Income Research Paper Series
Annual wages, salaries and commissions of T1 tax filers, 2017

Introduction

In 2017, the largest income source for the majority of tax filers in Canada is “wages, salaries and commissions”,^Note  which are gained from being an employee (see Data sources, methods and definitions). This income source accounted for approximately two out of three dollars of annual income of tax filers. Understanding the characteristics of wage-earners^Note  and the differences in annual earnings by province, sex, age and industry can help to describe how the Canadian population interacts with the labour market.

Annual wage-earnings is one of many key variables for exploring differences in the economic situation of men and women and different generations within the Canadian workforce. For example, a higher proportion of men are wage-earners, regardless of age group (70.0% of tax filing men, compared with 61.9% of tax filing women), and women had a lower annual median income from wage-earnings than men ($31,340 and $43,690, respectively). Comparing annual wage-earnings across industry sectors, as well as between the provinces or territories, also allows for the description of different situations.

This paper uses the version of the T1 Family File (T1FF) for 2017 that is based on the preliminary databases from the T1 Income Tax and Benefit Return and T4 Statement of Remuneration Paid files that Statistics Canada receives from the Canada Revenue Agency^Note . It provides an overview of annual income from wage-earnings according to selected characteristics. The target population for the analysis is tax filers with wages, salaries and commissions, corresponding to approximately 17.6 million individuals. This target excludes tax filers below the age of 15 years (as of December 31 of the tax year), tax fillers that are only self-employed, tax filers who died during the tax year and tax filers who provided a mailing address outside Canada. To allow for comparison, the preliminary T1FF data for 2015 and 2016 will also be used.^Note  The intent is to publish data tables on wages, salaries and commission on an annual basis in future years using preliminary T1FF data. Because of the nature of tax information, the analysis focusses on all wage-earnings gained from one or many employers in a calendar year and does not take into account employment characteristics that are often used in other studies. For example, it is not possible to draw conclusions according to hourly wage rates, full-time or part-time status of employees, or full-year or part-year employment.

Year-over-year differences for 2015, 2016 and 2017 were small

The median annual wage-earnings was $36,980 in 2017, up less than one percent from 2016. Only slight fluctuations in the median annual wage-earnings of individuals were observed over the last three years: $36,740 for 2015, $36,630 for 2016 and $36,980 for 2017.

The median annual wage-earnings of women represented 71.7% of wage-earnings of men, the gap being the largest among the age groups from 35 to 54 years

The 2017 median wage-earnings was highest among wage-earners aged 35 to 44 years ($50,470) and 45 to 54 years ($52,820). As shown in Chart 1, it was lowest among the youngest and two oldest age groups ($12,000 for wage-earners aged 15 to 24 years, $11,500 for those aged 65 to 74 years and $460 for those aged 75 years and older).

In general, women had lower median wage-earnings than men ($31,340 and $43,690, respectively). This gap was largest among the groups aged 35 to 44 years ($19,030) and 45 to 54 years ($19,070). It was smallest among the youngest and two oldest age groups ($2,450 for wage-earners aged 15 to 24 years, $1,720 for those aged 65 to 74 years and $80 for those aged 75 years and older). According to Patterson (2018) and Moyser (2017), women were more likely to work part time, largely as a result of caring for children, especially among women aged 30 to 39 years. Moyser also identified that women were more likely to have more frequent career interruptions and for a longer total length and be underrepresented in leadership positions in the private sector. From 2015 to 2017, in constant dollars, men had nearly no gains in median wage-earnings (from $43,680 to $43,690), while women had a slight gain (from $30,850 to $31,340).

Men were more likely to have wage-earnings than women (70.0% of tax filing men, compared with 61.9% of tax filing women).^Note  This gap was largest among the group aged 65 to 74 years (34.9% of tax filing men, compared with 23.1% of tax filing women) and smallest among the groups aged 15 to 24 years (86.2% of tax filing men, compared with 85.9% of tax filing women) and 45 to 54 years (80.7% of tax filing men, compared with 77.4% of tax filing women).

Data table for Chart 1



Data table for Chart 1
Table summary
This table displays the results of Data table for Chart 1. The information is grouped by Age (appearing as row headers), Both Sexes, Men and Women, calculated using dollars units of measure (appearing as column headers).

Age	Both Sexes	Men	Women
	dollars
All ages	36,980	43,690	31,340
15 to 24 years	12,000	13,380	10,930
25 to 34 years	38,130	44,560	32,330
35 to 44 years	50,470	60,760	41,730
45 to 54 years	52,820	63,370	44,300
55 to 64 years	42,080	50,380	35,580
65 to 74 years	11,500	12,270	10,550
75 years and older	460	510	430
Source: Statistics Canada, Income Statistics Division, Preliminary T1 Family Files 2017, Custom Tabulation.

The territories generally had greater wage distribution than the provinces

Among provinces and territories, the Northwest Territories ($51,680), Yukon ($46,220) and Alberta ($44,470) had the highest median wage-earnings in 2017 (see Chart 2). The Maritime provinces ($28,870 for Prince Edward Island, $31,430 for New Brunswick and $32,110 for Nova Scotia) and Nunavut ($30,690) had the lowest. The Northwest Territories, Yukon and Alberta also had the highest medians in 2015 and 2016. Alberta had a small rebound from 2016 to 2017 ($330), after a large drop from 2015 to 2016 (-$2,030).

The interquartile range, the difference between the 25th and 75th percentiles of wage-earnings, helps describe the heterogeneity of wage-earnings within regions or industries. While Nunavut was among the provinces and territories with the lowest median wage-earnings in Canada, it had one of the largest interquartile range of wage-earnings, along with the Northwest Territories (the difference being $79,180 and $80,190, respectively). Nova Scotia, Prince Edward Island and New Brunswick, which had among the lowest medians, also had the smallest interquartile ranges of wage-earnings (the ranges of differences were between $39,290 and $44,320).

Alberta's wage-earners ($155,500) had the highest value for the 95th percentile of earnings, followed by Northwest Territories ($150,100) and Nunavut ($143,640). Five other provinces and territories (Newfoundland and Labrador, Ontario, Saskatchewan, British Columbia and Yukon) had wage-earning values at the 95th percentile greater than $120,000.

The territories had the largest proportion of tax filers with wage-earnings during the year (78.0% for Yukon, 80.8% for the Northwest Territories and 81.4% for Nunavut). ^Note  Nova Scotia (63.2%), Newfoundland and Labrador (63.5%), and New Brunswick (64.3%) had the lowest proportion of tax filers with wage-earnings.

Data table for Chart 2



Data table for Chart 2
Table summary
This table displays the results of Data table for Chart 2. The information is grouped by Province/territory (appearing as row headers), 25th percentile, Difference between 25th percentile and 50th percentile, Difference between 50th percentile and 75th percentile and Difference between 75th percentile and 95th percentile, calculated using dollars units of measure (appearing as column headers).

Province/territory	25th percentile	Difference between 25th percentile and 50th percentile	Difference between 50th percentile and 75th percentile	Difference between 75th percentile and 95th percentile
	dollars
Canada	14,630	22,350	28,600	59,140
Northwest Territories	16,410	35,270	44,920	53,500
Yukon	19,570	26,650	31,270	46,970
Alberta	18,490	25,980	34,690	76,340
Saskatchewan	16,210	23,370	29,600	55,930
Ontario	14,300	23,660	30,060	60,440
Manitoba	15,730	20,460	24,970	49,010
British Columbia	12,810	22,490	28,800	59,030
Quebec	14,710	20,270	24,150	49,330
Nunavut	11,940	20,350	32,060	63,490
Newfoundland and Labrador	12,970	19,140	25,180	47,890
Nova Scotia	14,110	17,320	23,710	46,860
New Brunswick	8,130	22,560	56,620	56,330
Prince Edward Island	12,610	16,260	23,030	42,900
Note: The provinces/territories have been sorted, in decending order, by median wage-earnings. Source: Statistics Canada, Income Statistics Division, Preliminary T1 Family File 2017, Custom Tabulation.

The “mining, quarrying, and oil and gas extraction” and “utilities” industries had the highest wage-earnings

This section focusses on all wage-earnings of T1 tax filers, whether they had one or several employers, according to the industry of their main employer.^Note Although tax filers may accumulate wage-earnings from multiple employers associated with different industries, all their wage-earnings were assigned to the industry of their main employer.

In 2017, the industry sectors with the highest median wage-earnings were “utilities” ($97,130) and “mining, quarrying, and oil and gas extraction” ($94,050). The earnings for the 25th percentile in these two industries ($65,060 and $54,320, respectively) were higher than the median wage-earnings for nearly all other industries. The median wage-earnings for these two industries were also higher than the top quartile (P75) of all other industries. According to the Labour Force Survey (LFS), “utilities” and “forestry, fishing, mining, quarrying, oil and gas” had the highest average hourly wages and were also among the highest for average actual hours worked.^Note  Among the subsectors for the “mining, quarrying, and oil and gas extraction” industry, “oil and gas extraction” had the highest median by far, at $153,860. The vast majority (83.7%) of wage-earners whose main industry subsector was in the “oil and gas extraction” resided in Alberta. In 2017, the industries with the lowest median earnings were “accommodation and food services” ($15,000); “arts, entertainment and recreation” ($16,350); and “retail trade” ($21,610). According to 2017 LFS data, “utilities” and “forestry, fishing, mining, quarrying, oil and gas” had the lowest rate of part-time workers, while “accommodation and food services” had the highest rate.^Note  For unionization, “utilities” had among the highest rate, while “accommodation and food services” had among the lowest.^Note 

From 2015 to 2017, “health care and social assistance” had the highest growth in the number of wage-earners (from 1,473,200 tax filers to 1,539,100 tax filers) and a small decrease in median (from $39,670 to $39,410). “Administrative and support, waste management and remediation services” had the highest decrease in the number of wage-earners (from 895,940 tax filers to 834,800 tax filers) and a small increase in median (from $25,230 to $25,450). “Public administration” had the largest increase in median wage-earnings (from $57,100 in 2015 to $59,090 in 2016 and $60,150 in 2017). The territories had by far the largest proportion of wage-earners in the “Public administration” industry (40.2% for Yukon, 40.4% for the Northwest Territories and 47.3% for Nunavut). “Management of companies and enterprises”, which is among the industries with the fewest wage-earners, had the highest decrease in median from 2015 to 2017, even though it increased in 2016 (from $58,600 in 2015 to $59,610 in 2016 and $45,170 in 2017). This industry also had the highest fluctuation in number of wage-earners (from 146,650 in 2015 to 125,330 in 2016 and 204,720 in 2017). Caution should be taken when analyzing this data as this large fluctuation may be due to changes in reporting or coding methods.

Data table for Chart 3



Data table for Chart 3
Table summary
This table displays the results of Data table for Chart 3. The information is grouped by Industrie (appearing as row headers), 25th percentile, Difference between 25th percentile and 50th percentile, Difference between 50th percentile and 75th percentile and Difference between 75th percentile and 95th percentile, calculated using dollars units of measure (appearing as column headers).

Industrie	25th percentile	Difference between 25th percentile and 50th percentile	Difference between 50th percentile and 75th percentile	Difference between 75th percentile and 95th percentile
	dollars
Total, All industries	14,630	22,350	28,600	59,140
11. Agriculture, forestry, fishing and hunting	10,920	13,440	20,490	42,840
21. Mining, quarrying, and oil and gas extraction	54,320	39,730	40,770	100,860
22. Utilities	65,060	32,070	28,200	54,370
23. Construction	25,360	21,530	26,380	53,530
31-33. Manufacturing	29,110	18,110	25,110	57,110
41. Wholesale trade	27,560	20,140	28,450	84,610
44-45. Retail trade	9,630	11,980	17,460	45,410
48-49. Transportation and warehousing	23,090	21,910	23,440	54,960
51. Information and cultural industries	31,190	25,240	28,960	69,090
52. Finance and insurance	32,960	21,350	34,400	120,030
53. Real estate and rental and leasing	17,390	19,050	24,390	72,010
54. Professional, scientific and technical services	27,230	25,690	32,810	78,720
55. Management of companies and enterprises	17,980	27,190	39,560	124,060
56. Administrative and support, waste management and remediation services	10,840	14,610	19,540	55,010
61. Educational services	18,810	27,310	32,640	32,830
62. Health care and social assistance	22,430	16,980	18,950	42,600
71. Arts, entertainment and recreation	6,410	9,940	21,180	42,920
72. Accommodation and food services	7,190	7,810	11,210	25,870
81. Other services (except public administration)	13,490	17,200	21,420	51,100
91. Public administration	32,390	27,760	25,350	39,220
Note: The industries have been sorted in order of NAICS code. The "All industries" category includes wage-earners with unknown Source: Statistics Canada, Income Statistics Division, Preliminary T1 Family File 2017, Custom Tabulation.

Conclusion

This article describes data on annual wage-earnings from the preliminary T1 Family File. Annual median income from wages, salaries and commissions varied considerably by sex, age, province or territory, and industry, but it remained fairly stable from 2015 to 2017. Women had lower median annual wage-earnings than men, and wage-earners in the age groups from 25 to 54 years had higher median wage-earnings than the youngest group of wage-earners. The Northwest Territories, Yukon and Alberta generally had the highest wage-earnings, while the Maritime provinces and Nunavut had the lowest. “Mining, quarrying, and oil and gas extraction”, and “utilities” had, by far, not only the highest median wage-earnings, but also the highest 25th and 75th percentile. “Accommodation and food services”, “arts, entertainment and recreation”, and “retail trade” had the lowest median wage-earnings.

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Data sources, methods and definitions

Data source:

This paper uses the version of the T1 Family File (T1FF) for 2017 that is based on the preliminary databases from the T1 Income Tax and Benefit Return and T4 Statement of Remuneration Paid files. The population in the preliminary version of the T1FF varies slightly from the final T1FF data: it does not capture a certain amount of late tax filers or reassessment. The preliminary T1FF contains approximately 97% of the records used to create the final T1FF. This version of the T1FF also does not include non-filing dependants and non-tax filing spouses of tax filers who may have had earnings during the year.

Because of the nature of tax information, the analysis focusses on all wage-earnings gained in a calendar year and does not take into account employment characteristics that are often used in other studies. For example, it is not possible to draw conclusions according to hourly wage rates, full-time or part-time status of employees, or full-year or part-year employment.

The distribution statistics for wage-earnings change little between the preliminary and final T1FF data. Therefore, preliminary data can help researchers analyze the evolution of market trends in a timelier fashion and can lead to a quicker turnaround in evaluating the labour market effects of policy change. Using the preliminary files does not strongly affect the findings described in this analysis, since the results would vary only slightly if reproduced with the final T1FF data. Many other important variables from the T1FF, such as total and after-tax income of individuals and families, are only available on the final T1FF.

Target population:

The target population is tax filers with wages, salaries and commissions. This target excludes tax filers below the age of 15 years (as of December 31 of the tax year), tax filers that are only self-employed, tax filers who died during the tax year and tax filers who provided a mailing address outside of Canada. The section of this paper that analyzes industries is limited to tax filers with wages, salaries and commissions with an assigned industry (NAICS) based on the employer information on their T4 slip.

Terminology:

Wages, salaries and commissions: This article refers to wages, salaries and commissions as “wage-earnings” and to individuals with wage-earnings greater than $0 as “wage-earners”. Wages, salaries and commissions includes employment pay and commissions as stated on T4 information slips, training allowances, tips, gratuities, and royalties. It also includes tax-exempt employment income earned by registered Indians. All forms of self-employment earnings are excluded. Individuals that have both wage-earnings and self-employment income are included in the analysis, but only their wages-earnings are considered. The components of employment earnings are wages and salaries (line 101 of the T1 form), other employment income (line 104 of the T1 form), and Indian exempt income (derived from the information provided on the Determination of Exemption of an Indian’s Employment Income form). Wage, salaries and commissions combines income received from multiple employers.

Median: The median is the value in the centre of a group of values (i.e., 50% of people make above this value and 50% of people make below this value).

Interquartile range: The distance between the 25th and 75th percentile is called the interquartile range. The 25th percentile is the value 25 percentage points below the median, and the 75th percentile is the value 25 percentage points above the median.

P95: The 95th percentile (P95) corresponds to the value below which 95% of the population fall.

Industry: The industries are defined using the North American Industry Classification System (NAICS) for Canada (for more information, see Statistics Canada’s industry classification). The term “industry” in this article refers to the two-digit NAICS sector (e.g., sector code 23 refers to construction) and the term “industry subsector” refers to the three-digit NAICS subsector (e.g., subsector code 236 refers to construction of buildings). This article identifies the main industry of wage-earners as the industry on the T4 slip with the highest wages and salaries (Box 14). The industry can be derived using the employer information on the T4 slip for most wage-earners. The section on industry includes only wage-earners whose T4 slip information was available and sufficient to identify an industry.^Note 

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Bibliography

Moyser, Melissa. 2017. “Women in Canada: A gender-based statistical report.” Women and Paid Work. Statistics Canada Catalogue no. 89-503-X. Ottawa.

Patterson, Martha. 2018. “Who works part time and why?” Labour Statistics at a Glance. Statistics Canada Catalogue no. 71-222-X. Ottawa.

Statistics Canada. Table 14-10-0037 Actual hours worked by industry, annual.

Statistics Canada. Table 14-10-0023 Labour force characteristics by industry, annual (x 1,000).

Statistics Canada. Table 14-10-0132 Union status by industry.

Appendix A