Department of Labor and Regulation

Title - Labor Market Information Center

What are the differences between wage data and average annual pay?

Average annual pay (available on this website) produced by the Quarterly Census of Employment and Wages (QCEW) program is computed by dividing total annual pay of employees covered by UI programs by the average monthly number of these employees.  In addition to salaries, average annual pay data include bonuses, the cash value of meals and lodging when supplied, tips and other gratuities, and, in some states, employer contributions to certain deferred compensation  plans such as 401(k) plans, and stock options.  Monthly employment is based on the number of workers who worked during or received pay for the pay period including the 12th of the month.  With few exceptions, all employees of covered firms are reported, including production and sales workers, corporation officials, executives, supervisory personnel, and clerical workers. Workers on paid vacations and part-time workers also are included. 
Average annual pay is affected by the ratio of full-time to part-time workers as well as the number of individuals in high-paying and low-paying occupations.  When comparing average annual pay levels between industries and/or states, these factors should be taken into consideration.  Annual pay data only approximate annual earnings because an individual may not be employed by the same employer all year or may work for more than one employer.  Also, year-to-year changes in average annual pay can result from a change in the proportion of employment in high- and low-wage jobs, as well as from changes in the level of average annual pay.

Wages (available on this website) for the Occupational Employment Statistics (OES) survey are straight-time, gross pay, exclusive of premium pay. Base rate; cost-of-living allowances; guaranteed pay; hazardous-duty pay; incentive pay, including commissions and production bonuses; and tips are included. Excluded are overtime pay, severance pay, shift differentials, non- production bonuses, employer cost for supplementary benefits, and tuition reimbursements.

For each occupation, respondents are asked to report the number of employees paid within specific wage intervals (please see the table below). The intervals are defined both as hourly rates and the corresponding annual rates, where the annual rate for an occupation is calculated by multiplying the hourly wage rate by a typical work year of 2,080 hours. The responding establishments are instructed to report the hourly rate for part-time workers, and to report annual rates for occupations that are typically paid at an annual rate but do not work 2,080 hours per year, such as teachers, pilots, and flight attendants. Other workers, such as some entertainment workers, are paid hourly rates, but generally do not work 40 hours per week, year round. For these workers, only an hourly wage is reported.

Wage Intervals
Range Hourly Annual Number of Workers Percent
A Under $9.25 Under $19,240 64,010 16.1%
B $9.25 to $11.49 $19,240 to $23,919 70,809 17.8%
C $11.50 to $14.49 $23,920 to $30,159 77,521 19.4%
D $14.50 to $18.24 $30,160 to $37,959 66,898 16.8%
E $18.25 to $22.74 $37,960 to $47,319 46,259 11.6%
F $22.75 to $28.74 $47,320 to $59,799 32,505 8.2%
G $28.75 to $35.99 $59,800 to $74,879 18,521 4.6%
H $36.00 to $45.24 $74,880 to $94,119 10,530 2.6%
I $45.25 to $56.99 $94,120 to $118,559 5,621 1.4%
J $57.00 to $71.49 $118,560 to $148,719 2,413 0.6%
K $71.50 to $89.99 $148,720 to $187,199 1,372 0.3%
L $90.00 and over $187,200 and over 2,220 0.6%

Estimates Delivery System

The OES data is utilized within the Estimates Delivery System (EDS), an application which provides the Labor Market Information Center (LMIC) the capability to provide more in-depth analysis of occupational wage data. LMIC typically uses the EDS for creating wage estimates for more finite geographic areas (such as multi-county regions) in addition to the five South Dakota substate areas published by the BLS.

Current occupational wage information for South Dakota, including geographic definitions for the substate wage areas, is available on this website. To provide additional detailed occupational information targeted for workforce development purposes, the Workforce Information Grant (WIG) awarded by the Employment and Training Administration (ETA), U.S. Department of Labor, funds the Estimates Delivery System (EDS). The EDS provides the ability to produce occupational wage estimates by industry for specified geographic regions. The LMIC often utilizes the EDS system to produce more detailed occupational wage estimates by industry for the five substate areas defined by BLS. Regional data produced by the EDS would serve as a strong benchmark for industry specific occupational prevailing wage rates.

The EDS can also produce occupational wage data by industry for a specific county; however, it is likely that most of the data would be suppressed. Therefore, for wage requests which require the use of the EDS, it is common practice to use a bundle of counties which represent the typical labor shed for a particular county. Journey to Work (commuting pattern) data produced by U.S. Census Bureau is referenced for this information.

The main caveat regarding the use of EDS to produce wage data for unique commute sheds is that as the BLS funds the production of the OES worker and wage data, the BLS OES survey sample is designed to represent occupational data for statewide South Dakota and the five sub-state regions, not individual counties or select commute sheds. Therefore, it is possible to produce detailed wage information for select commute sheds, including occupational data by industry sector, but a high level of data suppression for certain areas may be a concern.

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Marcia Hultman, Secretary
123 W. Missouri Ave.
Pierre, SD 57501-4505
Tel. 605.773.3101
Fax. 605.773.6184