The data we collect provides information on the base salaries of staff in the Public Service and shows us wage growth by sector.
Annual salary in the Public Service
The collection of Public Service workforce data provides information on the base salaries of staff in the Public Service as at 30 June each year. In 2023, the average (mean) annual salary was $97,200 an increase of 7.0% from the previous year. This is the highest annual increase in public servants’ salaries since records begin in 2000. Private sector average earnings increased at a higher rate (7.7%) over the same period — calculated using average total hourly earnings for the private sector from Stats NZ’s Quarterly Employment Survey.
The annual Workforce Data salary movement is affected by:
- changes in the occupational composition of the workforce
- movement in staff pay
- service increments
- merit promotions
- performance-related increases
- salary differences between new and departing staff.
Drivers of wage increases this year include:
- the PSPA, which has delivered increases to base salaries of $4,000 to most public servants this financial year,
- normal progression increases, typically applied from 1 July annually,
- salaries for new staff, in a labour market which remains tighter than usual.
The average wage in the Public Service has grown by an average of 3.7% per annum since records began in 2000. The trend since 2000 is shown on the chart in first tab of the visualisation below.
Median salaries measure the mid-point of the salary distribution (half of the employees are below and half are above this salary level). The median is less affected than (mean) average salaries by a small number of employees with very high salaries. The median salary for Public Service employees was $84,800, an annual increase of 7.2%.
Wage growth has continued to proportionally benefit those towards the lower end and middle of the salary distribution. For example, salary growth near the bottom (at the 5th percentile) was 10.4%, while salary growth near the top (at the 95th percentile) was 6.2%. The salary of staff at the 95th percentile, approximately $170,500 is now less than three times the salary of staff at the 5th percentile, approximately $58,700, for the first time in over 20 years, demonstrating a lifting of salaries for lower paid staff relative to higher paid staff over time, in line with current Government expectations.
Staff earning less than $60,000 now comprise 9.1% of the Public Service workforce, down from 16.8% in 2022 and 38.6% in 2018. In 2023, the number of public servants who earn less than $60,000 fell 43.5% (4,420 FTE) to 5,730 FTE. Most of these staff are paid close to $60,000. We anticipate that many of these public servants will paid above $60,000 by 30 June 2024, due to the impact of the second tranche of PSPA increases.
The second tab in the visualisation above shows average salary by occupation group. In the year to June 2023, the increase in average salaries for Managers was 5.3% (1.6% in 2022) compared with 7.3% for staff in non-managerial occupations (3.2% in 2022). Average salaries increased 9.3% for Clerical and Administrative Workers, 8.9% for Contact Centre Workers, 7.1% for ICT Professionals and Technicians, 7.1% for Legal, HR, and Finance Professionals, 6.9% for Information Professionals, 6.0% for Social, Health and Education Workers, 6.0% for Policy Analysts, and 5.8% for Inspectors and Regulators.
The third tab in the visualisation above shows average salary by department. Departments that have a higher proportion of staff in operational and service delivery jobs tend to have a lower average salary, for example:
- Department of Corrections
- New Zealand Customs Service
- Ministry of Social Development
- Department of Conservation
- Ministry of Justice
In contrast, organisations with a larger proportion of staff in leadership, specialist professional and policy roles tend to have a higher average salary, for example:
- Public Service Commission
- Social Wellbeing Agency
- Ministry of Defence
- Department of the Prime Minister and Cabinet
- the Treasury
Wage growth by sector
Each quarter Te Kawa Mataaho reports on wage movements as measured by the Labour Cost Index (LCI). The LCI is released quarterly by Stats NZ. It measures changes in salary and wage rates in the labour market for the same quality and quantity of labour. The Index is “adjusted”, moving with changes in the price of labour, holding the quality and quantity of labour static.
This salary movement is different from the change in annual Public Service salaries, which was discussed in the previous section. The LCI is a more refined measure of real wage movement, as it controls for the quality and quantity of labour. As an example, the salary increase of a staff member promoted into a new, more highly paid role, is reflected in the Public Service average salary, but is not reflected in the LCI.
The Commission uses the LCI to monitor and oversee wage movements, including bargaining and pay equity outcomes, in the public sector and select public sector sub-sectors, including the Public Service.
The chart in the visualisation below shows annual wage growth of 4.2% for the public sector in the year to June 2023. Wage growth in the private sector was 4.3%, which remains significantly above average, and near the series-high 4.5% annual wage growth for the private sector reported in March 2023. Within the public sector, Public Service wage growth was 3.5% for the year to June 2023. It is notable that the full impact of the PSPA, along with high coverage collective bargaining, and pay equity, settlements in early 2023 didn’t affect the index in the June 2023 quarter.
More in-depth analysis on the latest quarterly LCI results are available on the Te Kawa Mataaho Employment Relations webpage.
The charts on the second and thirds tab of the visualisation below show the LCI trend in salary and wage movements of selected sectors since March 2018 and June 2001 respectively, on a cumulative basis.