Labour costs

Abstract

Labour costs cover all aspects of costs incurred by employers when employing workers. These include wages and salaries, National Insurance and social contributions, redundancy payments, benefi ts in kind, overheads and other nonwage components. This article gives a brief overview of the structure of labour costs and then focuses on earnings (the largest component of labour costs). It shows how earnings in the whole economy have changed over time and also the earnings distribution by occupation. The other topics of interest analysed in the article are the gender pay gap both over time and by various personal characteristics, as well as estimates of how many people are paid below the National Minimum Wage.