Labour cost survey: documentation of statistics
The documentation of the statistics describes how the statistics were compiled and what methods were used in the compilation. The data help interpret the figures of the statistics and evaluate their reliability and comparability. The quality report is based on the EU's SIMS model. The documentation also contains change releases describing changes in the statistics and possible specifying methodological descriptions.
If you are looking for statistical figures for these statistics, go to the statistics page: Labour cost survey
Quality report
Data description (SIMS 3.1)
The labour cost survey describes the level and structure of labour costs at fixed intervals of years. The statistics cover nearly the entire private sector, central government sector and local government sector. The data are collected and published around every four years.
Sector coverage (SIMS 3.3)
The statistics cover all enterprises with more than nine employees, all on-budget employer agencies, and all municipalities and joint municipal authorities. Agriculture, forestry and fishery are excluded from the statistics.
Statistical unit (SIMS 3.5)
The statistical unit is an enterprise. Most of the enterprise-level wage and salary cost data are based on the enterprise-specific data of the quarterly labour cost index, and the municipality and sector-specific data in the public sector. Enterprise-specific data are supplemented by individual-level data of the structure of earnings statistics, which include data on enterprises with 20/30 or fewer employees. Data on enterprises with more than 20/30 employees can be obtained from the labour cost index. All data concerning the central government sector are obtained from the TAHTI register maintained by the State Treasury.
Data on the labour input of wage and salary earners of an enterprise are based on the enterprise-specific data of the labour cost index, as well as on the individual-level data of the structure of earnings statistics. An essential part of the calculation of the labour input data is the modelling of the structure of working hours (mutual shares of hours worked and absences) on the basis of the labour force survey data. The resulting model is then combined with the individual-level data of the structure of earnings statistics.
Data other than those relating to the wages and salaries sum and to the labour input are obtained from other Statistics Finland’s data sets and administrative registers. Such data include social contributions, occupational healthcare costs, sickness allowances received by employers and other compensations. Data on the training costs of enterprises and municipalities and non-taxable benefits in kind are collected in connection with the data collection for the labour cost index.
Statistical population (SIMS 3.6)
LCS applies to all activities in sections B to S of NACE Rev.2 and represents all statistical units occupying 10 and more employees, as well as the central and local government sectors.
Reference area (SIMS 3.7)
The statistics cover almost the whole private sector, as well as the central and local government sectors. Agriculture, forestry and fishery are excluded from the statistics. Geographically, the statistics cover the whole of Finland.
Time coverage (SIMS 3.8)
The LCS is released every fourth year. The LCS was published in 1996 for the first time covering only some of the NACE sectors. Since 2008 it has covered all sectors - private with more 10 employees, local and central government.
Unit of measure (SIMS 4)
The units of measure used in the labour cost survey are EUR per hour worked, EUR per staff-year, hours worked per staff-year and percentages (shares of different labour cost items of total labour costs).
Reference period (SIMS 5)
The reference period of the labour cost survey is one year. The previous reference year was 2020, and the next will be 2024. The survey is completed approximately 18 months after the end of the survey year.
Concepts and definitions (SIMS 3.4)
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. 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. ------ 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
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
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.
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
Institutional mandate (SIMS 6)
The compilation of statistics is guided by the Statistics Act. The Statistics Act contains provisions on collection of data, processing of data and the obligation to provide data. Besides the Statistics Act, the General Data Protection Regulation, the Data Protection Act and the Act on the Openness of Government Activities are applied to processing of data when producing statistics.
Statistics Finland compiles statistics in line with the EU’s regulations applicable to statistics, which steer the statistical agencies of all EU Member States.
Further information: Statistical legislation
Legal acts and other agreements (SIMS 6.1)
The compilation of statistics is guided by the Statistics Act. The Statistics Act contains provisions on collection of data, processing of data and the obligation to provide data. Besides the Statistics Act, the Data Protection Act and the Act on the Openness of Government Activities are applied to processing of data when producing statistics.
Statistics Finland compiles statistics in line with the EU’s regulations applicable to statistics, which steer the statistical agencies of all EU Member States.
Further information: Statistical legislation
Data sharing (SIMS 6.2)
The data are transmitted to Eurostat.
Source data (SIMS 18.1)
The main source of the LCS are:
- Labour cost index survey (LCI) – For information on wages and salaries and either paid or worked hours for enterprises with more than 20/30 employees
- Structure of earnings statistics (SES) – For information on wages and salaries and paid hours for enterprises with less than 20/30 employees
- Labour force survey (LFS) – For information on structure of working hours and different types of absences
In addition to these surveys, a number of other statistics and register data was used. These data give information on social costs, vocational training costs and subsidies received by the employer as well as supplementary information for wages, salaries and working hours. The vocational training costs for enterprises and local government sector an additional variable was added to the LCI questionnaire.
Frequency of data collection (SIMS 18.2)
The labour cost index data are collected quarterly, the structure of earnings statistics annually, and the labour force survey data monthly. Central government data are collected once a month and other administrative data on a continuous monthly basis (social contributions, costs of occupational healthcare, and sickness allowance and other reimbursements received by employers).
Data validation (SIMS 18.4)
All queries used in the labour cost survey go through the validation and quality control process. In the labour cost survey process, several variables are examined separately, such as the number of employees, which is derived from the quarterly statistics on labour costs. It asks about the number of employees four times a year for each statistical reference period. In enterprises with no standard number of employees or with a high variation in the number of employees, the annual average is not a good estimate. For enterprises included both in the structure of earnings survey and in the labour cost index, the number of employees is therefore adjusted using the “paid working time per employee” data item in the structure of earnings statistics.
Data compilation (SIMS 18.5)
SQL procedures and SAS Enterprise Guide projects are applied in the labour cost survey production process. Only those variables and observations which pass the checks (validation and quality assessment criteria) carried out in the process are accepted in the final data.
Measurement error (SIMS 13.3.2)
The LCS production includes combining individual level data as well as enterprise level data. The most relevant variables subject to processing errors are the amount of hours worked, paid and absent. In the production process of Finnish LCS, the hours are estimated through a combination of responses in labour cost index, data in structure of earning statistics and labour force survey.
Non-response error (SIMS 13.3.3)
Each survey contributing to LCS is subject to non-response error. In LCS, it is assumed that the non-response in the main contributing surveys, in LCI and SES, is randomly distributed such that the non-respondents do not differ from respondents in terms of survey variables. The correction coefficients for LCS are calculated by taking an inverse of the ratio of wages and salaries sum of the respondents and wages and salaries sum in the population by industry and size classes.
Model assumption error (SIMS 13.3.5)
The main data source, LCI, contains survey data of either paid or worked hours reported by enterprise. For hourly-paid employees the data of labour input is always bound to concern hours worked. In the case of monthly-paid workers the labour input is either hours worked or hours paid, depending on respondents’ choice.
The missing data of hour of absence, sick leave, paid holiday and other paid leave is imputed for enterprises. The imputation method involves a regression imputation that uses LFS data to model working time. The estimates of working time are imputed on individual level data of SES and the individuals are then aggregated to enterprise level.
Modelling the working time from LFS has some challenges, mostly concerning how to restrict the LFS data when modelling and the question of how well the population of LFS corresponds to the population in SES.
The working time structure is imputed into SES data for every employment, taking advantage of background information such as employees’ occupation, age, sex and working experience. After imputation of the working time, the SES data is aggregated into enterprise level and the amount of paid hours, holidays, sickness and maternity leave and other paid holidays are calculated for each enterprise.
There are three types of enterprises in the data:
1) enterprises of which there is information in both LCI and SES,
2) enterprises of which there is information only in LCI and
3) enterprises of which there is information only in SES
In the first case, the structure of working time that is imputed in SES is used to calculate hours of absence and hours paid or hours worked on the basis of the reported hours in LCI. In the second case, the average structure of working time (on NACE 2-digit level) is used to impute the missing hours into LCI data. In the third case, the imputed absent hours and worked hours are used.
Quality assurance (SIMS 11.1)
Quality management requires comprehensive guidance of activities. The European Statistics Code of Practice forms the basis for the common quality system of the European Statistical System.
The Code of Practice is based on 16 principles that concern statistical authorities' independence, accountability and the quality of the processes and data to be published.
The principles are in line with the Fundamental Principles of Official Statistics approved by the United Nations Statistics Commission and are supplementary to them. The quality criteria of Official Statistics of Finland are compatible with the European Statistics Code of Practice.
Further information: European Statistics Code of Practice | Statistics Finland and Recommendations of the Advisory Board of Official Statistics of Finland | Statistics Finland
Data revision - policy (SIMS 17.1)
Revisions – i.e. improvements in the accuracy of statistical data already published – are a normal feature of statistical production and result in improved quality of statistics. The principle is that statistical data are based on the best available data and information concerning the statistical phenomenon. On the other hand, the revisions are communicated as transparently as possible in advance. Advance communication ensures that the users can prepare for the data revisions.
The reason why data in statistical releases become revised is often caused by the data becoming supplemented. Then the new, revised statistical figure is based on a wider information basis and describes the phenomenon more accurately than before.
Revisions of statistical data may also be caused by the calculation method used, such as annual benchmarking or updating of weight structures. Changes of base years and used classifications may also cause revisions to data.
Timeliness (SIMS 14.1)
The data are produced within the specified period, i.e. 18 months after the end of the reference year.
Punctuality (SIMS 14.2)
So far, the data have been transmitted to Eurostat according to the schedule (within 18 months after the end of the reference year).
Comparability - geographical (SIMS 15.1)
The data describe the whole of Finland by industry, except for Åland, for which the required number of observations could not be obtained.
Comparability - over time (SIMS 15.2)
Differing from previous years, the LCS 2012 was implemented on the basis of existing sources and not by a survey questionnaire as before. This could cause difficulties in comparison of the LCS 2012 with the previous years. The LCS 2016 and 2020 was implemented with similar production model, so comparison between 2012, 2016 and 2020 should be less uncertain.
In the surveys before 2012 the values of benefits in-kind were asked from the respondents. In the LCS 2012 and 2016 the benefits in-kind are taken from tax register and are thus taxable values and 2020 from Incomes Register. Untaxable benefits in-kind where asked in extra questions at LCI inquiry 2016 and 2020 to get all the costs of benefits in-kind. Differing from the earlier years, the taxable values of stock options are included in labour costs from 2012. The holiday remunerations in LCS 2012, 2016 and 2020 are included in one-off items, whereas previously they were classified as wages and salaries for days off. Severance payments are also classified as one-off items whereas before LCS 2012 they were classified as social costs.
Release calendar (SIMS 8.1)
Statistics Finland publishes new statistical data at 8 am on weekdays in its web service. The release times of statistics are given in advance in the release calendar available in the web service. The data become public after they have been updated in the web service.
Further information: Publication principles for statistics at Statistics Finland
Release calendar access (SIMS 8.2)
Statistics Finland's release calendar Future publications
Future publications of the statistics can be found on the page of the statistics at: Labour cost survey - Statistics Finland
User access (SIMS 8.3)
The data are released to all users at the same time. Statistical data may be processed at Statistics Finland and information on them may be given before release only by persons involved in the production of the statistics concerned or who need the data of the statistics concerned in their own work before the data are published.
Further information: Publication principles for statistics
Unless otherwise specifically stated in connection with the product, data or service concerned, Statistics Finland is the producer and copyright owner of the data. The terms of use for statistical data.
Frequency of dissemination (SIMS 9)
The labour cost survey data are published every four years on Statistics Finland’s website. The statistics will not be revised at a later stage.
News release (SIMS 10.1)
The release is published every four years on Labour cost survey - Statistics Finland.
Online database (SIMS 10.3)
The database tables of the statistics can be found in the StatFin database.
Confidentiality - policy (SIMS 7.1)
The data protection of data collected for statistical purposes is guaranteed. The compilation of statistics is guided by the Statistics Act. Alongside the Statistics Act, the EU’s General Data Protection Regulation and the Finnish Data Protection Act are applied to the processing of personal data. Provisions on the confidentiality of data collected for statistical purposes are laid down in the Act on the Openness of Government Activities.
The data are processed only by persons who need the data in their work. The use of data is restricted by usage rights. All persons employed by Statistics Finland have signed a pledge of secrecy, where they have obliged to keep secret the data prescribed as confidential by virtue of the Statistics Act or the Act on the Openness of Government Activities.
Further information: Data protection | Statistics Finland (stat.fi)
Confidentiality - data treatment (SIMS 7.2)
A key rule of data protection is to avoid publishing statistical data in a form that could reveal the identity of an individual or organisation or an attribute relating to them. The data of enterprises, local governments/joint municipal authorities, or central government agencies or institutions are not available in the public domain; only industry-specific figures are published.