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What is median salary, and what is meant by arithmetic mean? And what is the difference between growth in average salary and average salary growth? We have gathered the most commonly used words and terms about salary.
Median salary is the middle salary when all salaries in a group are ranked from lowest to highest. This means that half of the people earn less than the median salary, and half earn more.
The arithmetic mean for salary, often called average salary, is the sum of all salaries in a group divided by the number of people in the group. It can give an indication of the "typical" salary but will be influenced by very high or very low salaries.
This is a calculation of how much the average salary in a group, for example, Tekna's members in the private sector, has changed from one year to another. The change can be influenced by changes in the composition of the group, such as when many young people with lower salaries enter and older employees with higher salaries leave. This can pull the average down and give a misleading picture of the real salary growth at the individual level.
To correct this, Tekna also calculates salary growth that takes into account changes in the age composition (number of people per graduation year).
If the composition of the group had remained unchanged from the previous year, the growth in average salary would be equal to the average salary growth per person.
Average salary growth is how much the salary has changed for comparable individuals measured from one point in time to another. Here, all changes that affect salary are included, such as job changes or promotions.
This means looking at responses from individuals who answered the previous salary survey and comparing them with the responses they give now. In other words, members who are included in the statistical basis for both years, for example, 2023 and 2024.
There are several terms that recur in Tekna's salary statistics and how we explain them. Here are the expressions most commonly used.
Average, also called arithmetic mean, is the most common average of a set of numbers. That is, the sum of all the numbers divided by the number of numbers.
The lower quartile is the number that separates the lowest 25% of the group from the rest. That is, 25% of those who responded to the salary survey earn less than the lower quartile, and 75% of those who responded to the salary survey earn more than the lower quartile.
Median salary is the middle salary when all salaries in a group are ranked from lowest to highest. This means that 50% of the people earn less than the median salary, and 50% earn more than the median salary.
The upper quartile is the number that separates the highest 25% of the group from the rest. That is, 25% of those who responded to the salary survey earn more than the upper quartile, and 75% of those who responded to the salary survey earn less than the upper quartile.
The 90th percentile is the number that separates the highest 10% of the group from the rest. That is, 10% of those who responded to the salary survey earn more than the 90th percentile, and 90% of those who responded to the salary survey earn less.
The salary concept in Tekna is the agreed annual salary (monthly salary x 12) as of 31.12, including the value of bonuses, performance pay, commission, and similar that have been paid in the last 12 months. In the public sector, any fixed allowances are also included. Variable allowances such as shift allowances and the value of benefits in kind (mobile, broadband, etc.) are not included. Overtime is considered a variable allowance and is not included unless it is part of a fixed, agreed addition to the annual salary.
By graduation year, we mean the year you completed your master's degree. We use the completed master's degree because it is this that gives access to becoming a member of Tekna.
Our lawyers help you as a Tekna member with questions about your salary. Contact our lawyers for assistance here.
