Concept selected: Gross annual earnings in the reference year
DefinitionGross annual earnings cover remuneration in cash and in kind paid during the reference year before any tax deductions and social-security contributions payable by wage earners and retained by the employer.
The main difference between annual and monthly earnings is that annual earnings are not only the sum of the direct remuneration, bonuses and allowances paid to an employee in each pay period. Annual earnings hence usually exceed the figure produced by multiplying the "standard monthly package" by 12.
The "standard monthly package" includes those bonuses and allowances which occur in every pay period, even if the amount for these "regular" bonuses and allowances varies, but excludes bonuses and allowances not occurring in every pay period. Furthermore, monthly earnings leave payments in kind out of consideration. However, annual earnings also cover all "non-standard payments", i.e. payments not occurring in each pay period (variable 4.1.1), and payments in kind (variable 4.1.2).
Data for variable 4.1 should be provided for all employees for whom gross monthly earnings (variable 4.2) can be supplied, i.e. variable 4.1 should not be provided for employees for whom an estimate of an employee¿s gross monthly earnings is not feasible. These employees will be excluded from the sample.
It does not matter if the employee¿s earnings do not always relate to a full year. Some employees will have periods of unpaid absence, or will have joined or left the enterprise during the year. The actual gross earnings in the reference year are required. When variable 3.1 (number of weeks to which the annual earnings relate) is less than 52 weeks, variable 3.1 will be used to gross up variable 4.1 and its components.
SourceCommission Regulation (EC) No 1738/2005 of 21 October 2005 amending Regulation (EC) No 1916/2000 as regards the definition and transmission of information on the structure of earnings More information
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