Breakdown of employees by income
Data on breakdown of employees are used to find out allocation of employees by income, economic activity and sector of the enterprise, administrative territories as well as sex and age of the employee.
Terms and definitions
Income includes all gross income calculated in salaried job from which income tax paid by employee is withheld (including non-taxable minimum, tax relieves, the eligible expenses for which the taxpayer has the right to reduce taxable income, statutory state social security contributions).
- wages and salaries,
- lump sum and systematic remuneration,
- remuneration for civil service,
- regular and irregular premiums and bonuses,
- holiday allowance,
- severance pay and other allowances,
- compensation for unused leave in a case of dismissal,
- illness benefit (sick list A),
- presents and prises total value of which in taxation year exceeds the value of minimum monthly wages and salaries,
- stipends paid by the employer,
- training paid by the employer not necessary for work duties,
- various events if it is possible to personify them – other payments or benefits received from employer if they are not directly related to economic activity of the employer or are not approved with source documents.
For employees average monthly income per year is calculated summing up income of all months of the year and dividing to the number of months worked.
All employees are arranged by their income in an ascending order, and successively divided into ten equal groups according to the number of employees. Each group includes 10% of all employees. Deciles are the highest income values of these groups.
The first decile shows that income of 10% of employees is less or equal to the highest value of the first decile. The second decile is equal to the highest income value of the second group. Similar approach is used for other deciles. The tenth decile is equal to highest income value of the tenth decile. Due to the fact that the tenth decile is equal to the highest value of income of all employees, the tenth decile is confidential and is not published. In turn the 5th decile at the same time is the median - half of the employees receive smaller or equal income to the value of the 5th decile, and the other half - greater or equal income to the value of the 5th decile. Usually the median value of employment income is smaller than the arithmetic mean value. The difference between the median and the arithmetic mean value shows the income distribution asymmetry. If the distribution was completely symmetrical, the median and the arithmetic average would be the same.
Employee [Wages and salaries]
- person who on the basis of labour contract does certain job under supervision of the employer and receives for this job agreed wage or salary;
- deputy of the Saeima, deputy of the local government, member of the Cabinet of Minsters, member of commercial company, council, managing clerk, controller;
- other person holding a post granting rights to receive remuneration;
- person who has concluded contractor, sharecropper or transportation agreement and has not registered as payer of the tax of income received form economic activity;
- officer of the Ministry of Interior system institutions and Latvian Prison Administration with special rank or militaries of the structural units under supervision of the Ministry of Defence;
- officer of the state civil service;
- authorized agent of the non-citizen of Latvia, which not having legal relations with this merchant represents the activities of the person related to the business branch of the merchant form foreign country.
Total number of employees includes also employees wages and salaries of which for the corresponding month were not calculated (e.g., childcare leave or unpaid leave was granted, maternity, paternity or sickness benefit was granted, as well as in accordance with the contractor agreement wage or salary is paid after the work is completed).
Number of employees does not include self-employed persons, who manage state social insurance payments by themselves, as well as domestic employees working for a foreign employer or foreign employees working for a foreign employer.
Private sector includes commercial companies with central or local government capital participation up to 50%, commercial companies of all types without central or local government capital participation, individual merchants, and peasant and fishermen farms with 50 and more employees.
Data collection and Statistical processing
Survey method and data source
Data on breakdown of employees by income were acquired by compiling employers reports submitted to the State Revenue Service:
- Reports on mandatory social insurance contributions made from labour income of employees, on personal income tax and business risk state fees in the reference month submitted by the employers to the State Revenue Service;
- reports regarding the employment income, personal income tax and state mandatory social insurance contributions of the payers of the income tax for seasonal farm workers;
- tax declarations of micro-enterprises.
All paid employees who must be reported to the State Revenue Service sending a statement on the compulsory social insurance contributions from the employee’s income, personal income tax and business risk state duty in the reporting month; or who are included in a micro-enterprise tax return and employed in commercial companies, agricultural holdings and fishermen’s farms, foundations, associations, funds, institutions, organisations, institutions as well as natural persons and sole proprietors.
When receiving administrative data from the State Revenue Service, arithmetical and logical controls of the source data are carried out, comparing them with the Statistical Business Register information and data on the previous month.
If some of the indicators in administrative data are missing or are incorrect, necessary corrections are made basing on the administrative data on the particular enterprise regarding previous month
Data are processed and developed in a way ensuring that each employee is included in the database once, summing earnings gained in all jobs. Employee is registered with the enterprise bringing the highest earnings. Number of employees includes all employees, wages and salaries of which were calculated during the reference period, regardless the number of hours worked.
Data are supplemented with the necessary information from the Statistical Business Register; age is calculated from the identity code, gender is added from the Population Register. Processed data in corresponding wage groups are grouped by economic activity and sector of the enterprise, administrative territories as well as by sex and age of the person.
The average number of employees per year, broken down by income group, has been calculated as the arithmetic average by summing the data for each month and dividing the result by 12.
Data are compiled, calculated and published by using:
- Statistical Classification of Economic Activities in the European Community, Rev. 2 (NACE Rev. 2);
- Classification of Administrative Territories and Territorial Units of the Republic of Latvia (CATTU).