Statistics Iceland

Wage Statistics

Borgartuni 21A

IS-150 Reykjavik

Iceland

-

The data for LCS 2016 is taken from the ISWEL survey (Icelandic Survey on Earnings, Wages and Labour cost). The data for private sector and municipalities is based on a survey sample. Employees working in the central government or its institutions are all included.

NACE Rev. 2.

NACE Rev. 2 Sections B-S.

The Icelandic LCS 2016 includes the economic activities NACE Rev. 2; C, D, E, F, G, H, J, K, M, O, P, Q and R, which cover about 90% of the labour market (B-S) according to the Pay as You Earn data (PAYE). Economic activity M is not fully covered and therefore flagged. The economic activities I, L, N and S are missing in LCS 2016 for Iceland. The economic activity B is only a remote part of the Icelandic economy.

[Not requested]

The statistical units are the local units by division of the NACE Rev. 2 on a 2-digit level.

Enterprises with ten or more employees.

Iceland.

2016

2016

-

Full coverage data was received for employees working for the central government and its institutions. All employees working in institutions with 10 or more employees are included.

[Not requested]

[Not requested]

[Not requested]

[Not requested]

[Not requested]

-

[Not requested]

[Not requested]

Iceland has delivered LCS survet data five times. Known users, along with Eurostat, are institutions, companies, analysts, news media and the public.

The LCS data is used by Eurostat. In addition, part of the data is published on Statistics Iceland’s website.

User satisfaction has not been measured.

For the LCS 2016 most variables are accounted for; however a number of optional variables were excluded in the Icelandic results. These are:

•      D.11141 Company products
•      D.11142 Staff housing
•      D.11143 Company cars
•      D.11144 Stock options and share purchase schemes
•      D.11145 Other
•      D.1221 Guaranteed remuneration in the event of sickness
•      D.1222 Employers' imputed social contributions for pensions and health care
•      D.1223 Payments to employees leaving the enterprise
•      D.1224 Other imputed social contributions of the employer

 Information for three mandatory variables is missing. These are:

•      D.2 Vocational training costs
•      D.3 Other expenditure paid by the employer
•      D.5 Subsidies received by the employer

The Icelandic LCS 2016 includes the economic activities C, D,E, F, G, H, J, K, M, O, P, Q and R, which cover about 90% of the labour market (B-S) according to the Pay as You Earn data (PAYE). Economic activitiy M is not fully covered and therefore flagged. The economic activities I, L, N and S are missing in LCS 2016 for Iceland. The economic activity B is only a remote part of the Icelandic economy.

-

The data for LCS 2016 is based on the ISWEL survey (The Icelandic Survey on Earnings, Wages and Labour cost). The survey is based on a sample of provate companies and municipalities (local government) with 10 or more employees. In addition, data are collected directly from the central government for all its employees.

The ISWEL survey is subject to possible errors due to the sampling methods and/or quality of the PAYE (Pay as You Earn) data which the population is based on.

The ISWEL sample is a stratified cluster sample, where the sample unit is the business unit and the observation unit is the employee. The target population contains all business units with 10 or more employees. The population frame is based on monthly PAYE data. The PAYE register reflects the sum of the wages reported to the tax authorities. The population is stratified in sections and subsections according to NACE Rev. 2. Business units with more than A/m employees are selected with a probability of 1 (where A is the number of employees in the stratum and m is the number of business units to be selected from the stratum). For the rest of the population, a simple random sample is selected from each stratum.

Full coverage data was received for employees working for the central government and its institutions. All employees working in institutions with 10 or more employees are included.

For the municipalities, a sample is drawn as to achieve a certain proportion for each of the country's regions. The target population contains also municipalities with 10 or more employees.

The coefficients of variation (CV) for the population as a whole can be seen in table 1.

Table 1: Coefficient of variation for annual and hourly labour cost for population

Note: Annual labour cost = Code D (total labour cost), sum of the values of code D1, D2, D3, D4 minus D5 and Hourly labour cost = Code D (total labour cost), sum of the values of code D1, D2, D3, D4 minus D5, divided by the value of code B1, in Annex 1 to Regulation (EC) No 1726/1999. Unit of measure is labour cost per business units.

The coefficients of variation (CV) broken down according to the structure of LCS for Annual labour costs are listed in tables 2 and 3.

Table 2: Coefficient of variation for annual labour cost by NACE Rev. 2 sections

Note: Annual labour cost = Code D (total labour cost), sum of the values of code D1, D2, D3, D4 minus D5  in Annex 1 to Regulation (EC) No 1726/1999. - = No data is available, .. = Data is confidential. Unit of measure is labour cost per business units.

Table 3: Coefficient of variation for annual labour cost by size class

Note: Annual labour cost = Code D (total labour cost), sum of the values of code D1, D2, D3, D4 minus D5  in Annex 1 to Regulation (EC) No 1726/1999. - = No data is available. Unit of measure is labour cost per business units.

The coefficients of variation (CV) broken down according to the structure of LCS for Hourly labour cost are listed in tables 4 and 5. As seen in these tables there are some outliers in economic activity Q and size class 250-499. The reason for high standard error and high CV is due to settlement payments in business units that worked part of the year.

Table 4: Coefficient of variation for Hourly labour cost by NACE Rev. 2 sections

 Note: Hourly labour cost = Code D (total labour cost), sum of the values of code D1, D2, D3, D4 minus D5, divided by the value of code B1, in Annex 1 to Regulation (EC) No 1726/1999.  - = No data is available, .. = Data is confidential. Unit of measure is labour cost per business units.

Table 5: Coefficient of variation for hourly labour cost by size class

Note: Hourly labour cost = Code D (total labour cost), sum of the values of code D1, D2, D3, D4 minus D5, divided by the value of code B1, in Annex 1 to Regulation (EC) No 1726/1999.  - = No data is available. Unit of measure is labour cost per business units.

Some non-sampling errors can occur in the data.

The Icelandic LCS 2016 includes the economic activities C, E, F, G, H, J, K, M, O, P, Q and R. Those economic activities cover about 90% of the Icelandic labour market for business units with 10 or more employees according to the PAYE register. Economic activity M is not fully covered and therefore flagged. Economic activities I, L, N and S are not yet included in the ISWEL survey and therefore are those activities are missing. The economic activity B is a remote part of the Icelandic economy.
The ISWEL sample is based on the PAYE register and therefore errors in NACE classification in the PAYE register can have an impact on the coverage in the survey.

The sampling frame is built on the PAYE register, which in turn is the target population. Thus over-coverage is non-existing.

[Not requested]

The data is collected directly from the software each business unit uses for calculating wages. Taking advantage of data collection by direct access, it minimises the bias caused by recording.

Business units are obligated to participate in the survey if requested. Henceforth, response rate is very high, approximately 95%. For the 2016 data the response rate was not examined specifically. Normally, after a data collection starts from a business unit, it usually takes part in the survey for a long time and only drops out in case of splitting up or merges with another enterprise. Hence, enterprises stay in the survey for a continuous period of time and non-responses are rare.

[Not requested]

[Not requested]

The ISWEL data is collected directly from the software each business unit uses for calculating wages. Taking advantage of data collection by direct access, it minimises the bias caused by recording.

not applicable

Not applicable.

[Not requested]

[Not requested]

[Not requested]

[Not requested]

The ISWEL survey is based on a lengthy tradition of collecting data directly from the software each company uses for calculating wages. Every month, each business unit sends a text file containing detailed information on earning structure and cost items, together with background data on the individuals and the business units. Information is collected for all employees in the business unit. Thus, all data retrieved from the ISWEL survey is collected simultaneously.

The Icelandic LCS 2016 tables were first delivered to Eurostat in June 2018 and national publication is scheduled at end of the year 2018.

[Not requested]

[Not requested]

A separate survey was not conducted for the LCS since the Icelandic LCS is based on an ongoing monthly survey, the ISWEL survey. The Icelandic LCS 2016 was sent to Eurostat in end of June 2018, on time. 

[Not requested]

-

Iceland has only one region and therefore LCS data are provided only at NUTS 1 level.

The LCS 2016 data is based on the ISWEL survey which complies with most mandatory variables drawn up in the commission regulation (EC) no 1737/2005, and subsidiary commission regulations.

Incoherence can occur due to some specific characteristics of the Icelandic labour market.

• In Iceland each legal unit has a unique identification number and the business unit is equated to be the same as the legal unit
• The local unit is defined on the basis of the identification number (the same as above) and NACE 5-digit level as in previous submission.
• When defining full-time/part time employees all working hours are considered. In some industries a considerable part of the employees work mainly (and sometimes only) on overtime rates, as their main working hours are during nights and weekends. Thus, all hours are used when defining full-time employees.
• The grossing up factor for the local unit is based on the number of local units in NACE sections on a 2-digit level.

[Not requested]

Statistics Iceland has conducted the LCS five times; in 2000, 2004, 2008, 2012 and 2016. The sample size and coverage has grown with each survey with the exception of 2016, where the data for economic activity I was considered insufficient and therefore not submitted in the LCS 2016.

The ISWEL survey does not yet fully cover the Icelandic labour market. Data for NACE Rev. 2 economic activities I, L, N & S are missing in LCS 2016. Economic activity M is not fully covered in ISWEL and thus, aggregated data for those activities are flagged. In addition NACE 2-digit levels 05, 06, 07, 09 & 12 are insignificant parts of the Icelandic economy. Comparability between LCS surveys is listed in table 6.

Table 6 List of economic activities covered in Labour Costs Survey by Statistics Iceland 

[Not requested]

Coherence with LFS

The average actual hours worked by employee in the main job per year of the Labour Force Survey (LFS) has been estimated as the annual average from the quarterly data of the actual hours worked in the main job in the reference week in 2016 for employees. LFS weekly figures were multiplied by 52 weeks in the year. The results are shown in table 7 below.

Table 7: Number of hours actually worked per employee in LFS and LCS in Iceland¹

Note: - = No data is available, .. = Data is confidential, : = No data in the LCS to compare with.

All data for economic activities in table 7 are lower in the LCS 2016 than the LFS. This discrepancy can be explained by certain differences in the methodology of the surveys and a different sample design. LFS is a household survey (question survey) whereas LCS is based on information of administrative payroll system data from the business units. In the LCS there were only enterprises with 10 employees or more whereas the LFS figures include all enterprises and including self-employed.

¹The number of hours actually worked in the referenece year, expressed per employee, LCS code B1, divided by the value of LCS code A1, and the average actual hours worked in the main job per year of the LFS, again expressed per employee.

Coherence with SBS

A comparison of wages and salaries per employee with Structure of Business Statistics (SBS) can be seen in Table 8. In the LCS there were only enterprises with 10 or more employees whereas all firms are taken into account in the SBS data.

The fact that the LCS does not include small enterprises is obvious in the economic activity of Constructions (F). In the economic activity J small enterprises and enterprises in information technology (divisions 62 and 63) are missing from the sample of the LCS and therefore the difference is greater than in other economic activities.

 Table 8: Wages and salaries (in ISK), per employee in SBS and LCS in Iceland²

Note: - = No data is available, .. = Data is confidential, : = No data in the LCS to compare with.

²The variable 'wages and salaries', expressed per employee, LCS code D11, divided by the value of LCS code A1, and the same variable, per employee of the SBS.

Coherence with LCI

The following table shows the growth rate from the LCS 2012 and the LCS 2016 and the growth rate from the total labour cost series of working-day adjusted³ Labour cost index (LCI)

The main difference is the data coverage. The LCS is based on a sample of business units with 10 or more employees from one ISWEL survey. Whereas the LCI is mainly based on the PAYE register data and business units with 10 or more employees.

As seen in table 9 there is relatively small difference in growth rate with the exception in economic activities H, J & O. In the ISWEL survey some economic activities in certain sub-groups are missing. In the economic activity J small enterprises and enterprises in information technology (divisions 62 and 63) are missing from the sample of the LCS. Economic activities O, P and Q include only the public sector. Weights are adjusted for O, P, and Q to represent full coverage of these economic activities. Weights are not adjusted for J as the sub-groups that are missing are different from the groups that are included in the sample.

Table 9: Average annual rates of change of labour costs per hour between 2012 and 2016 in Iceland⁴

Note: - = No data is available, .. = Data is confidential, : = No data in the LCS to compare with.

³The LCI data is working day adjusted (WDA) not unadjusted. The main reason is that the source data is, i.e. without working days/calendar effects can only be produced through complicated adjustments.

⁴The average annual growth rates of the variable 'hourly labour costs', LCS code D divided by LCS code B1, and the average annual growth rate of the working day adjusted LCI. The growth rates should refer to the reference year of the survey and that of the previous survey.

[Not requested]

Table 10 contains a comparison with the National Accounts (NA) compensation of employees. The NA data for 2016 is preliminary. In the LCS there were only enterprises with 10 or more employees whereas all firms are taken into account in the NA data.

Table 10: Compensastion of employees (in ISK), per employee in NA and LCS in Iceland⁵

Note: - = No data is available, .. = Data is confidential, : = No data in the LCS to compare with.

⁵The variable 'compensation of employees', expressed per employee, LCS code D1 divided by the value of LCS code A1, and the same variable of the NA. The NA data on self-employed is not included.

[Not requested]

-

Users were informed via news on the Statistics Iceland website, https://statice.is/statistics/business-sectors/labour-cost/.

National publication was October 2018.

Results from the LCS data, along with metadata, are published on Statistics Iceland website www.statice.is.

[Not requested]

[Not requested]

Non-applicable.

not applicable

[Not requested]

[Not requested]

[Not requested]

[Not requested]

-

[Not requested]

[Not requested]

-