work on activities such as the preparation of the workplace, repairs and maintenance, preparation and cleaning of tools, and the preparation of receipts, time sheets and reports;
• time spent at the place of work waiting or standing by due to machinery or process breakdown, accident, lack of supplies or power or internet access, etc.; and
• time corresponding to short rest periods (resting time) including tea and coffee breaks or prayer breaks.
   

Hours actually worked in all jobs excludes:

• hours paid for but not worked such as paid annual leave, public holidays or paid sick leave;
• meal breaks; and
• time spent on travel to and from work when no productive activity for the job is performed (even when paid by the employer).
   

For multiple job holders, actual hours worked includes the hours worked in all jobs.

Hours paid but not worked refers to hours associated with paid leave, such as annual leave, paid public holidays, paid sick leave and other paid leave.

Hours paid for is the time for which payment has been received for award, standard or agreed hours of work (paid at normal or premium rates, in cash or in kind), regardless of whether the hours were actually worked or not.

Hours paid for:

• includes time paid but not worked such as paid annual leave, paid public holidays and certain absences such as paid sick leave; and
• excludes time worked but not paid by the employer, such as unpaid overtime, and absences that are not paid by the employer, such as unpaid educational leave or maternity leave that is paid through transfers by government from social security systems.
   

As such, hours paid for will differ from the number of hours actually worked if an employee works more or less hours than their paid hours. Hours paid for will also differ from usual hours in some cases, for example if an employee performs long hours in some weeks to have rostered days or weeks off. Hours paid for is the aggregate of ordinary time hours paid for and overtime hours paid for.

Hours sought but not worked refers to the number of hours a person would prefer to work and is available to work beyond the usual hours they do work. It is the sum of hours sought (i.e. hours preferred) by unemployed persons, and additional hours sought (i.e. additional hours preferred) by underemployed persons.

Hours sought by unemployed refers to the number of hours an unemployed person would prefer to work and is available for.

Hours worked but not paid refers to unpaid hours worked. It is the time (hours) worked but not paid for by the employer, such as unpaid overtime, and absences that are not paid by the employer, such as unpaid educational leave or maternity leave that may be paid through transfers by government from social security systems.

This is the industry of the last job held for unemployed persons aged 15 years and over who worked more than two years ago.

A job with job sharing arrangements is a full-time job that is filled by employing two or more people working part-time to share the responsibility and duties of the one position.

A job vacancy is an unfilled job that an employer intends to fill either immediately or in the near future. A job vacancy is considered to exist if an employer has taken concrete steps to find a suitable person to carry out a specific set of tasks and would have recruited (entered into a job contract with) such a person if she/he had been available.

Measures of job vacancies exclude:

• jobs not available for immediate filling;
• jobs for which no recruitment action has been taken;
• jobs of less than one day's duration;
• jobs only available to be filled by internal applicants within an organisation;
• jobs to be filled by employees returning from paid or unpaid leave, or after industrial disputes;
• vacancies for work to be carried out by contractors; and
• jobs for which a person has been appointed but has not yet commenced duty.
   

Labour Account added as a prefix to a data item (e.g. Labour Account main job and Labour Account secondary job) are indicative of statistical estimates made to address scope discrepancies between the principal data sources (such as the household Labour Force Survey) and the conceptual scope of the Australian Labour Account (the SNA 2008 production and residence boundaries). For example, the number of filled jobs reported in the Labour Force Survey is adjusted by adding estimates of jobs held by members of the permanent defence forces, child workers and short-term visa holders, and deducting an estimate of Australian residents employed by non-resident enterprises.

Labour Account employed persons is the sum of all persons engaged by Australian resident enterprises in economic activity within the System of National Accounts (SNA) production boundary.

The Labour Force, also referred to as the currently economically active population, is the aggregate of employed and unemployed persons which gives a measure of the number of people contributing to, or actively looking and immediately available for, the supply of labour at a point in time. Labour Account labour force is the sum of Labour Account employed persons and Labour Force Survey unemployed persons.

Labour Account main job is the main activity carried out by an employed person. In the Australian context, this is the job in which most hours are usually worked. An employed person can only have one main job.

Labour Account secondary job is any job held by an employed person, other than their main job. A person can have multiple secondary jobs.

Labour Force Survey employed persons is the sum of all persons, defined as employed in line with ILO guidelines and in ABS official employment statistics (Labour Statistics: Concepts, Sources and Methods, cat. no. 6102.0.55.001).

An employed person must meet the following criteria:

• be aged 15 years and over; and

• be usually resident in Australia (i.e. not a short term visitor intending to stay in Australia for less than 12 months in a 16 month period); and

• not be a member of the permanent defence forces of Australia, a foreign diplomat (or a dependant of a foreign diplomat ) or a member of a foreign military force stationed in Australia (or their dependant); and

• meet at least one of the following criteria during the Labour Force Survey reference week:
  1. worked for one hour or more without pay in a family business or on a farm (contributing family workers); or
  2. worked for one hour or more for pay, profit, commission or payment in kind, in a job or business or on a farm (Employees, Owner-Managers of Incorporated Enterprises (OMIEs), Self-employed persons (Owner-Managers of Unincorporated Enterprises (OMUEs)) and contributing family workers); or
  3. were owner managers who had a job, business or farm, but were not at work; or
  4. had a job but were not at work and were:
     • away from work for less than four weeks up to the end of the reference week; or
     • away from work for more than four weeks up to the end of the reference week and received pay for some or all of the four week period to the end of the reference week; or
     • away from work as a standard work or shift arrangement; or
     • on strike or locked out; or
     • on workers' compensation and expected to return to their job.
        

Members of the permanent defence forces, certain diplomatic personnel of overseas governments customarily excluded from census and estimated population counts, overseas residents in Australia, and members of non-Australian defence forces (and their dependents) stationed in Australia are excluded from the Labour Force Survey.

Labour Force Survey main job is the number of main jobs held by members of the usually resident civilian population aged 15 years and over. This is the official estimate of the number of main jobs derived from data collected in the household Labour Force Survey and published in Labour Force, Australia (cat. no. 6202.0).

Labour Force Survey not in the labour force comprises all persons aged 15 years and over who are neither employed nor unemployed. They include people who perform home duties or care for children, are retired, voluntarily inactive and those permanently unable to work. Not all people who are classified as not in the labour force are voluntarily economically inactive; some want to work but are classified as not in the labour force because they do not satisfy the criteria for unemployment (active job search and availability to start work).

Labour Force Survey secondary job is the number of secondary jobs held by members of the usually resident civilian population aged 15 years and over. This is the official estimate of the number of secondary jobs derived from data collected in the household Labour Force Survey.

Labour Force Survey underemployed persons reflects insufficient hours of work and where a person is willing and available to engage in additional hours of employment. International guidelines recognise underemployment in two forms: time related underemployment (persons who would prefer more hours) and inadequate employment situations, which represents insufficient use of skills and experience; inadequate income; and excessive hours.

Time related underemployed persons refer to part-time employed persons who wanted to work more hours and were available to start work with more hours, either in the reference week or in the four weeks subsequent to the survey; or persons employed full-time who worked part-time hours in the reference week for economic reasons. It is assumed that these people wanted to work full-time in the reference week and would have been available to do so.

Consistent with the Labour Force Survey, the Australian Labour Account only includes measures of time related underemployment.

Labour Force Survey underutilised persons encapsulates both unemployment and underemployment, and provides more comprehensive information on the state of labour market and measures the extent to which all available labour force resources are not being fully used in the economy.

Labour Force unemployed persons refers to people in the civilian usually resident population aged 15 years and over who are without work, actively seeking work and currently available for work. All three conditions must be satisfied for a person to be considered unemployed. For people waiting to start a new job they have already obtained, the active job search criterion is waived.

Labour income from self-employment refers to the employment related income received by household members from self-employment. It consists of all payments and benefits in cash, kind or services, which are received, over a given reference period, by individuals for themselves or in respect of their family members, by virtue of their involvement in current or former self-employment jobs.

Ordinary time hours paid for includes stand-by or reporting time hours which are part of standard hours of work, and hours of paid annual leave, paid sick leave and long service leave taken during the reference period. Ordinary time hours paid for at penalty rates (e.g. for shift work) are not converted to their ordinary time equivalent. This definition excludes any hours unpaid and overtime hours.

Owner-Managers of Incorporated Enterprises (OMIEs) are persons who operate their own incorporated enterprise with or without hiring employees.

Self-employed (Owner-Managers of Unincorporated Enterprises (OMUEs)) are persons who operate their own unincorporated enterprise with or without hiring employees.

Paid overtime, otherwise known as overtime hours paid for, represents hours paid for in excess of award, standard or agreed hours of work, at both standard and penalty rates.

Payroll tax includes taxes payable by the employer on the wage and salary bill.

The proportion of secondary jobs is calculated as total secondary jobs divided by total filled jobs.

The proportion of vacant jobs is calculated as the number of job vacancies divided by the number of total jobs.

The rate of multiple job holding is calculated as the number of multiple job holders divided by the number of employed persons. Since employed persons in the Labour Account includes all persons employed in a particular industry (i.e. in their main job, in a secondary job, or in a combination of jobs), this rate provides a broader denominator for analysis of multiple job holding than the 'Ratio of multiple job holders'.

The ratio of multiple job holders is calculated as the number of multiple job holders divided by the number of main job holders. This measure provides a narrower denominator for analysis of multiple job holding than the 'Rate of multiple job holding', and focuses on how many people in the industry of their main job also have a secondary job (which may or may not be in the same industry).

Residual in the Labour Payments quadrant refers to the difference between ‘total labour income’ and ‘total labour costs’. This is not a statistical discrepancy, and the two measures are similar but not conceptually identical.

Residual in the Labour Volume quadrant refers to the difference between ‘hours paid for’ and ‘hours worked’. This is not defined as a statistical discrepancy as there remains a data gap in terms of unpaid hours worked, and the two measures are similar but not conceptually identical.

This residual can provide an insight into labour market conditions. An industry in which the gap between hours paid for and hours worked is below the average for the economy as a whole is likely to be indicative of more casual employment arrangements, in which employees have less access to benefits such as paid recreation and sick leave. A reduction over time in the gap between hours paid for and hours worked could signal a tightening of labour market conditions or an increase in casualisation.

The secondary employment adjustment calculates the number of employed people who hold secondary jobs in each industry. It is calculated by excluding multiple job holding within the same industry, from the total number of filled jobs.

The statistical discrepancy is equal to filled jobs from the demand side less filled jobs from the supply side, after addressing scope discrepancies. These two measures are, in principle, the same. The statistical discrepancy reflects measurement error associated with the source data.

Total jobs refers to all positions of employment that are currently filled, or are vacant and could be filled. It is the aggregate of the number of filled jobs and the number of job vacancies.

Total labour costs refers to all costs incurred by the employer in the employment of labour. It is further classified into three sub components: Compensation of employees, labour income from self-employment and other labour related costs to employers.

Total labour income refers to the employment related income received by households from all paid employment. It consists of all payments and benefits in cash, kind or services, which are received, over a given reference period, by individuals for themselves or in respect of their family members, by virtue of their involvement in current or former paid employment jobs.

Wages and salaries (internationally referred to as earnings) relates to regular and irregular remuneration in cash and in kind paid to employees for time worked or work done together with remuneration for time not worked, such as annual vacation and other paid leave or holidays (ASNA 11.8).

Wages and salaries is further classified into two categories: wages and salaries paid in cash, and wages and salaries paid in kind. Conceptually wages and salaries excludes severance and termination pay, which, along with, sick leave payments; and payments for other forms of leave other than annual leave and long service leave should be classified as employers' social contributions as recommended by the SNA 2008. However, as data providers in Australia are unable to consistently differentiate between these various types of severance and leave payments, and other wage and salary payments, these payments are included in the Australian System of National Account estimates of wages and salaries. Fringe benefits taxes which are payable on income in kind provided to employees are included as part of wages and salaries and also included in income taxes payable by households.

Payments to members of the defence forces consist of salaries and allowances, attendance pay and the value of food, clothing, and travel supplied to permanent members, reserves and cadets. Deferred pay is included but war gratuities, which are regarded as social assistance benefits, are not.

Wages and salaries also include changes in provisions for future employee entitlements, such as provisions for long service leave.

Wages and salaries paid include the values of any social contributions (e.g. to superannuation funds), income taxes, etc., payable by the employee even if withheld by the employer for administrative convenience, such as direct payment to a superannuation fund or the Australian Taxation Office (ATO). Also included are penalty payments (e.g. overtime, hazardous work allowances), supplementary allowances such as housing and meal allowances (unless paid as social benefits), holiday pay, payment while on sick leave, bonuses, and commissions, tips and gratuities paid directly to the employee by a third party.

Wages and Salaries paid in kind covers the cost to an employer of goods and services which are provided to the employee, or to another member of the employee's household, free of charge or at a substantial discount, and which are clearly of benefit to the employee as a consumer. Examples include meals, housing, uniforms that can be worn away from work, vehicles available for personal use, goods and services produced by the employer enterprise, recreational facilities, transportation, car parking, child care, low interest loans and stock options. Some of these benefits may appear more like intermediate consumption, but are included in compensation of employees because, even though they are paid to attract employees, they are benefits that employees would often have to provide themselves.

For information on the institutional environment of the Australian Bureau of Statistics (ABS), including the legislative obligations of the ABS, financing and governance arrangements, and mechanisms for scrutiny of ABS operations, please see ABS Institutional Environment.

This publication contains experimental estimates of the Australian Labour Account. The Australian Labour Account provides a conceptual framework through which existing labour market data from different sources can be confronted and integrated, with the aim of producing a coherent and consistent set of aggregate labour market statistics.

The Australian Labour Account is macro-economic in scope, building on the International Labour Organisation (ILO) fundamentals and expanding them to ensure consistency with the Australian System of National Accounts (ASNA). It aims to extend the analytical capacity of national accounts data by providing a labour-specific lens.

The Australian Labour Account produces a set of statistical tables of employment related data that are consistent with the ASNA.

The Australian Labour Account tables are designed for use in macro-economic analysis. It is intended they will provide annual and quarterly data on a similar timetable and at a similar level of industry detail as the national accounts.

Different data sources have been used in compiling the four quadrants of the Australian Labour Account. In general, the same data sources have been used to compile both quarterly and annual labour account estimates. Quarterly survey estimates have also been benchmarked to annual survey estimates where possible.

Australian Labour Account data at an industry level are derived where possible from data classified by industry reported in both business and household surveys. Where Australian Labour Account data at an industry level are not reported in surveys, the industry detail has been modelled using alternative sources.

The Australian Labour Account uses both published and unpublished data from various sources. These are detailed in the Concepts, Sources and Methods manual. Where unpublished data sources are referenced, for example using an ABS catalogue number, this is intended to provide background information relating to the underlying survey data only. It is not intended that users be able to fully replicate published Australian Labour Account data.

After adjusting for conceptual and coverage differences between data sources, a statistical discrepancy remains between the number of filled jobs as reported by businesses and the number of filled jobs as reported by households.

These discrepancies represent the cumulative impact of data source error, including survey error, and modelling error. Survey error includes both sampling error and non-sampling error. Sampling error is the predictable variability arising from the use of samples, rather than a complete enumeration of the populations of enterprises and households. Non-sampling error is all other error in the estimate, and includes error arising from the reliability of the survey population and related benchmark data and error made by respondents in reporting data. Further information on these issues can be found under Labour Account limitations of the Concepts, Sources and Methods manual.

There are currently no international standards regarding the production of a labour account, however a four step process has been documented by the ILO and was followed (to varying degrees) by the National Statistical Organisations in Denmark, the Netherlands and Switzerland in compiling their own labour accounts. The ILO process has been used as a guide in compiling the Australian Labour Account.

The ILO describes two approaches to compiling a labour account: a cross-sectional approach involving confrontation and reconciliation of key labour market measures, and a longitudinal approach which incorporates changes to population and labour force via births, deaths, and net migration, and includes measures such as duration of employment. The Australian Labour Account focuses on the cross-sectional approach (since this is the approach that supports data confrontation and reconciliation), and also provides a time-series dimension.

The development of the annual Australian Labour Account disaggregated by industry subdivision and division, and the quarterly Australian Labour Account disaggregated by industry division, provide an opportunity to significantly improve the quality of aggregates such as the number of jobs occupied within each industry, measures of hours worked, and labour productivity growth.

Contained within this release are Data Cubes, Main Features, Explanatory Notes, Technical Notes and a Glossary. For further reference the ABS has also compiled the Australian Labour Account Concepts, Sources and Methods manual. These all provide information on the terminology, classifications and other technical aspects associated with these statistics.

• Australian Labour Account Concepts, Sources and Methods (cat. no. 6150.0)

Quarterly estimates for the Australian Labour Account, September quarter 1994 through to the current quarter at the industry division level are released electronically via the ABS website as Data Cubes in spreadsheet format. Annual estimates for the Australian Labour Account, 1994-95 to 2019–20 at the industry subdivision and division levels have also been released electronically via the ABS website (ABS.stat).