Key Small Business Statistics - July 2002

How much do employees of small businesses earn?

The Survey of Employment, Payrolls and Hours (SEPH) of Statistics Canada publishes the average weekly earnings at the enterprise level based on weekly payroll data. These data include gross pay as well as overtime and bonuses, commissions and other special payments before major deductions such as income taxes, employment insurance contributions etc., but excludes taxable allowances and benefits, and employer contributions to employment insurance, pension plans and other welfare plans. Average weekly earnings are derived by dividing total weekly payrolls by payroll employment (see How many people work for small businesses). The SEPH excludes self-employed persons unless the person is on the payroll of his/her enterprise, and does not cover the following industries: agriculture, fishing and trapping, private household services, religious organizations and military personnel of defence services.

In 2001, an average worker in Canada's private sector earned approximately $676 per week (Table 7 and Figure 5). Generally, the size of a business was positively related to the weekly earnings of its employees: Small firm employees working for businesses with fewer than 100 employees earned below the average with a weekly earning of $589, whereas those working for medium-sized firms (more than 100 but fewer than 500 employees) and large firms (more than 500 employees) earned above average weekly earnings of $701 and $753, respectively. The only exception to this pattern are firms in the service-producing sector with more than 5 but fewer than 20 employees, where the weekly earnings are lower than smaller firms with fewer than 5 employees. This is primarily due to the fact that over 30% of total employment in that size category is made up by the two lowest paying industries, namely retail trade, and accommodation and food services.

Table 7: Average Weekly Earnings by Firm Size (Number of Employees) in the Private Sector, 2001¹

Number of Employees	Total	Goods- Producing Sector2	Service- Producing Sector2
Source: Statistics Canada, Survey of Employment, Payrolls and Hours (SEPH), January 2002; calculations by Industry Canada. Note 1: SEPH data exclude self-employed workers who are not on a payroll, and employees in the following industries: agriculture, fishing and trapping, private household services, religious organizations and military personnel of defence services. Data underlying this table exclude employment in Public Administration, postal services, public transit, educational services and institutional and other government-funded health care services, but include employment in private sector health practices and beer liquor stores. A technical note on the separation of public and private sector employment is available. Note 2: By conventional Statistics Canada definition, the goods-producing sector consists of NAICS codes 11 to 31–33, while NAICS codes 41 to 91 define the service-producing sector.
0–4	566.84	633.74	548.31
5–19	540.39	684.70	498.46
20–49	605.35	764.21	545.19
50–99	651.50	786.95	590.01
Small Enterprises (less than 100)	589.06	723.32	541.02
100–299	691.98	809.39	616.89
300–499	726.28	826.71	657.31
Medium Enterprises (100–499)	701.90	814.40	628.59
Large Enterprises (500 or more)	753.14	948.71	654.28
Total	675.84	831.04	588.78

Figure 5: Average Weekly Earnings in the Goods-Producing and Service-Producing Sectors by Firm Size, 2001^1,2

Source: Table 7

On average in 2001, goods-producing employees were paid $242 more per week than the people working in the service-producing sector. The difference between the two sectors was greatest in large firms, at about $294 per week, or an annual average differential of $15 000. However, goods-producing employees also worked longer hours, so on a per-hour basis the difference would be less pronounced.