21 December 2021
Go to release: Earnings Analysis Using Administrative Data Sources 2020
The Central Statistics Office (CSO) has today (21 December 2021) issued the Earnings Analysis using Administrative Data Sources (EAADS) 2020.
Morgan O'Donnell, Statistician, CSO, explains the impact of COVID-19 on the results presented today:
"The COVID-19 pandemic and the restrictions applied in response to it had a significant impact on the Labour Market in 2020. Earnings statistics for 2020 and comparisons with earlier years are impacted by changes in the composition of the labour market across 2020 and when compared to 2019 and earlier years. The level of earnings has also been impacted by the COVID-19 income support schemes introduced in 2020. These factors should be taken into account when considering the results presented in this publication."
Explaining the background to the publication and outlining the headline results presented today, Morgan O'Donnell continued:
"The Earnings Analysis using Administrative Data Sources (EAADS) publication presents earnings statistics compiled based on administrative data sources. The primary data source is the Revenue Commissioner’s employee tax data. This is linked to CSO's Business Register and other data to provide economic and demographic breakdowns of employee earnings in Ireland.
Only employments that were active in October of the reference year are included in the main analysis. This continues our ongoing approach to structure of earnings analysis, and aims to ensure coherence and comparability across reference years.
Earnings of certain employments impacted by the COVID-19 pandemic were supported by the Temporary Wage Subsidy Scheme (TWSS) which operated in two phases, a transitional phase from 26 March to 03 May and an operational phase from 04 May to 31 August 2020, and the Employment Wage Subsidy Scheme (EWSS) which replaced the TWSS and became operational from 01 September 2020.
Of employments in NACE sectors B-S that were active in October 2020, 29.9% were supported by a Wage Subsidy Scheme (WSS: TWSS or EWSS) at some point during the year. The proportion of employments supported varied significantly across the different sectors of the economy. The sectors with the highest proportion of employments supported were the Accommodation & Food Services sector (81.9%), the Arts, Entertainment, Recreation & Other Service Activities sector (55.9%), the Transportation & Storage sector (51.0%) and the Construction sector (50.2%).
WSS payments accounted for 4.3% of total earnings across all employments. Again, this varied across economic sectors. The sectors where WSS payments represented the highest proportion of earnings were the Accommodation & Food services sector (31.8%), the Arts, Entertainment, Recreation & Other Service Activities sector (14.6%), the Transportation & Storage sector (9.3%) and the Construction sector (8.5%).
With WSS supports included in earnings for 2020, where applicable, median weekly earnings increased by 5.2% between 2019 and 2020. When WSS supports are excluded from employee earnings in 2020, median weekly earnings decreased by 1.1% from 2019.
Comparing 2019 and 2020, the number of employments active in the reference month of October decreased by 4.4%. The number of active employments decreased in six of the 13 economic sectors between 2019 and 2020. The largest decreases were recorded in the Accommodation & Food service sector (28.9%) and the Arts, Entertainment, Recreation & Other Service Activities sector (15.6%)."
Referring to the separate Earnings & Labour Costs Annual Data (PxStat tables) also being published by the CSO today, Morgan O’Donnell, Statistician, commented:
"While the EAADS is the official source of annual earnings statistics, we have also prepared annual estimates from the quarterly Earnings, Hours & Employment Costs survey in order to provide additional analysis, including estimates of total earnings and hours and annual earnings categorised by regular, irregular and overtime earnings."
Impact of COVID-19 on Earnings Statistics
The COVID-19 pandemic and the restrictions applied in response to it had a significant impact on the Labour Market in 2020. Earnings statistics for 2020 and comparisons with earlier years are impacted by changes in the composition of the labour market across 2020 and when compared to 2019 and earlier years. The level of earnings has also been impacted by the COVID-19 income support schemes introduced in 2020.
These factors should be taken into account when considering the results presented in this publication. To highlight the impact of these factors, additional analysis has been included in the Main Results chapter.
Since Quarter 2 (Q2) 2020 the CSO has been publishing a series of Labour Market Insight Bulletins which were designed to provide high-level supplementary labour market analysis to users alongside the standard labour market outputs and metrics.
Change to employee tax data
For years 2011-2018 the employee tax data used for the EAADS came from employer end of year returns, P35, submitted to Revenue. The P35 was an annual return that was completed by all registered employers after the tax year end, up to 2018.
Since 1 January 2019 Revenue have operated real-time reporting of payroll (“PAYE Modernisation (PMOD)”). Employers are required to report their employees’ pay and deductions in real-time to Revenue each time they operate payroll. Information is provided to Revenue at individual payslip level. EAADS analysis for 2019 and 2020 is based on the more detailed employee tax data provided from Revenue’s PMOD system.
The use of this more detailed data has resulted in changes to how the EAADS is processed. One notable change is the method used to restrict the data in each year to only employments that were active in October of the reference year. The restriction to only employments that are active in October continues our existing approach to structure of earnings analysis, and aims to ensure coherence and comparability across reference years. Up to 2018 employments active in October were identified using employment start and end dates on the P35 data. From 2019 active employments are identified by reference to pay dates in the reference month. These differing methods applied may result in some differences in employments excluded.
An analysis of the impact of the October only restriction as well as earnings analysis for all employments without the October only restriction applied are provided in the background notes.
Revisions to 2011-2018
The last publication of the EAADS in November 2019 contained estimates for 2011 through to 2018. These estimates have been revised today following updates and improvements to the process to generate EAADS estimates. Firstly, the method used to restrict the data to employments active in October has been amended to include employments that commenced or ended in the month of October. Previously employments were required to be active throughout the month in order to be included. This change has resulted in a higher proportion of employments being retained in each year, and a reduced difference in average weekly earnings between the analysis of employments active in October and the analysis for all employments, without the October only restriction applied. An analysis of the impact of the October only restriction as well as earnings analysis for all employments, without the October only restriction applied are available in the background notes.
A further amendment related to employments with earnings not subject to Universal Social Charge (USC), who had previously been excluded as their earnings were not included in the main pay variable analysed. These employments have now been included in the analysis, subject to the standard cut-offs applied as part of the EAADS methodology. The additional employments retained include employments related to Community Employment Schemes (CES).
Results for years 2011-2018 have been updated to reflect these changes.
Morgan O'Donnell (+353) 85 804 9155 or (+353) 21 453 5269
or email earnings@cso.ie
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