Compensation of employees
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Relative to the SPSD/M, the estimate of employment income for the MEA concept is larger as it includes wages and salaries as well as the broader concept of employers’ social contributions. While employers’ social contributions includes retirement allowances in both income concepts, the MEA also includes employers’ social contributions such as those to the CPP or QPP, workers’ compensation plans, pension plans and other benefit plans. For practical reasons, due to the unavailability of distinctions in the tax data, retirement allowances are counted as employers’ social contributions even though they do not accrue from current production, while in the SPSD/M this is included as part of “other income.” Royalties are included in wages and salaries for SPSD/M but are included as property income in the MEA. Scholarships, bursaries and research grants are included in the SPSD/M as part of “other income,” while the MEA includes these items as current transfers to households paid from governments.
As noted earlier, employers’ annual contributions to their employees’ pension plans are recorded as compensation to employees, however there will be no difference in disposable income for the SPSD/M and the MEA in relation to the treatment of pension transactions. Although employer contributions are shown in compensation of employees they are subsequently transferred out in current transfers paid.
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