Weekly Payroll Jobs and Wages in Australia methodology

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Reference period
Week ending 15 October 2022
Released
10/11/2022

The following sections have been updated in this release:

  • How data are processed: text in Updating characteristics variables
  • Update of employer characteristics: new section added

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.

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 followed. Only those authorised under the Australian Bureau of Statistics Act 1975 have been allowed to view data about any particular firm in conducting these analyses. In accordance with the Census and Statistics Act 1905, results have been 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.

Update of employer characteristics

In this release, employer characteristics have been updated using a June 2022 ABS Business Register (BR) snapshot. This update enhances the quality of industry, employment size and sector indexes – particularly where these characteristics were previously unknown. The proportion of payroll jobs with unknown employer characteristics has reduced from 3.5% of total payroll jobs in the week ending 17 September 2022 (in the 13 October 2022 release), to 0.5% in this release.

The national payroll jobs and total wages indexes have not been impacted by this update. However, revisions can be seen in indexes presenting industry, employment size and sector. Week-on-week changes remain unaffected in most indexes, except at the transition point in the week ending 1 January 2022. This date was selected to minimise the disruption to indexes (as it sits on a period of seasonal decline in the labour market) while maximising the value of the characteristics update for estimates throughout 2022.

Revisions may be more pronounced for jurisdictions and industries with a small base of payroll jobs. Consequently, users should exercise caution when comparing week-on-week change and index levels for industry, employment size and sector across the transition point.

Update to Industry

Except for the ABSBR snapshot transition point (in the week ending 1 January 2022), there has been minimal impact on week-on-week change in industry indexes. Some industry index levels (including those by state and territory) have seen varying magnitudes of change from the transition point forward. This is predominantly due to the re-allocation of payroll jobs whose industry were unknown.

In the week ending 1 January 2022, the proportion of payroll jobs re-allocated to industries ranged from 6.6% in Accommodation and food services to 0.1% in Financial and insurance services. The timing of the transition point in this update may influence the magnitude of these proportions, particularly for industries which see greater seasonal downturn in payroll jobs at year-end. These industries have fewer payroll jobs than usual around this time, which may slightly increase their calculated share of re-allocated payroll jobs. 

Proportions of industry as at week ending 1 January 2022. 

Almost all the change seen in the industry indexes at the ABSBR transition point relates to the update of payroll jobs with an unknown industry rather than a refresh of the known industry of a payroll job. The main industry of a business tends not to change within a year, which the ABS confirmed via analysis of industry values between the March 2021 and June 2022 ABSBR snapshots.

Update to employment size

Businesses are more likely to change employment size group than industry, as businesses shrink or expand over time. As in the previous employer characteristics update, the 0-19 employee size group saw the highest proportion of payroll jobs re-allocated to other employment size groups. After the update, proportions of payroll jobs by employment size proportions for the week ending 17 September 2022, saw a fall of 2.2% in the 0-19 employee group, an increase of 1.6% for the 20-199 employee group and a 0.7% increase in the 200 employees and over group.

The overall effect of employment size changes from unknown employment size updates and a refresh of existing values, on the total number of payroll jobs in each employment size group, is seen in the following graph.

The effect of the latest update on employment size indexes is less visible at its transition point than in the previous update, as it occurs within a period of seasonal downturn, as seen in the graph below for the 0-19 employee size group.

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

 

Acknowledgement of source

These estimates are based on ABR data supplied by the Registrar to the ABS under A New Tax System (Australian Business Number) Act 1999 and tax data supplied by the ATO to the ABS under the Taxation Administration Act 1953. These require that such data is only used for the purpose of carrying out functions of the ABS. No individual information collected under the Census and Statistics Act 1905 is provided back to the Registrar or ATO for administrative or regulatory purposes. 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 or ATO’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.
Industry

Determined from the business' industry on the ABS Business Register. Industry coding is applied to all jobs held by multiple jobholders.

Self-reported by the person at the time of the survey. Industry is coded for the main job only.
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 in Characteristics spotlight: 2022.
  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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