Public sector employment and earnings methodology

Most businesses included on the ABSBR are in the non-profiled population. These businesses usually have simple structures that are suitable for ABS statistical purposes at the ABN level. Businesses included in the non-profiled population have homogeneous activity (i.e., operate predominantly in one industry sub-division), however, they can have large employment. For the non-profiled population, one ABN equates to one business.

For some businesses, the ABN unit is not suitable for ABS economic statistics purposes. The ABS maintains its own economic units structure through direct contact with businesses and these businesses constitute the profiled population which consists of large, complex and diverse groups of businesses. This population is represented by Type of Activity Units (TAUs) which consist of one or more business entities, sub entities or branches of a business that can be grouped according to production activity and can report a minimum set of data items. These TAUs are classified according to the industry of the main activity. The relationship between TAUs and their associated legal entities (ABNs) may be one-to-one, many-to-one, or one-to-many.

The initial step in converting transactions to data that can be used for statistical purposes is to convert transactions to daily pay events for individual employees.

The STP data are reported on a cash basis (the time when the payment was made) rather than an accrual basis (the time when the payment was earned). Production of real time estimates of labour market activity require the conversion of STP data from a cash basis to an accrual basis. This is done through a “calendarisation” method. This method breaks down all records to a common period (daily), which then allows the data to be aggregated to a longer period (e.g., financial year).

There are some types of payments that cannot be attributed to a defined pay cycle period, these are shown when the payment is made. For the data included in this release, the individual pay events are aggregated to a financial year reference period.

STP reporting may be incomplete for a reference period for a range of reasons including, but not limited to:

• Different business reporting habits
• Different pay cycle period reporting

To account for incomplete reporting by an employer during the reference period, imputation is applied when an employer has reported for some employees or part reported during a calendar month. Employers who have not reported at all during the reference period are accounted for in a later process (weight adjustment).

Imputation occurs if an employee has not yet had payment data reported for the period and a termination date and/or a termination payment does not exist. It is assumed that their payment status (pay frequency) is consistent with their previous reporting record. Imputation extends a jobholder's daily rate to the end of the relevant reference period and is only applied:

• to the end of the reference month of the jobholder’s latest pay event, where it does not extend to the end of the reference month, and they do not have a termination date and/or termination payment.
• for jobholders where a regular payment pattern can be determined.
• to in scope earnings payments (wages and salaries). Other earnings payments such as lump sum leave, termination and redundancy payments are not imputed.

No imputation is applied for new employees without historical payment information, until a pattern can be determined. This means that there can be a lag before a new employee contributes to the estimates (after their initial pay period). The lag is longer for new jobs with employers who have less frequent payment and reporting periods. No adjustment is applied to account for this new job lag.

Once calendarisation and imputation are applied, the employee level data for the reference period is aggregated to the ABN used by the employer for STP reporting. This forms the core employer level data that are transformed to statistical unit level data.

For the non-profiled population (i.e. businesses with a simple structure), the ABN is directly mapped to the statistical unit.

For the profiled population (i.e. businesses with a complex structure), there can be many ABNs and the mapping of employer level data to the statistical unit is more complex. ABN level data is aggregated to the highest level of the ABS economic units model, the Enterprise Group (EG). The EG level data are then apportioned into one or more TAUs using a proration factor based on total wages and salaries and ABSBR employment. If the business/organisation operates in more than one state, the data is further apportioned to the state level.
 

Statistical units are stratified by state, industry and employment size. When employing businesses do not report to STP during the reference period (i.e., full non-response), a non-response adjustment (weighting) is applied to the data received from responding businesses to fully account for the employee earnings of the target population (all employing businesses). 

Statistical unit level data are aggregated to the output classifications of state/territory, industry division, level of government and public sector. 

Percentage change movements within this release are calculated from unrounded level estimates.

STP is a dynamic administrative data source, hence these estimates may be subject to the following sources of error:

• Conceptual misalignment - The Australian tax system is purpose-built and complex, and in some cases, it is difficult to determine how a particular STP item should be used to describe impact on wages and salaries. While all care is taken, some income items are subject to this type of validity error. Coherence with other sources indicates that this has a low impact on the aggregates.
• Reporting error - This is likely to be present in both employee and employer information used. While only the most significant reporting errors are identified or adjusted, some reporting errors may remain. These errors are considered to have a low impact on the aggregate series, given their coherence with other similar statistics, and can also be corrected through subsequent reporting.

Changes to the structure of profiled businesses may also cause error in the data due to the lag between real-world change and in applying the updates to the ABSBR.

Revisions are a change in the value of a published value and may arise due to a variety of reasons. They reflect both the complexity of measurement, and the need to balance precision and timeliness to maximise the utility of the indicator.

Revisions may occur to PSEE due to:

• Revisions to the source STP data including receipt of updated or more complete data.
• Refinements to decisions made around the treatment of data anomalies in the series.
• Annual frame updates, including updates to the structure of profiled businesses.
• Implementation of methodological and process improvements.

The methods adopted for PSEE have been aligned as closely as possible to similar earnings statistics produced by the ABS. Changes in wages and salaries in these estimates may differ to other statistics due to differences in the concepts, scope and methodology used. For example, these estimates:

• contain a combination of administrative data collected for taxation purposes from employers, whereas other ABS data sources are compiled for the explicit purpose of producing statistics;
• exclude unreported cash in hand payments which may be included in household and business surveys;
• do not account for hours worked, hours paid for, job attachment where a payment has not been made, or jobholders temporarily stood down without pay, or employment status of employees (i.e., full time or part time), which are considerations in other Labour statistical survey measures.

In November 2023, the first Public Sector Employment and Earnings (PSEE) estimates were published using data sourced from the Australian Taxation Office’s (ATO) Single Touch Payroll (STP). This marked a change from the Survey of Employment and Earnings (SEE) data that was directly collected from businesses/organisations via a sampled survey. The PSEE data series starts from the 2021-22 financial year, replacing the SEE data series from 2022-23. Estimates for 2021-22 are available for both the PSEE and SEE.

The conceptual basis for PSEE STP based estimates has been aligned with SEE in all aspects where practical. Methods have been developed to:

• Ensure effective alignment with the conceptual basis for SEE; and
• Maximise the value of using STP data, which is administrative data that is close to a complete census of public sector businesses (as well as most private sector businesses).

Although every effort has been made to produce estimates on the same basis, data will not align exactly given the different data sources, processes and methods. The tables below summarise key similarities and differences between SEE and PSEE.

Detailed information on the differences described in the table above are listed below;

• The data sources are different. SEE collects reported payroll data from public sector businesses/organisations for statistical purposes, while STP data reflects payroll reporting to the ATO for taxation (and other) purposes.
• STP uses the ABS Frame population and applies a coverage adjustment (weighting) to the STP data to account for any discrepancies between the two populations. SEE applies Sample Frame Maintenance Procedures to adjust for discrepancies in business operations and the ABS Frame.
• The STP data needs to be transformed through a few steps including imputation, aggregating from monthly to annual information and quality assurance editing before it can be used to produce PSEE estimates. SEE data is transformed from a sample of reporting units and as such is subject to sampling and non-sampling error.
• For the ABS Maintained Population, PSEE requires an ABN-TAU Mapping method to distribute ABN level input data to match the units model, enabling it to make use of the ABS Frame classifications. SEE receives the reported data at the ABS unit’s model level as requested for a selected business.
• Historically, SEE included the defence force Australian Public Sector (APS) employees only. PSEE includes all APS and Australian Defence Force (ADF) personnel, as a split is not available in STP data. This increases data in areas of Commonwealth government, all states and the Public Administration and Safety industry. Information on the size of the ADF and APS components of the Australian defence force is available in the Department of Defence Annual Reports.
• One of the components of cash wages and salaries includes salary sacrifice. STP phase 1 data has some limitations and is not able to provide a complete measure of salary sacrifice. As such, until STP phase 2 data is mature enough to use, salary sacrifice amounts will be modelled for PSEE using other available ABS data. The current experimental modelling approach uses the annual ratio of salary sacrifice to cash wages and salaries to estimate the salary sacrifice amounts. The annual ratio for select industries is derived by applying the annual movement of the Average Weekly Earnings (AWE)'s ratio to the last SEE cycle's ratio. Industries that do not use the AWE ratio (due to reduced coverage), will apply a STP phase 1 salary sacrifice ratio within the model.
• Finally, PSEE uses an employment stock measure which is a count of those employees paid in the month of June. This differs slightly to SEE which counted the number of employees paid on the final pay period of the financial year.

Most of the difference between PSEE and SEE is accounted for by the broader scope of the Department of Defence in PSEE. A smaller contributor is the slight difference in employment scope.

For more information on the sources and methods used for the replaced Survey of Employment and Earnings, go to Employment and Earnings, Methodology

The 2021-22 financial year is the only period that data is available for both SEE and PSEE. For a comparison of this period, go to Data Source Comparison, SEE & PSEE.

• Refinements made to the salary sacrifice model inputs to ensure continued robustness and coverage of this data item. Salary sacrifice is an earnings component of the published cash wages and salaries series.

• Data source was changed from a sampled survey to payroll data, as the newly named Public Sector Employment and Earnings is released for 2021-22 and 2022-23 financial years. The new data source is the Australian Taxation Office's Single Touch Payroll. 
• STP estimates published in November 2023 for the 2021-22 financial year replace the experimental STP data published in late 2022 for the same period.

• Last release for the Survey of Employment and Earnings. This is the final point in the series using data sourced from a sampled survey.
• Experimental estimates for the 2021-22 financial year using STP data are released.

• The new annual release was renamed as the Survey of Employment and Earnings, and published annual data from the 2007-8 financial year.

• June 2007 was the last quarterly release of Wage and Salary Earners, Public Sector, Australia.

• Quarterly survey commenced, based on the ABS Business Register.

Recording wages when they are earned, accrued or incurred regardless of when payment is made or received. 

A register of all Australian businesses and organisations maintained by the Australian Bureau of Statistics (ABS) for the purpose of producing statistical frames and business demography outputs. It contains identifying and classificatory data for each business and organisation.

Information to populate the ABS Business Register is largely sourced from the Australian Business Register.

The ABS Business Register consists of two subpopulations, the profiled population and the non-profiled population. The ABS Business Register uses an economic units model to describe the characteristics of businesses and the structural relationships between related businesses.

A unique identifier. To be entitled to an Australian Business Number (ABN), an organisation must be one or more of the following:

• a company registered under the Corporations Act 2001,
• an entity carrying on an enterprise in Australia,
• a government entity,
• a non-profit sub-entity for Goods and Services Tax purposes, or
• a superannuation fund.

A non-resident entity may be entitled to an ABN if they are carrying on an enterprise in Australia and/or, in the course of carrying on an enterprise, the entity makes sales that are connected with Australia.

The data store containing details about businesses and organisations that have registered for an Australian Business Number. More information can be found on the ABR website. 

Recording the wage payment in the pay period when the payment was received by the employee. 

Remuneration for time worked or work done and for time not worked, such as annual and other types of paid leave. Comprises regular and irregular payments, including salary sacrificed amounts. Wages and salaries in cash are gross amounts, that is, before tax and other items (e.g. superannuation) are deducted. 

All public sector units controlled by the Australian Government are classified to the Commonwealth Level of Government. This includes government units controlled by the Australian Government, public financial corporations controlled by the Australian Government and Public non-financial corporations controlled by the Australian Government. Those bodies run jointly by the Commonwealth government and State governments are classified to Commonwealth. 

Persons who work for a public sector employer, where the employee has received payment in the reference month through Single Touch Payroll (STP) enabled software and reported to the Australian Taxation Office (ATO). 

An organisation with an Australian Business Number that provides employment income to one or more people, and reports through the ATO STP system. 

An institutional unit covering all the operations within Australia's economic territory of legal entities under common control. Control is defined in Corporations legislation. Majority ownership is not required for control to be exercised. An enterprise group may have one or more TAUs. 

Based on a business’ employing locations sourced from the ABR or STP data. 

A homogenous grouping of economic activities undertaken to produce goods and services. The Australian and New Zealand Standard Industrial Classification is used to classify an entity to an industry based on its dominant activity. 

The broadest grouping of industries within the Australian and New Zealand Standard Industrial Classification. The main purpose of the industry division level is to provide a limited number of categories, which give a broad overall picture of the economy. There are 19 mutually exclusive divisions. For more information see the Australian and New Zealand Standard Industrial Classification. 

All public sector units controlled by a local government are classified to the Local Level of Government. Local government units are usually known as councils and are constituted through Local Government legislation. They are established to govern articulated regions within the state or territory known variously as districts, municipalities, shires, or areas. The power to create or vary these regions usually lies with the Governor General, State Governor or a Commonwealth Minister. 

The vast majority of businesses included on the ABSBR are in the non-profiled population. Most of these businesses have simple structures that are suitable for ABS statistical purposes at the Australian Business Number (ABN) level. For the non-profiled population, one ABN equates to one business.

For a small number of businesses, the ABN unit is not suitable for ABS economic statistics purposes and the ABS maintains its own economic units structure through direct contact with businesses. These businesses constitute the profiled population and are represented by Type of Activity Units (TAUs). This population consists of large, complex and diverse groups of businesses, known as enterprise groups. 

The Public/Private classification divides the economy into two sectors: Public (government units and units controlled by government); and Private (all other units). For more information, see the Standard Economic Sector Classifications of Australia (SESCA) release. 

The Single Touch Payroll (STP) system sends taxation and superannuation information from a business' STP-enabled payroll or accounting software to the ATO as a business runs its payroll. 

All public sector units controlled by state/territory governments are classified to the State Level of Government. This includes government units controlled by a state/territory government, public financial corporations controlled by a state/territory government and public non-financial corporations controlled by a state/territory. 

Termination dates associated with each employee as reported through Single Touch Payroll. 

A TAU consists of one or more business entities, sub-entities or branches of a business that can be grouped according to production activity, and can report a minimum set of data items. TAUs are classified according to the industry of their main activity. The relationship between TAUs and their associated legal entities (ABNs) may be one-to-one, many-to-one, or one-to-many.