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Commission Regulation (EC) No 1726/1999Show full title

Commission Regulation (EC) No 1726/1999 of 27 July 1999 Implementing Council Regulation (EC) No 530/1999OJ L 63, 12.3.1999, p. 6. concerning structural statistics on earnings and on labour costs as regards the definition and transmission of information on labour costs

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Changes over time for: Division D.1

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Version Superseded: 31/12/2020

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Point in time view as at 01/01/2008.

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There are currently no known outstanding effects for the Commission Regulation (EC) No 1726/1999, Division D.1 . Help about Changes to Legislation

[F1D.1 Compensation of employees U.K.

Compensation of employees is defined as the total remuneration, in cash or in kind, payable by an employer to an employee in return for work done by the latter during the reference period. It is broken down into:

  • wages and salaries (D.11), mainly consisting of wages and salaries (excluding apprentices) (D.111) and wages and salaries of apprentices (D.112)

  • employers' social contributions (D.12), mainly consisting of employers' actual social contributions (excluding apprentices) (D.121), employers' imputed social contributions (excluding apprentices) (D.122) and employers' social contributions for apprentices (D.123).

References ESA 95: 4.02 (code D.1), SBS: code 13310 (personnel costs) U.K.

D.11 Wages and salaries U.K.

Wages and salaries include bonuses, pay for piecework and shift work, allowances, fees, tips and gratuities, commission and remuneration in kind. They are recorded in the period during which the work is done. However, ad hoc bonuses or other exceptional payments (13 th month pay, back-dated pay arrears, etc.) are recorded when they are due to be paid.

A full breakdown of wages and salaries by component is given in Figure 2 in Annex I.

References ESA 95: 4.03 to 4.07 and 4.12(a) (code D.11); SBS: code 13320 (wages and salaries) U.K.

D.111 Wages and salaries (excluding apprentices) U.K.
D.1111 Direct remuneration, bonuses and allowances U.K.

Direct remuneration, bonuses and allowances include the values of any social contributions, income taxes, etc., payable by the employee even if they are actually withheld by the employer and paid directly to social-insurance schemes, tax authorities etc. on behalf of the employee.

A bonus is a form of reward or recognition granted by an employer. When an employee receives a bonus payment, there is no expectation or assumption that the bonus will be used to cover any specific expense. The value and timing of a bonus payment can be at the discretion of the employer or stipulated in workplace agreements.

An allowance is an entitlement granted by the employer to an employee and intended to cover a specific expense, not work-related, incurred by the employee. It is often stipulated in workplace agreements and is normally paid at the time of entitlement.

D.11111 Direct remuneration, bonuses and allowances paid in each pay period U.K.

This means remuneration in the form of regular cash payments paid regularly at each pay period during the year. For most employees, the pay period is weekly or monthly. Hence, payments received less frequently (monthly in the case of weekly regular payments, quarterly, bi-annually, annually) or on an ad hoc basis should not be included here. Payments to employees’ savings schemes should be excluded here and are to be included under D.1112.

Specifically, the variable refers to:

  • basic wages and salaries,

  • direct remuneration calculated on the basis of time worked, output or piecework and paid to employees for hours worked,

  • remuneration and additional payments for overtime, night work, working on Sundays and public holidays, and shift work,

  • bonuses and allowances paid regularly at each pay period, such as:

    • workplace bonuses for noise, risk, difficult work, shift or continuous work, night work and working on Sundays and public holidays,

    • individual performance bonuses, bonuses for output, production, productivity, responsibility, diligence, punctuality; regularly paid length-of-service bonuses; qualifications and special knowledge.

Further examples of pay items which should be included here are given in the Appendix to Annex II.

Variable D.11111 refers to gross amounts before deduction of taxes and social-security contributions payable by employees.

D.11112 Direct remuneration, bonuses and allowances not paid in each pay period U.K.

All payments to employees which are not paid regularly at each (weekly or monthly) pay period. These include bonuses and allowances paid at fixed periods (e.g. paid monthly where regular payments are weekly, or paid quarterly, bi-annually or annually), and bonuses linked to individual or collective performance. Exceptional payments to employees who leave the enterprise are included here, provided that such payments are not linked to a collective agreement. If no information about a possible linkage with a collective agreement is available or if it is known that such a linkage exists, exceptional leave payments are excluded here and should be included under D.1223. Payments to employees’ savings schemes are also excluded and covered by D.1112.

Examples of pay items belonging to D.11112 are listed in the Appendix to Annex II.

Variable D.11112 likewise refers to gross amounts before deduction of taxes and social-security contributions payable by employees.

D.1112 Payments to employees' savings schemes U.K.

This refers to sums paid into savings schemes for employees (such as company savings schemes).

Reference ESA 95: 4.03(i) U.K.

D.1113 Payments for days not worked U.K.

Remuneration paid for statutory, contractual or voluntarily granted leave and public holidays or other paid days not worked. The Appendix to Annex II provides examples.

D.1114 Wages and salaries in kind U.K.

This variable refers to an estimate of the value of all goods and services made available to employees through the enterprise or local unit. It includes company products, staff housing, company cars, stock options and share purchase schemes. If information is available on personal income taxation on wages and salaries in kind, this could be used as a proxy.

The Appendix to Annex II gives examples of wages and salaries in kind.

Reference ESA 95: 4.04, 4.05, 4.06 (code D.11) U.K.

D.11141 Company products U.K.

These are supplied free of charge for private use or sold to staff below their cost to the enterprise. For example, food and drink (excluding expenditure on canteens and meal vouchers), coal, gas, electricity, fuel oil, heating, footwear and clothing (excluding working clothes), micro-computers, etc.

The net price to the enterprise should be entered, i.e. the cost of products supplied free of charge or the difference between the cost and the price at which the products are sold to staff. Compensatory payments or benefits in kind which are not taken up must also be entered.

D.11142 Staff housing U.K.

This refers to expenditure by the enterprise to assist employees with housing, including: expenditure on housing owned by the enterprise (expenditure on the maintenance and administration of housing, and tax and insurance relating to such housing) and reduced-interest loans for the construction or purchase of housing by staff (the difference between the interest payment at market rates and at the rate granted), allowances and subsidies granted to employees in connection with their housing, and installation, but excluding removal allowances.

D.11143 Company cars U.K.

Company cars, or the cost to the enterprise of company cars supplied to employees for their private use. This should include the net running costs incurred by the enterprise (the annual cost of leasing and interest payments – depreciation, insurance, maintenance and repairs and parking). It should not include the capital expenditure involved in purchasing the vehicles or any income derived from their resale.

Estimates should be calculated from information available in the enterprises, such as records of the fleet of vehicles of this type, the assessment of the average cost per vehicle, and the estimate of the proportion attributable to the private use of the vehicle by the employee.

D.11144 Stock options and share purchase schemes U.K.

This optional variable refers to all forms of payments in kind linked to share-based compensation. Stock options, share purchase schemes and other equity instruments possibly evolving in the future belong to this category. A typical feature of such instruments is that they are equity-settled, i.e. they represent a transfer of equity instruments from the enterprise/local unit to the employee. The forms of compensation covered by D11144 are identical to those covered by the heading Equity-settled share-based payment transactions of the International Financial Reporting Standard 2 Share-based payment .

Share purchase schemes typically transfer shares from the employing enterprise to employees. The transfer takes place in the present (grant date) and is based on a price below today’s market price (the strike price ). The costs to the enterprise are equivalent to the product of the amount of shares and the difference between the market price and the strike price .

Stock options schemes typically transfer the right to buy the employing enterprise's shares not before a well-defined point of time in the future (vesting date) to a favourable strike price already fixed in the present (grant date). Employees will make use of this right only if the market price on or after the vesting date exceeds the strike price . The costs to the enterprise are again equivalent to the product of the amount of shares and the difference between the market price and the strike price . In both labour costs statistics and accounting, the costs are assigned to and distributed over the vesting period , which is the period between the grant date and the vesting date. These values are uncertain during the vesting period and therefore have to be estimated.

An estimate of the variable D.11144 for the reference year could ideally be arrived at with the help of guidelines from International Financial Reporting Standard 2, Share-based payment . If such an estimate is not available, values according to accounting standards or the tax regulation of the Member State can be taken, provided that they cover the equity instruments of D.11144 and refer to the Labour Cost Survey reference period.

Payments made to set up a special fund for purchasing company shares for employees, even if they do not have immediate access to such assets, must be reduced by the amount of any tax exemption which might apply to them. Cash-settled share-based compensation such as stock-appreciation rights are covered not by variable D.11144, but by D.11112.

D.11145 Other U.K.

This covers in particular indirect benefits chargeable to the employer:

  • canteens and meal vouchers,

  • cultural, sporting and leisure facilities and services,

  • kindergartens and day nurseries,

  • staff shops,

  • transport costs for journeys between home and the usual place of work,

  • payments into trade union funds and the costs of works committees.

All such expenditure includes small repairs and regular maintenance of buildings and installations devoted to social, cultural or leisure services and facilities as listed above. Salaries and wages paid by the enterprise directly to staff working in these services and facilities are not entered under the heading of variable D.11145.

D.112 Wages and salaries of apprentices U.K.

See D.11.

D.12 Employers' social contributions U.K.

This variable refers to an amount equal to the value of the social contributions incurred by employers in order to secure for their employees the entitlement to social benefits. Employers' social contributions may be either actual or imputed.

A full breakdown of employer’s social contributions by component is provided by Figure 3 in Annex I.

References ESA 95: 4.08 (code D.12); SBS: code 13330 (social-security costs) U.K.

D.121 Employers' actual social contributions (excluding apprentices) U.K.

These consist of payments made by employers for the benefit of their employees to insurers (social-security funds and private funded schemes such as occupational-pension schemes). These payments cover statutory, conventional, contractual and voluntary contributions in respect of insurance against social risks or needs. Employers' actual social contributions are recorded in the period during which the work is done.

Examples are given in the Appendix to Annex II.

Reference ESA 95: 4.09 (code D.121) and 4.12(b) U.K.

D.1211 Statutory social-security contributions U.K.

Contributions paid to social-security institutions payable by the employer and made compulsory by law. The amounts of such contributions must be entered net of any subsidies. They include:

  • contributions to insurance schemes for retirement pension, sickness, maternity and disability,

  • statutory contributions to unemployment insurance schemes,

  • statutory contributions to insurance schemes for occupational accidents and diseases,

  • statutory contributions to family allowance schemes,

  • all other statutory contributions not mentioned elsewhere.

D.1212 Collectively agreed, contractual and voluntary social-security contributions payable by the employer U.K.

These are all contributions paid by the employer to social-security schemes which are supplementary to those which are compulsory by law. Account should be taken of any tax exemptions which might apply. They include:

  • supplementary pension schemes, occupational pension schemes (insured plans, self-administered funds, book reserves or provisions, all other expenditure intended to fund supplementary pension schemes),

  • supplementary sickness insurance schemes,

  • supplementary unemployment insurance schemes,

  • all other non-compulsory supplementary social-security schemes not mentioned elsewhere.

D.122 Employers’ imputed social contributions (excluding apprentices) U.K.

Employers' imputed social contributions are needed in order to get a complete measure of labour costs at the time the work is done. They represent the counterpart to the observable unfunded social benefits paid.

Unfunded social benefits are paid directly by employers to their employees or former employees and other eligible persons without involving a social-security fund, an insurance enterprise or an autonomous pension fund, and without creating a special fund or segregated reserve for the purpose. Instead, the benefits are paid out of the own resources of the employers that operate unfunded schemes. The fact that certain social benefits are paid directly by employers, and not through the medium of social-security funds or other insurers, in no way detracts from their character as social welfare benefits. D.122 may be particularly relevant when the employer is a non-market producer (government sector).

The amount of D.122 is determined by reference to the employers’ future obligations to provide social benefits. The ideal source for calculating D.122 for employers operating unfunded social-insurance schemes are estimates based on actuarial considerations. If such actuarial estimates are not available, other estimation methods should be applied. Some countries, for example, use the observable unfunded social benefits paid, less eventual employees' social contributions, as an estimate for D.122.

Variable D.122 includes in particular imputed employers’ social contributions for pensions and health care. It also includes an amount equal in value to the wages and salaries which employers temporarily continue to pay in the event of sickness, maternity, industrial injury, disability, redundancy, etc. of their employees, if that amount can be separated.

Examples are given in the Appendix to Annex II.

Reference ESA 95: 4.10 (code D.122) and 4.12(c) U.K.

D.1221 Guaranteed remuneration in the event of sickness U.K.

This variable covers sums paid directly by the employer to employees to maintain remuneration in the event of sickness, maternity or occupational accident to compensate for loss of earnings, minus any reimbursements paid by social-security institutions.

D.1222 Employers' imputed social contributions for pensions and health care U.K.

This component of D.122 covers imputed payments to unfunded pension and health care schemes, in particular in the government sector. In some European countries, employers in the general government sector operate unfunded pension schemes either for all employees or for specific groups (officials). In these cases, the employer does not create special reserves or accumulate assets to pay future pensions. For these employees, imputed employers’ payments to pension and health-care schemes must be taken into account.

D.1223 Payments to employees leaving the enterprise U.K.

This component represents sums actually paid to dismissed workers (severance pay and compensation in lieu of notice) if these payments are linked to a collective agreement or if the existence of such a linkage is unknown. Payments not linked to a collective agreement are included in D.11112.

Payments made to employees on retirement, e.g. as part of their pension entitlement, should not be included in D.1223.

D.1224 Other imputed social contributions U.K.

This item refers to all other imputed social contributions of the employer not mentioned elsewhere, such as study grants for employees and their families or guaranteed remuneration in the event of short-time working. The latter is defined as direct payments of the employer to employees to maintain remuneration in the event of short-time working minus any reimbursements paid to the employer by social-security institutions.

D.123 Employers’ social contributions for apprentices U.K.

This variable is the sum of contributions actually paid and any imputed contributions for apprentices. Imputed social contributions for apprentices, if any, are usually tiny.

Reference ESA 95: 4.09 (code D.121), 4.10 (code D.122) and 4.12(b)] U.K.

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