2. Key remuneration concepts

The key remuneration components reported in this section are Base Salary, Total Remuneration Package (Base Salary plus benefits), and Total Reward (Total Remuneration Package plus bonuses). To gain a complete understanding of APS remuneration, all elements of the key remuneration components need to
be considered. The Total Reward provides the most complete overall remuneration information as it is made up of Base Salary and Total Remuneration Packages, as component parts.

2.1 Base Salary

The term Base Salary describes the full-time annualised salary paid to an employee. It includes salary sacrifice amounts and pre-tax employee superannuation contributions made through salary sacrifice arrangements. It excludes bonuses and other benefits.

In 2014, the median Base Salary increase at all APS classifications was 0.1%. The median Base Salary movement at the non-SES classifications was 0.1% and the median Base Salary movement at the SES classifications was 0.2%.

Table 2.1 provides 2013 and 2014 Base Salary movement. The greatest increase in median Base Salary was at the APS 1 classification with a 3.8% increase. The lowest median movement from 2013 to 2014 was 0.0% shared by seven classifications.

The result of low employee mobility over the last few years is that a large proportion of APS employees are remaining at the same classification in the same agency. When employees remain at the same classification for long periods, they are likely to have advanced through the salary scale and reached
the top of the scale for their classification.

Figure 2.1: Median Base Salary by classification

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Source: Table 2.1

Figure 2.2: Base Salary range by classification: Graduate to EL 1

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Source: Table 2.1

Note: Refer to Section 7 (remuneration findings by classification) for the minimum and maximum values for each classification.

Note: Refer to Appendix A.2 for notes on interpreting box plots.

Figure 2.3: Base Salary range by classification: EL and SES

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Source: Table 2.1

Note: Refer to Section 7 (remuneration findings by classification) for the minimum and maximum values for each classification.

Note: Refer to Appendix A.2 for notes on interpreting box plots.

2.2 Total Remuneration Package

Total Remuneration Package (TRP) includes Base Salary plus:

• agency superannuation contribution;
• motor vehicle cost /Executive Vehicle Scheme or cash in lieu of motor vehicle;
• motor vehicle parking; and
• any other benefits and supplementary payments.

In essence, TRP covers Base Salary plus benefits. It excludes bonuses, as defined in Total Reward (see definitions in Appendix A.2), shift and overtime payments.

The average movement in median TRP across all classifications from 2013 to 2014 was 0.6%.

The non-SES classifications median TRP increased by 0.6%, and SES classifications median TRP increased by 1.3%.

The APS 1 classification saw the greatest increase in median TRP with a 2.8% increase from 2013. The key contributor is the increase in median Base Salary of 3.8%. The second greatest increase was 2.5%, recorded at the SES 3 classification.

The lowest median TRP change was recorded at the APS 2 classification; with 0.0% change from 2013 to 2014.

As demonstrated in Table 3.1, Base Salary makes up around 85% of the Total Reward received by employees at the non-SES classifications. The key benefit received by non-SES employees in these classifications is the employer superannuation contribution which is primarily calculated on base salary. Normally
the main contributor to TRP movement is Base Salary movement.

The median TRP (see Table 2.2) figures at the SES classifications are more sensitive to minor variations due to the smaller sample size of SES employees. In 2014, there were increases in the agency superannuation contribution for members in the CSS and PSS defined benefits schemes. These are more likely
to affect the median at the SES classifications, as a higher proportion of SES are in those schemes. Increases in car allowances and changes to car parking arrangements, also affected the SES median. This is because most SES employees receive at least one of these allowances.

Figure 2.4: Median Total Remuneration Package by classification

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Source: Table 2.2

Figure 2.5: Total Remuneration Package range by classification: Graduate to EL 1

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Source: Table 2.2

Note: Refer to Section 7 (remuneration findings by classification) for the minimum and maximum values for each classification.

Note: Refer to Appendix A.2 for notes on interpreting box plots.

Figure 2.6: Total Remuneration Package range by classification: EL and SES

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Source: Table 2.2

Note: Refer to Section 7 (remuneration findings by classification) for the minimum and maximum values for each classification.

Note: Refer to Appendix A.2 for notes on interpreting box plots.

Total Remuneration Package movements by agency

Table 2.3 provides information on the median movement of the Total Remuneration Package (TRP) at each classification by agency. Agency TRP is used rather than Base Salary or Total Reward, as it covers the two most significant elements of APS remuneration: Base Salary and the employer superannuation
contribution.

For a calculation to be made, an agency must have employees substantively at a classification level in both 2013 and 2014. As a result, the number of agencies for each classification will vary.

Table 2.3 shows the agency TRP median movement from 2013 to 2014 tended to be in the range of 0 and 2%. This is lower than the 2012 to 2013 agency TRP median movement, which was in the '2 and less than 4%' range.

The reduction between the two year results is likely to be influenced by a reduction in employee mobility and fewer general wage increases. Through a slowing of employee mobility, a higher proportion of employees have reached the top of their salary scale. As a result, fewer agency median movements
are being affected by salary advancement within a salary scale. When employee mobility rates start to increase, this trend may shift. In addition, many APS employees did not receive a general pay increase in the 2014 calendar year.

2.3 Total Reward

Total Reward is the sum of the Total Remuneration Package plus bonuses. Bonuses include individual performance, retention and productivity bonuses as well as whole-of-agency or group bonuses. Median performance bonuses in 2014 ranged from $725 at the APS 1-4 classifications to $32,000 at the SES 3
classification.

The overall movement in median Total Reward across all classifications from 2013 to 2014 was 0.3%.

From 2013 to 2014, the non-SES median Total Reward increased by 0.3%, and the SES median Total Reward increased by 1.0%.

Consistent with TRP, the APS 1 classification saw the greatest increase in median Total Reward with an increase of 3.1% from 2013. The SES 3 classification recorded the second highest increase in median change in Total Reward with an increase of 2.7%. .

Both the APS 3 and APS 4 classifications showed a reduction of 0.2% and 0.3% respectively. This was mostly caused through the cessation of performance bonus payments for employees at the top of their salary scale in three agencies.

Figure 2.7: Median Total Reward by classification

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Source: Table 2.4

Figure 2.8: Total Reward range by classification: Graduate to EL 1

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Source: Table 2.4

Note: Refer to Section 7 (remuneration findings by classification) for the minimum and maximum values for each classification.

Note: Refer to Appendix A.2 for notes on interpreting box plots.

Figure 2.9: Total Reward range by classification: EL and SES

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Source: Table 2.4

Note: Refer to Section 7 (remuneration findings by classification) for the minimum and maximum values for each classification.

Note: Refer to Appendix A.2 for notes on interpreting box plots.