Wage terms


Main topics of this article are the definitions of wage terms as monthly earnings, estimated annual earnings etc.

Monthly earnings

Monthly earnings is the main term in the wage statistics. Monthly earnings include basic monthly salary, variable additional allowances and bonuses. Overtime pay is not included in monthly earnings.

Basic monthly salary

Basic monthly salary is the fixed amount that is paid, whether it is defined as an hourly, monthly, fortnightly or weekly wage. Basic monthly salary is the actual paid amount at the time of the survey, and is often described as salary on a scale or regular basic wage. Qualification/skills allowances and other regular personal allowances are included.

Estimated annual earnings

Estimated annual earnings assume 12 monthly payments in a year, and cover the three main components of monthly earnings; basic monthly salary, bonuses and variable additional allowances. Overtime pay relates to work performed outside normal working hours, and is not included in estimated annual earnings. Payment in kind, holiday pay, severance pay, redundancy pay and back pay are also not included.

The calculation of annual earnings is based on the following sources of information:

  1. Two years of annual wage statistics.
  2. Quarterly index for basic wages. This was established for the whole of the private sector, with the exception of fish farming and the finance industry. In the public sector, the index only covers the health enterprises.
  3. Institutional information (information on results from the wages settlement or other factors that affect salary levels in the year for which the annual earnings are calculated). This is used for industries and areas that are not covered in the quarterly wages index (cf. point 2).

Estimated annual earnings in an industry are equal to the sum of the basic monthly salary for each month of the year, plus the sum of the average bonuses and variable additional allowances per month. The development of the basic monthly salary during the year is determined by the wage index, while additions and bonuses remained unchanged every month throughout the year.

Variable additional allowances

Variable additional allowances are generally additions associated with special tasks or working hours, and the figure given is a calculated average per month for the period 1 January to the time of the survey.

Variable additional allowances also include an allowance for working unsocial hours, call-out allowance, shift allowance, dirty work allowance, offshore allowance and other allowances that are not paid on a regular basis.


This item includes allowances that do not usually relate to specific duties and where the payments are made irregularly as regards the period in which they are earned or to which they apply. Other types of bonuses include profit sharing, production allowance and gratuities. Bonuses are a calculated average per month for the period 1 October the previous year to the time of the survey. Information on the 4th quarter the year before is included in order to incorporate information over a period of a whole year. This is because the payments included here are often paid at irregular intervals, and because the earnings period can differ from the payment date.

Overtime pay

Overtime pay covers the sum of cash compensation for work performed beyond contractual working hours, and which is remunerated as an addition to the basic salary. Overtime pay is a calculated average per month over the period 1 January to the time of the survey. This type of payment is not included in monthly earnings, but overtime pay figures are given in statistics releases.