Concepts and definitions

Bonuses and allowances not paid in each pay period

Bonuses and allowances not paid in each pay period are such as performance-based bonuses, holiday bonus and holiday supplement and seniority increments paid in some hourly paid fields. Payment of one-off pay components can also be based on collectively bargained agreements.

Structural statistics on wages and salaries:

Holiday supplement paid for days off not taken is not included in these bonuscomponents in the structural statistics on wages and salaries.

Index of wage and salary earnings:

The index of wage and salary earnings measures the development of earnings from regular working hours regardless of the mode of payment. Components paid on the basis of performance are included in the earnings concept so that they are divided evenly over the whole calendar year. Similarly, bonuses and allowances not paid in each pay period based on collective agreements are evenly divided for the whole year. All these components belonging to the concept of index of wage and salary earnings, such as holiday bonuses are not included in data on wages and salaries used in the calculation of the index, but they are taken into consideration in index calculation only in case changes in their relative share are agreed in collective bargaining. In the index of wage and salary earnings contractual pay increases paid retrospectively are also taken to the quarter when they were earned.

Labour cost survey:

In the concepts of the labour cost survey compensations for termination of an employment relationship belonging to bonuses and allowances not paid in each pay period are included in social costs.

Labour cost index:

In the labour cost index bonuses and allowances not paid in each pay period also include contractual pay increases paid retrospectively from previous pay periods. The labour cost index also contains incentive stock options according to their exercise value.

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Bonuses and allowances not paid in each pay period are not published in the statistics on private sector and local government wages and salaries. These components are not included in the index of regular earnings.

Employee

A wage and salary earner (employee) is a person, who has an employment relationship with an employer and who is compensated for work performed. Wage and salary earners are either salaried employees or workers of the employer.

In statistics on wages and salaries, wage and salary earners are as a rule not divided into salaried employees and workers. A division can, however, be made according to profession or pay system. In statistics on wages and salaries, entrepreneurs paying their own salaries are not classified as wage and salary earners, as their earnings usually differ too much from the earnings of other similar wage and salary earners. In these statistics a single wage and salary earner may have several employment relationships that are, however, all treated as separate instances of wage and salary earner in the statistics.

Self-employed persons who pay even part of their earnings as salary to themselves are recorded as wage and salary earners in the labour cost statistics.

Employer sector

Employer sector describes the structure of the labour market and is determined by the decision-making unit. The classification of employer sectors used in statistics on wages and salaries and in statistics on labour costs is a national adaptation of the Classification of Sectors that is used in economic and social statistics (Classification of Sectors 2000).

The classification used in statistics on wages and salaries has the following structure:

Local government sector

Operating units of municipalities and joint municipal boards, and municipal enterprises

Central government sector

Agencies and institution financed from the State budget

Private sector

Private enterprises, enterprises with central or local government majority holding and state enterprises

Non-profit corporations, parishes, and organisations and foundations are also included in the private sector in statistics on wages and salaries.

The structure of the classification of sectors used in statistics on labour costs and in the labour cost index is similar to that of the classification used in statistics on wages and salaries.

In the index of wage and salary earnings, non-profit corporations, parishes and organisations form a separate employer sector of their own (Others).

Full-time

Structural statistics on wages and salaries:

In structural statistics on wages and salaries, the division into full-time and part-time employment is based on regular weekly working hours. In these statistics, employment relationships with regular weekly working hours exceeding 90 per cent of the general working time in the industry are defined as full-time. It has not been possible to define employment as full-time or part-time for wage earners whose regular working hours are not known. This may be due to non-reporting or irregular working hours of the person in question. For public sector teachers, full-time and part-time employment has been defined on the basis of the conditions of the employment relationship. In the structural statistics on wages and salaries, private sector teachers whose weekly teaching duty is at least 16 hours are defined as working full-time.

Statistics on private sector wages and salaries:

For private sector monthly wage earners, the definition of full-time employment is based on weekly working hours, as in the structural statistics of wages and salaries. In these statistics, wage and salary earners whose regular weekly working hours exceed 90 per cent of the general working time in the industry are defined as working full-time.

Information on other wage and salary earners' full-time employment is obtained through inquiries or defined according to the employment relationship. If a wage and salary earner's regular weekly working hours are not known, also information on earnings is used to define full-time employment.

The distinction between full-time and part-time employment is not made separately for private sector hourly wage earners.

Statistics on public sector wages and salaries:

For wage and salary earners in the public sector, full-time and part-time employment is defined on the basis of the character and conditions of the employment relationship. Information on full-time and part-time employment is usually obtained through inquiries.

Labour cost survey:

In statistics on labour cost, an employee whose working hours are specified in the collective agreement for government employees or the collective agreement, or the regular working time of the unit in question, is defined as working full-time.

Cf. Part-time

Full-time equivalent

Full-time equivalent describes the labour input of a person converted to a full-time employee. All paid hours (regular working hours+overtime hours) of an enterprise (corporation) are divided by the average paid hours of full-time wage and salary earners in the enterprise (corporation).

Hours paid

Hours paid refer to those hours of total working time for which wage and salary earners are paid. Hours paid can be hours worked or not worked, or absences (annual leaves, sick leaves, public holidays, other time off).

Hours worked

Statistics on wages and salaries:

In statistics on wages and salaries, statistics on earnings in the industries which pay hourly wages are compiled for hours actually worked. Hours actually worked refers to the working time an employee has spent on his/her actual duties. Hours actually worked include time and piece rate work and contract work hours as well as Sunday and overtime hours. Working hours are based on the Working Hours Act.

Labour cost survey:

Hours actually worked refer to the working time an employee has spent on his/her actual duties. They also include Sunday and overtime work. Hours actually worked include time spent in training, but not unpaid overtime. In labour cost statistics, hours actually worked can be defined also as paid hours minus paid leave.

Labour costs

Labour costs describe all costs incurred by an employer from the employment of labour. Labour costs are usually presented as costs for an hour worked. Costs arising from work premises, commuting or untaxed daily allowances are not included in labour costs.

Total labour costs are obtained by deducting employer's subsidies from the sum of labour cost items. Employer's subsidies are intended for full or partial financing of costs arising from direct compensations paid by the employer. Such subsidies comprise employment subsidies and training compensations paid to employers.

In the labour cost index, labour cost items are grouped as follows:

  • remuneration exclusive of one-off pay components
  • one-off pay components
  • social security costs

In the labour cost survey, labour cost items are divided into the following main groups:

  • direct earnings
  • one-off pay components
  • remuneration for days off
  • contributions to personnel funds
  • costs of fringe benefits and company products
  • social security costs
  • training costs
  • other labour force costs

Direct earnings refer to wages and salaries paid for hours worked in each pay period. Direct earnings comprise

  • direct compensations paid on the basis of hours worked, output produced or amount of work performed
  • compensations for overtime, shift work and the like
  • additional bonuses and compensations paid regularly in each pay period.

One-off pay components refer to items that are not paid regularly in each pay period. Such bonuses that are often paid only once a year include performance-based bonuses and holiday pay, and seniority increments paid in some hourly paid fields. Payment of one-off pay components can also be based on collectively bargained agreements.

Pay for days off refers to compensations paid for statutory, agreement-based or voluntarily granted leaves, national holidays or other paid days of leave. Typical items of this group are pay during annual holiday entitlement, monthly paid employees' pay during national holidays, hourly paid employees' compensation during national holidays and days of leave in compensation of shortened working hours.

Payments to personnel funds refer to the sums enterprises may annually contribute to their employees' saving systems, such as personnel funds.

Costs of fringe benefits and company products include all costs incurred by an employer from the goods and services it provides for to its employees. Such goods and services include e.g. company car and subsidised meals, incentive stock options and personnel's recreational and social activities. Own personnel's pay is not included.

Social security costs refer to the sum employers pay for the social security benefits of its employees. Such statutory, agreement-based or voluntary payments include employment pension, social security and unemployment insurance contributions. Additionally, this group comprises as imputed social security funding items pay during illness and parental leave (net, i.e. less compensations paid to the employee by the Social Insurance Institution) and occupational health care costs (likewise, net), as well as compensations arising from the termination of an employment relationship.

Training costs include e.g. costs of professional training services, costs of course participations, fees of instructors hired from outside the enterprise and payments to organisations arranging training. By contrast, pay for the participants during training is not counted as training costs but as pay for hours worked.

Other labour costs include e.g. costs arising from protective and working clothes and from the procurement of labour.

Employer's taxes paid on the basis of the sum of wages and salaries or the employed labour force that the labour cost concept of the European Union contains do not exist in Finland.

The concept of labour costs partly equals the national accounts concept of compensation of employees but exclusive of e.g. occupational health care, training and recruitment costs.

Monthly wage earner

Monthly wage earners are remunerated for work performed on a monthly basis. Earnings are usually based on one month's working time and tend to stay the same from month to month. Monthly wage earners are normally salaried employees. The pay system is determined in the collective agreement.

Part-time

Structural statistics on wages and salaries:

In structural statistics on wages and salaries, the division into full-time and part-time employment is based on regular weekly working hours. In these statistics, employment relationships with regular weekly working hours that are more than 10 per cent shorter than the general working time in the industry are defined as part-time. It has not been possible to define employment as full-time or part-time for wage and salary earners whose regular weekly working hours are not known. This may be due to either non-reporting or irregular working hours of the person in question. For public sector teachers, full-time and part-time employment has been defined on the basis of the conditions of the employment relationship. In the structural statistics on wages and salaries, private sector teachers whose weekly teaching duty is less than 16 hours are defined as working part-time.

Statistics on private sector wages and salaries:

For private sector monthly wage and salary earners, the definition of part-time employment is generally based on weekly working hours, as in the structural statistics of wages and salaries. In these statistics, wage and salary earners whose regular weekly working hours are over 10 per cent shorter than the general working time in the industry are defined as working part-time.

Information on other wage and salary earners' part-time employment is obtained through inquiries or defined according to the employment relationship. If a wage and salary earner's regular weekly working hours are not known, also information on earnings is used to define part-time employment.

The division between full-time and part-time employment is not made separately for private sector hourly wage earners.

Statistics on public sector wages and salaries:

For public sector wage and salary earners, full-time and part-time employment is defined on the basis of the character and conditions of the employment relationship. Information on full-time and part-time employment is usually obtained through inquiries.

Labour cost survey:

In statistics on labour cost, an employee whose working hours are shorter than the working hours specified in the collective agreement for government employees or the collective agreement, or the general working time of the unit in question, is defined as working part-time.

Cf. Full-time

Referencing instructions:

Official Statistics of Finland (OSF): Labour cost survey [e-publication].
ISSN=1799-3288. Helsinki: Statistics Finland [referred: 17.12.2017].
Access method: http://www.stat.fi/til/tvtutk/kas_en.html

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