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Wages and Salaries

Wages and salaries broadly refer to the monetary compensation, or remuneration, that employees receive for work performed. Wages typically refers to earnings per hour; salaries typically refers to annual earnings paid regardless of the actual number of hours worked.

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Definitions and Sources:

Wages and salaries are estimated from employer surveys, household surveys and extraction of data from administrative databases. In Canada, several institutions collect and disseminate information on wages and salaries. Note that the definitions of wages and salaries vary across data sources.

Statistics Canada

Statistics Canada directly measures wages and salaries through primary sources such as employer surveys, household surveys and extraction of data from administrative databases. A number of these programs rely on data provided by the Canada Revenue Agency (CRA). Combining and transforming this primary data, Statistics Canada also develops additional data products including other measures and linked databases.

Wages and Salaries Definition

Wages and salaries refer to the gross pay before tax paid to employees, in cash or in kind, for work performed under the general direction of an employer. It represents the many types of payments given to all employees regardless of their type of work (full- or part-time), method of payment or duration of employment.

Wages and salaries are often used interchangeably. The essential difference between them is that salaries typically refer to a fixed amount per pay period, usually per year or per month, while wages refer to an amount paid per hour. However, in the statistical context, salaries and wages are used interchangeably. More details are available here.

Primary Sources

Survey of Employment, Payrolls and Hours

The Survey of Employment, Payrolls and Hours (SEPH) is a business survey collecting information on taxable payrolls from employers with two or more employees (i.e. excluding self-employed persons with no employees). The SEPH obtains this information through a combination of payroll deduction accounts provided by the Canada Revenue Agency (CRA) and the Business Payrolls Survey (BPS). The BPS is a representative sample of payroll data from employers. SEPH provides estimates for average weekly earnings calculated as the gross taxable payroll divided by the total number of weekly paid hours. It is released monthly, two months after the reference period.

Census

The Census of Population is a mandatory survey of all households in Canada, conducted every five years. In previous years, income statistics were collected on the long-form questionnaire. In the 2011 Census, the long-form questionnaire was replaced with the voluntary National Household Survey NHS (although it still collected income information), which was distributed to 33% of households. The 2016 Census, however, derived income information, including wages and salaries, solely from the CRA administrative data (including T1, T4 and records from other tax files). This was done to reduce response burden and to increase the quality and quantity of income statistics data available. Income data from the census, including wages, can be cross-referenced with many labour and socioeconomic variables.

Labour Force Survey

The Labour Force Survey (LFS), a monthly household survey, asks respondents to report their current and usual earnings at their main job each month. Respondents can report their earnings in the form of their choice (annual salary, biweekly earnings, etc.). All responses are then converted into hourly, weekly and monthly wage rates based on the typical number of hours worked reported (both employed and self-employed). In addition, a subsample of LFS respondents are selected to complete the Canadian Income Survey (CIS), which combines survey responses with tax data extracted from administrative files.

Canadian Income Survey

The Canadian Income Survey (CIS) is a household survey that replaced the Survey of Labour and Income Dynamics in 2012. It derives its annual income information mostly from CRA data sources. Income data from CIS, including wages, can be cross-referenced with several labour and socioeconomic variables. The list of variables not focused strictly on income is less detailed than that available in the census data.

T1 Family File

The T1 Family File (T1FF) is an administrative database containing annual income information provided to Statistics Canada by CRA. The T1FF includes data from individual T1 tax returns, the Canada Child Tax Benefit (CCTB) and in some cases the T4. It includes tax filers, non-filing spouses or partners, and children. As such, it covers approximately 95% of the Canadian population and contains very detailed information on sources of income, tax credits and deductions. It also contains some demographic information but is limited to what is gathered from the tax files. Access to T1FF data is restricted but researchers may access the Longitudinal Administrative Databank (LAD), which contains an anonymized random 20% subsample of T1FF data (see the Data Access section below).

Job Vacancy and Wage Survey

Until 2017, the wage component of the Job Vacancy and Wage Survey (JVWS) collected average hourly wages paid to full-time employees. While the job vacancy component of the JVWS is continuing, its Wage Component has been suspended until further notice to review and improve the data collection methodology.

Other Measures

The Estimates of Labour Income (ELI) provides an aggregate measure of employee compensation. The data are drawn from administrative files (CRA’s T4 Supplementary file), Statistics Canada surveys (e.g. SEPH) and other sources (e.g. provincial workers’ compensation boards). It also provides estimates for total employers’ social contributions (i.e., payments made by employers for the future benefit of their employees, including employee welfare, pensions, workers’ compensation, employment insurance). ELI is derived in order to supply the System of National Accounts (SNA) with the compensation of employees’ component of Gross Domestic Product (GDP) income-based measures.

Labour productivity measures (national [quarterly] and provinces and territories [annual]) provide aggregate measures of labour compensation. Estimates are based on administrative tax files and surveys (e.g., the LFS and SEPH). Labour income for the self-employed is imputed.

Linked Databases

T1FF data are combined with employer T2 and T4 tax files obtained from the CRA in the Canadian Employer-Employee Dynamics Database (CEEDD). The CEEDD is a longitudinal database that integrates individual and company-level data. It covers individual tax filers and their families, employees who receive T4 slips, unincorporated businesses and corporations, as well as business owners who report self-employment income and owners of private corporations.

T1 and T4 tax files are also linked to generate the Longitudinal Employment Analysis Program (LEAP) and Longitudinal Worker File (LWF). Further, the T2 Longitudinal Employment Analysis Program (T2-LEAP) merges T2 records into the LEAP dataset.

Recently, the Education and Labour Market Longitudinal Platform (ELMLP) has been made available in the RDCs. ELMLP links three administrative datasets: the Registered Apprenticeship Information System (RAIS), the Postsecondary Student Information System (PSIS), and tax records from the T1 Family File.

Disambiguation

Wages and salaries information is collected for different purposes. At Statistics Canada, it is collected for labour statistics (SEPH, LFS), income statistics (T1FF, LAD, CIS, census) and the System of National Account’s (SNA) Estimates of Labour Income (ELI). Each division uses a slightly different methodology to tackle wages and salaries and related topics.

In the context of income statistics, employment income refers to the sum of wages, salaries and commissions from paid employment and net self-employment income (from farm or non-farm unincorporated business and/or professional practice) during the reference period. The sum of employment income, net self-employment income, investment income, private retirement income and other income from market sources is called market income.

In the context of SNA, labour income (also referred to as labour compensation) represents the income generated by producing goods and services accruing to workers. It is comprised of two components - wages and salaries, and supplementary labour income. Supplementary labour income includes employers’ contributions to private and public sector pension plans, Canada and Quebec pension plans, Employment Insurance (EI), workers’ compensation, health and life insurance plans, and retirement allowances.

Labour income and labour cost are two distinct but complementary concepts. They reflect the two main facets of employment-related income measures: the income of employees versus the cost of employing them.

International Standards

At the international level, four different concepts on wages and salaries have been adopted: labour cost (11th International Conference of Labour Statisticians, 1966), wages rates and earnings (12th International Conference of Labour Statisticians, 1973), compensation of employees (System of National Accounts, 1993), income related to paid employment and income related to self-employment (16th International Conference of Labour Statisticians, 1998).

 

Overview of Definitions and Sources

 

Primary Sources
SEPH Census LFS CIS T1FF LAD ELI
Frequency Monthly, two months after reference period Every five years Monthly, released 10 days after data collection Annual, released 14 months after the tax reference year Annual, released 18 months after the tax reference year Annual, released 21 months after the tax reference year Quarterly
Target Population All business with at least one employee Total population Population 15 years of age and over Total population excluding the three territories and Indian reserves Tax filers, spouses and children Tax filers, spouses and children Canadian population of working age
Coverage
  • All occupied positions

 

  • Excludes businesses in agriculture, fishing and trapping, private households, religious organizations, international public administration, and military personnel

 

  • Includes employees on parental leave, strike and lock-out
  • Individuals 15 years of age and over living in a private dwelling (for wages and salaries information)
  • Main job only

 

  • All industries, all provinces and territories

 

  • Includes employees on parental leave, strike and lock-out
  • Individuals 16 years of age and over living in a private dwelling (for wages and salaries information)
  • All individuals who filed their taxes in Canada)
  • Sample of all individuals who filed taxes in Canada
  • All occupied positions

 

  • Businesses in SEPH and administrative files

 

  • Includes employees on parental leave, strike and lock-out
Wages/ Salaries Output
  • Excludes contributions to pension plans, insurance (EI, etc.) and retirement allowances

 

  • Includes overtime and special payments

 

  • Before taxes and other deductions

 

  • Includes tips, commissions and bonuses
  • Excludes contributions to pension plans, insurance (EI, etc.), and retirement allowances

 

  • Includes overtime

 

  • Before taxes and other deductions

 

  • Includes tips, commissions and bonuses
  • Excludes contributions to pension plans, insurance (EI, etc.), and retirement allowances

 

  • Excludes overtime

 

  • Before taxes and other deductions

 

  • Includes tips, commissions and bonuses
  • Excludes contributions to pension plans, insurance (EI, etc.), and retirement allowances

Includes overtime

Before taxes and other deductions

Includes tips, commissions and bonuses

  • Contributions to pension plans, insurance (EI, etc.), and retirement allowances presented separately

 

  • Includes overtime

 

  • Before taxes and other deductions

 

  • Includes tips, commissions and bonuses
  • Excludes contributions to pension plans, insurance (EI, etc.), and retirement allowances

 

  • Includes overtime

 

  • Before taxes and other deductions

 

  • Includes tips, commissions and bonuses
  • Includes contributions to pension plans, insurance (EI, etc.), and retirement allowances

 

  • Before taxes and other deductions

 

  • Includes tips, commissions and bonuses
Sample Size
  • BPS: 15,000 establishments out of a population of one million

 

  • PD7 data: census of all payroll remittances
  • Full Canadian population
  • 100,000 individuals monthly (56,000 households)
  • In 2017, just over 97,000 individuals (just under 42,000 households)
  • Tax filers and dependants
  • About 20% of tax filers
N/A

 

Provincial Surveys

The Alberta Wage and Salary Survey is conducted every two to three years. The survey covers about 7,000 businesses in Alberta drawn from an InfoCanada business list stratified by industry and employer size using the Canadian Business Patterns. The survey covers private and public employers in Alberta – those with 10 or more employees in Calgary and Edmonton, and those with five or more employees in the other six survey regions. The survey collects information on hourly wages and annual salaries and is designed to be representative by occupation, industry and economic region.

The Saskatchewan Wage Survey covered about 7,000 businesses every two years between 2002 and 2013, after which time it was suspended with the introduction of the JVWS.

Private Sources

The Conference Board of Canada conducts an annual Compensation Planning Outlook survey that provides information on wage and salary trends in Canada.

Data Access

Statistics Canada

Data on wages can be found through different Statistics Canada programs, which can be accessed through different channels, each allowing for a different level of detail.

 

Data Tables Customized Products Public Use Microdata File (PUMF) Real Time Remote Access (RTRA) Research Data Centre (RDC) Canadian Centre for Data Development  and Economic Research (CDER)
Survey of Employment, Payrolls and Hours (SEPH) Several tabulations available Several tabulations available in accordance with confidentiality release criteria Not available Not available N/A Not available
Census of Population Several tabulations available Several tabulations available in accordance with confidentiality release criteria Available Not available Available upon request N/A
Labour Force Survey (LFS) Several tabulations available Several tabulations available in accordance with confidentiality release criteria Available (only usual hourly wages; employees) Available (usual hourly wages, usual weekly wages, and spouse’s hourly and weekly wages; rounded data) Available upon request N/A
Canadian Income Survey (CIS) Several tabulations available Several tabulations available in accordance with confidentiality release criteria Available Available (cost recovery) Available upon request N/A
T1 Family File (T1FF) Several tabulations available Several tabulations available in accordance with confidentiality release criteria Not available Not available Linked files containing T1FF data are available upon request N/A
Longitudinal Administrative Databank (LAD) Several tabulations available Custom tabulations available (suppression applied based on confidentiality rules) Not available Available (cost recovery) Available upon request N/A
Other Measures
Estimates of Labour Income Several tabulations available Several tabulations available by suppression rules Not available Not available Not available N/A
Canadian Productivity Accounts (PA)
Several tabulations available Not available Not available Not available Not available N/A

 

Note 1:

The T1FF database, safeguarded by Statistics Canada, cannot be accessed by researchers in the Statistics Canada Research Data Centres (RDC). However, researchers can submit a request where records from another data file (e.g. health data) can be linked to the T1FF (at cost recovery). The linked file can then be made accessible in the RDCs. Researchers may also access the Longitudinal Administrative Databank (LAD) in the RDCs. The LAD contains an anonymized random 20% subsample of T1FF data supplemented by a few other administrative data files. The anonymized data includes a longitudinal key that allows researchers to follow the income situation of the same individuals over time.

Other Sources

 

Data Access
Alberta Wage and Salary Survey Wage Info and Reports
Saskatchewan Wage Survey No longer available
Compensation Planning Outlook Survey Reports available for a fee

 

Applications

Wage information is crucial to labour and economic analysis. It is a key input in developing macroeconomic indicators and informing public policy; it is a core indicator of economic conditions.

Statistics Canada conducts several surveys and publishes several analytical tools to better understand wages and salaries, including reports (e.g. Annual wages, salaries and commissions of T1 tax filers) and data visualizations (e.g. Data visualization tool: Family income according to the T1FF by source income [including wages, salaries and commissions]).

The Bank of Canada calculates the wage-common metric. The wage-common is an index summarizing wage data from the average hourly earnings as reported in the LFS, the average hourly earnings from the SEPH, the compensation per hour from the Chartered Professional Accountants (CPA) of Canada, and the hourly wages and salaries from the national account. The earnings growth rate is used by the Bank as an indicator of future inflation; it can inform decisions about raising or lowering interest rates to keep inflation at its two percent goal.

The Canada Revenue Agency (CRA) uses SEPH data to revise the maximum pensionable earnings and retirement savings plan contribution limits.

Employment and Social Development Canada (ESDC) examines wages offered to the foreign worker when analyzing Labour Market Impact Assessment (LMIA) requests.

Private sector employers and unions use wage data for contract negotiations.

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