Weekly Payroll Jobs and Wages in Australia methodology

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Reference period
Week ending 18 December 2021
Released
19/01/2022

The following sections have been updated in this release:

  • How data are processed: text updates in Aggregate adjustments and Suppression
  • Data variability and revisions: graph removed in Revisions in sub-populations

How data are collected

Source

The Australian Taxation Office (ATO) receives payroll information from employers with Single Touch Payroll (STP) enabled payroll and accounting software each time the employer runs its payroll. The ATO provides selected employer and job level data items from the STP system to the ABS to produce statistics.

Scope and coverage

The scope and coverage of these estimates are defined and constrained by the characteristics of the data sources from which these estimates are produced. As such, users should note that not all jobs and wages in the Australian labour market are captured within these estimates.

Payroll jobs

Payroll jobs as reported to the ATO through STP are in scope of these estimates. All payroll jobholders regardless of age or Australian residency status are included. Persons reported via STP must hold either a Tax File Number (TFN) or an Australian Business Number (ABN).

A payroll job is a relationship between an employee and their employing enterprise, where the employee is paid in the reference week through STP-enabled payroll or accounting software and reported to the ATO. Where an employee is paid other than weekly, the established payment pattern is used to include payroll jobs paid in weeks outside the reference week.

Payroll jobs reported via STP exclude owner managers of unincorporated enterprises (OMUEs), which are more prevalent in the Construction and Agriculture, forestry and fishing industries. 

Employers with 20 or more employees (large employers) commenced transition to STP reporting on 1 July 2018. Employers with less than 20 employees (small employers) began transitioning to STP on 1 July 2019. Any reporting concessions that were made available for small employers ended on 30 June 2021. At the time of this release, almost all large employers and eligible small employers are reporting through STP.

In addition, payroll jobs reported in the Defence Industry (ANZSIC Class 7600) are excluded from these estimates by the ABS to better align with other Labour estimates.

Wages

The STP reported wages associated with each payroll job are in scope of these estimates. Wages are gross amounts, prior to taxation and deductions and include:

  • salary payments and allowances,
  • labour hire payments and foreign income,
  • the value of payments in kind (where a fringe benefit amount is recorded),
  • bonuses where they are reported in the same field as normal payments.

The total wages concept broadly aligns with the Australian System of National Accounts (ASNA) definition of wages and salaries, with the exception of payments to employee's superannuation and severance and termination payments which are excluded.

More specifically, the following STP reported income items are included in the production of wages estimates;

  • gross income amount (including bonuses),
  • allowance income,
  • fringe benefit amount (reportable, taxable),
  • fringe benefit amount (reportable, tax exempt),
  • other income (not specified),
  • foreign income amount including tax exempt income,
  • Community Development Employment Project income.

Other data sources

The STP data are enhanced through combining other administrative data held by the ABS (also sourced from the Australian taxation system).

Sex, age and residential geography variables are primarily sourced from Client Register data (supplied by ATO to the ABS as part of the transfer of Personal Income Tax data). Sex can only be sourced from Client Register data. When age and residential geography are not available from Client Register data, they are sourced from STP data. The ABS receives annual snapshots of de-identified Client Register data from the ATO, for use in the production of statistics.

Industry of activity, sector and employment size variables of the employing business are sourced from the ABS Business Register (ABSBR).  

Variables from the Client Register and the ABSBR are updated periodically on different timings. See the Updating characteristic variables section of How data are processed for more information.

How data are processed

To produce estimates from STP data, several processes and treatments are applied.

Calendarisation

Accrual of end of financial year payments

Imputation

Aggregation

Suppression

Creation of indexes

Aggregate adjustments

Updating characteristic variables

Inclusion of unknown characteristics

 

These estimates are also affected by the dynamic nature and source of data. The impact on accuracy and coherence with other ABS labour statistics are described below.

Accuracy

Coherence

How data are released

All estimates are presented for weeks ending on a Saturday. 

Summary of outputs

Each release contains both payroll jobs and total wages indexes and percentage change movements. Estimates are available at the national, state and territory and Australian and New Zealand Standard Industry Classification (ANZSIC) division by selected jobholder and employer attributes. Australian Statistical Geography Standard sub-state regions (Statistical Area 4, Statistical Area 3 and Greater Capital City Statistical Area) and ANZSIC subdivision estimates are also updated in each release. 

Levels for jobs and wages are not available for release. The payroll jobs index provides a measure of changes in jobs over time since the week ending 14 March 2020. Information on levels for jobs are best sourced from estimates of filled jobs from Labour Account Australia and estimates of employed persons from Labour Force, Australia. More information is included in Differences to Labour Force employment statistics.

The data underlying these estimates are revised in each release and reflected in percentage change movements and indexes. See Data variability and revisions for more detail.

Time series estimates

The estimates are presented as an original series only. Seasonally adjusted and trend estimates are not yet available. A number of years of data will be required before seasonal patterns can be observed and adjusted for.

The calendarisation and imputation methodologies applied to the estimates account for calendar related variations, such as the number of days in a month, and different payment frequencies.

Privacy and confidentiality

Legislative requirements to ensure privacy and secrecy of this data have been adhered to. In accordance with the Census and Statistics Act 1905, results are confidentialised to ensure that they are not likely to enable identification of a particular person or organisation.

All personal information is handled in accordance with the Australian Privacy Principles contained in the Privacy Act 1988. For more information, see ABS Privacy.

More information

For more information on this methodology email labour.statistics@abs.gov.au.

Methods review

The ABS is continuing to review and improve the methods which support the Weekly Payroll Jobs and Wages series to enhance the quality of estimates. The Methods review section will be a regular feature of the release, as improvements to methods are progressively implemented.

Update of employer characteristics

Categorising payroll jobs by employer characteristics in close to real-time is challenging. From the release of 9 December 2021, the ABS has updated the method used to determine the employer characteristics of payroll jobs as they are added to the series and refined the process used to determine industry, enhancing statistical quality. Approximately 4% of all payroll jobs in the underlying dataset have had their employer characteristics updated.

The ABS recommends that analyses using estimates published prior to the 9 December 2021 release be refreshed with updated data.

Determining employer characteristics of newly reported payroll jobs

There are around 20 million unique jobholder-employer relationships, or payroll jobs, in the dataset (covering July 2019 to September 2021) which are the basis of estimates presented in the 9 December 2021 release.

The employer characteristics of payroll jobs are sourced from the ABS Business Register (BR), which includes two population groups (profiled and non-profiled). The assignment of employer characteristics to payroll jobs depends on which population group the employer falls within.

For payroll jobs worked at non-profiled businesses, the employer characteristics match those of the business’ Australian Business Number (ABN). Approximately 61% of payroll jobs in the dataset are worked at non-profiled businesses, and no change has been made to the employer characteristics of this population as part of this update.

Where an employer is part of the profiled population, payroll jobs are assigned to a Type of Activity Unit (TAU) based on a logistic regression model developed using 2016 Census data. The model references independent variables common to both Census and the Weekly Payroll Jobs and Wages in Australia dataset, including sex, age and region of usual residence. These are used to predict industry which conceptually aligns to a TAU.

Based on the model, each payroll job record is assigned a probability of being in a TAU present in the employing Enterprise Group (EG). Iterative random assignment is undertaken, via an allocation process, using these probabilities until employment benchmarks are met. Benchmarks are based on ABSBR data. A payroll job inherits the employer characteristics (industry, employment size and sector) of the TAU it is assigned to.

See the Glossary for more information on ABSBR populations, TAUs and EGs.

Update to the allocation process

This allocation process, initially designed for the Linked Employer Employee Dataset (LEED), was first run in April 2020 during the development phase of the Weekly Payroll Jobs and Wages in Australia.

In the release of 9 December 2021, the allocation process has been updated in line with the March 2021 BR data to improve the accuracy of employer characteristics in the profiled population. Only payroll jobs in the profiled population, which entered the STP dataset after April 2020 (14% of the whole dataset) are potentially affected by this update. The remainder of payroll jobs (86%) in the dataset were not subjected to the updated allocation process.

Payroll job populations as a proportion of the entire dataset
Profiled populationNon-profiled population
In dataset at April 202025%32%
New jobs since April 202014%(a)29%
Across entire dataset39%61%

a. Eligible jobs

Just over one quarter (28%) of eligible jobs, or 4% of the total dataset, saw a change in their industry coding as part of the update to the allocation process. In the estimates, these changes translate as transfers of payroll jobs and associated wages between industries. The following graph presents the distribution of payroll jobs by industry pre and post update.

Source: Weekly Payroll Jobs and Wages in Australia, Week ending 11 September 2021

Indexes of employer characteristics (industry, subdivision, employment size, sector) will see revisions from this update, particularly during 2021. This update has no impact on the Australia level indexes.

The revisions due to the method update varied across industry indexes and over time. The following industry indexes saw the largest revisions (in a single week) in payroll jobs:

Upward:

  • Mining, Information media and telecommunications, and Education and training.

Downward:

  • Rental, hiring and real estate services, Public administration and safety and Other services.

The following industry indexes saw the largest revisions (in a single week) in wages:

Upward:

  • Mining, Information media and telecommunications, and Education and training.

Downward:

  • Rental, hiring and real estate services, Administrative and support services and Other services.

The following graphs present pre and post update payroll jobs and wages indexes for the Accommodation and food services industry, up to the week ending 11 September 2021.

Source: Weekly Payroll Jobs and Wages in Australia, Week ending 11 September 2021

Source: Weekly Payroll Jobs and Wages in Australia, Week ending 11 September 2021

Revisions will vary across component indexes. Age group indexes for the 15-19 and 20-29 year old persons are subject to greater revisions, due to higher proportions of new payroll jobs in these age groups since the last allocation process.

Default industry for new jobs post allocation

New payroll jobs worked at profiled businesses which enter the dataset after this update, will not be subject to the allocation process until its next update. For these new payroll jobs, the enterprise group industry is assigned as the default, as this is the dominant industry across the breadth of business activity within the enterprise group. These jobs may see a revision in employer characteristics in future when they are subject to the next allocation process update.

Refining industry source

The process for determining the most appropriate industry assignment from the ABS Business Register was also refined as part of this update. A higher quality ANZSIC class variable is now used to derive industry division and subdivision. The magnitude of change at the ABSBR snapshot transition point (in the week ending 29 August 2020) has seen greater revision for some component indexes. This is most evident in the industry subdivision indexes and the largest employment size group.

More information on the ABSBR snapshot transition is in the Update of employer characteristics section of the Methods review in the week ending 19 June 2021 release.

Data variability and revisions

Weekly Payroll Jobs and Wages in Australia estimates are derived from data collected via the STP system, which effectively supports employer reporting obligations and ATO operational requirements through enabled software.

STP was not primarily designed to support the production of statistics, hence some inherent characteristics contribute to variability in the estimates and revisions between releases.

Payroll jobs and wages estimates (including percentage change movements and indexes) are revised in each release across the time series. Revisions primarily relate to the receipt of more complete STP data over time and have the greatest impact on the most recently reported information. Over time, as more employer-reported data is received, the size of revisions usually decreases. Users should therefore exercise caution when focusing on change in the most recent weeks of data, as this period sees greater levels of revision in subsequent releases. 

Aside from more complete reporting there are other factors which can influence the size, timing, duration and specificity of revisions.

Seasonality

Reporting variability

Revisions in sub-populations

Impact of unknown sex

 

Acknowledgement of source

STP data is supplied by the ATO to the ABS under the Taxation Administration Act 1953, which requires that such data is only used for the purposes of administering the Census and Statistics Act 1905. Any discussion of data limitations or weaknesses is made within the context of using the data for statistical purposes, and is not related to the ability of the data to support the ATO's core operational requirements.

These estimates also include Australian Business Register (ABR) data supplied by the Registrar to the ABS under A New Tax System (Australian Business Number) Act 1999, which requires that such data is only used for the purpose of carrying out functions of the ABS. Any discussion of data limitations or weaknesses is in the context of using the data for statistical purposes, and is not related to the ability of the data to support the ABR’s core operational requirements.

The ABS would like to acknowledge the critical support from the Australian Taxation Office (ATO) in enabling the ABS to produce these statistics.

Differences to labour force employment statistics

The Weekly Payroll Jobs and Wages in Australia estimates are a complementary insight to Labour Force statistics on employment and unemployment, which provide a longstanding and comprehensive view of the Labour market. 

The two releases generally show similar national movement in jobs and employment over time, however at the state/territory and industry levels, the changes can be more pronounced. The differences in concepts, scope and methodology used to produce these statistics can affect their interpretation as economic measures. Some factors that explain differences at the state/territory and industry levels include:

  • Real world factors - scope of STP reporting, multiple jobholding and seasonality, and
  • Measurement factors - variability in sampling, reporting and classification. 

The following key differences should be considered when comparing these statistics:

Weekly Payroll Jobs and Wages in AustraliaLabour Force statistics
Focus of the statisticsJobs.People.
Coverage

Around 10 million payroll jobs for which a payment was reported to the ATO through STP.(a)

Almost all large employers (with 20 or more employees) and eligible small employers are reporting through STP.

Coverage increased steadily from January 2020 to July 2021 as employers started reporting through STP.

All usually resident civilian people aged 15 and over (around 21 million people, of whom 13 million are employed).

Statistics are based on a large survey sample of around 50,000 people responding every month.

Revisions

Revised every release as payroll periods are completed (with imputed data replaced with actual data when received). This ensures comparability over time.

Revisions to jobholder and employer characteristics from periodic updates.(b)

Small revisions every 3 months, aligned with new population statistics.
Types of employment

Employee jobs who are paid through a STP-reported payroll.

Also includes a small number of jobs for non-employees who are paid through STP-reported payrolls.

All employed people, including:
Employees (including Owner managers of incorporated enterprises);

Owner managers of unincorporated enterprises;

Contributing family workers.

Whether paidOnly includes payroll jobs where a payment was reported to the ATO through STP or there is an established payment pattern.Includes all employed people who were paid or who had a job but weren't paid (on unpaid leave, temporarily stood down without pay, etc.).
Multiple job holding

Each job is counted separately, irrespective of whether it is worked by a multiple jobholder. People who work multiple jobs may be counted multiple times.

Industry is identified for each job, not just the main job and the level of multiple jobholding can vary between industries.

Each person is only counted once, and job characteristics (other than hours) relate to a person's main job.

Around 6% of employed people are multiple jobholders, particularly young people.

LocationResidence of the jobholder, based on address held by the ATO.Place of usual residence of people at the time of the survey.
Time seriesOriginal index series. No seasonally adjusted or trend series are available yet.Original and seasonally adjusted (trend is currently suspended, during the COVID-19 period).
  1. A compositional breakdown of payroll jobs can be found inDistribution of jobholder and employer characteristics.
  2. The update of jobholder and employer characteristics can be found in How data are processed.

Labour Force analysis of employment versus payroll jobs up to August 2020 can be found in Strong employment growth for non-employees. More information on the differences between Weekly Payroll Jobs and Wages estimates and similar ABS statistics are detailed in the Coherence section of How data are processed

History of change

A timeline of recently implemented methodological changes are listed below for easy reference.

By release date

Glossary

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Abbreviations

ABNAustralian Business Number
ABRAustralian Business Register
ANZSICAustralian and New Zealand Standard Industrial Classification
ASGSAustralian Statistical Geography Standard
ATOAustralian Taxation Office
FBTfringe benefits tax
GCCSAGreater Capital City Statistical Area
NANot Available
ptsIndex points
SA3Statistical Area Level 3
SA4Statistical Area Level 4
STPSingle Touch Payroll
TFNTax File Number
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