ADP® Pay Insights

Pay growth has stabilized at elevated levels

    Year-over-year change in annual pay was 7.6 percent in August, in line with monthly readings since Spring 2022. In early 2021, annual pay increases were running at about 2 percent. While the pace of pay increases is elevated, its growth has flattened.

Pay Level

$56,000 Median Annual Salary

Pay Change

up7.6% Year-Over-Year

Year-Over-Year Median Pay Change

August Pay Insights

August Pay Insights by State

About this report

The ADP® National Employment Report™ is published monthly by the ADP Research Institute® in close collaboration with the Stanford Digital Economy Lab. The ADP® National Employment Report™ provides a snapshot of U.S. nonfarm private sector Employment based on actual transactional payroll data.

Calendar

Upcoming reports:

October 05, 2022
November 02, 2022
November 30, 2022

Technical Notes

DATA SOURCE

The ADP Pay Insights Report is based on ADP payroll transaction data. The data includes select worker demographic information and firm characteristics. Each month, payroll data from about 17 million U.S. jobs are used to estimate the annual pay cited in this report. We track the same cohort of workers over a 12-month period to compute year-over-year change in pay for matched individuals. The matching process results in about 10 million individual pay change observations each month. Pay Insights covers both salary and wage workers. Salary workers make up about 39 percent of our sample; wage workers about 61 percent.

DEFINITIONS

Pay

The Pay Insights Report tracks gross pay, which includes overtime, tips, bonuses, and commissions in addition to salary and hourly wages.

Annual pay

Our pay measures are job-based. Each job is a unique pairing of worker and employer.

For each job, we observe actual total pay over the preceding 12 months to compute annual pay. If a job is paid only part of the year, an annual equivalent is estimated using the observed pay rate.

We choose to calculate annual pay for the following reasons.

  1. Hourly estimates are challenging if the hours associated with the pay amount are not provided.
  2. A longer period of observation can eliminate short-term fluctuations in pay. For example, a bonus paid during a particular month will overstate a worker’s usual pay. A 12-month trailing measure of total pay not only smooths monthly variations, it also captures the full pay picture for the year.
Median annual pay change

Once individual annual pay is estimated, we match annual pay from the same job observed in both the current month and 12 months earlier. This matching process results in about 10 million individual pay-change observations each month. The median of the distribution of matched individuals’ year-over-year annual pay change is computed.

Job

Each job is a unique pairing of an individual worker and individual employer.

Job-stayer

If a job (the same employee-employer pairing) appears in both the current month and the same month from last year, its associated pay change will be included for job-stayers.

State data

Geographic data is based on the primary location of the job, not the location of the worker.

Job-changer

While our report focuses on the pay trajectories of job-stayers, we also track job-changers we observe. We are able to track only job-changers whose previous and current employers both are ADP clients.

If a worker holds multiple jobs during a single time period, we measure the job with the highest rate of pay for the month to eliminate multiple jobs held by a single worker. We then match those workers with their pay from a year prior. If a worker's job changes over that 12-month period, we consider this person a job-changer. Each month, we measure between 500,000 and 800,000 job-changers.

Pay insights for job-changers are a separate series. Only job-stayers are included in sub-segments such as demographics, industry, and firm size.

Matched-sample distributions
Industry Matched individuals
Construction 4%
Education/health services 15%
Financial activities 9%
Information 3%
Leisure/hospitality 8%
Manufacturing 18%
Natural resources/mining 1%
Other services 5%
Professional/business services 19%
Trade/transportation/utilities 19%
Demographics Matched individuals
Male 55%
Female 45%
Age  
16-24 8%
25-34 23%
35-54 44%
55+ 25%

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Employment Reports

The ADP® National Employment Report™ is published monthly by the ADP Research Institute® in close collaboration with the Stanford Digital Economy Lab. The ADP® National Employment Report™ provides a snapshot of U.S. nonfarm private sector Employment based on actual transactional payroll data.

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