Median vs. average monthly wage statistics: There's a big difference

The difference is higher than 10,000 dinars

The fact that the average gross salary in June was above 74,000 dinars, while the net amount was 53,000, has surprised many citizens in Serbia.

Simply because they do not earn as much. However, in addition to these data, the Statistical Office of Serbia (RSZ) has been calculating, since last year, also the median net wages, which in June amounted to RSD 41,045.

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This means that 50 percent of workers have earned up to the stated amount. Therefore, only half of them.

The difference between net and median net wages is as much as RSD 12,000.

The picture becomes clearer here and you will agree with most economists who think that the best wage indicator in Serbia is the median figure, because it covers all employers who have submitted electronically filled out forms with calculated wages to the Tax Administration - instead of calculating the average wage based on of a representative sample.

Included are salaries of full-time workers, but also those working fixed-term jobs. Statistics do not include earnings under temporary service agreement and any other earnings that are not taxed.

WHY MEDIAN WAGES

Since March 2018, the RZS has been reporting the median wages as a new methodology for calculating the average net monthly wages. The method used earlier, since 1963, has been retired because it showed higher average earnings.

Prior to applying median wages, the RZS took into account the wages that were paid in the reporting month, regardless of which month they related to, or when they were earned. For that reason it would happen that the employer was late paying the wages and would then pay three months' worth at once, thus artificially inflating the real figure.

(Telegraf Biznis)