Wage definition: 

• Wage as a statistical concept is part of the wider definition of compensation of employees. Compensation is divided into 
  a) wages and salaries and 
  b) employers' social contributions.
• The definitions and terms used here are based on the guidelines provided in the 'System of National Accounts' (SNA) by the United Nations and the 'European System of Accounts' (ESA) by Eurostat.
• According to this definition wages and salaries in cash include components such as basic wage, enhanced payments, overtime, holiday pay and employment benefits. Employers' social contributions, such as pension, unemployment insurance and parental leave pay are not included. 

Statistical scope:

• The wage statistics are based on wages in cash paid by an employer to an employee.
• Wages are A-taxed wages (taxes are deducted directly from income) paid through the pay-as-you-earn (PAYE) tax system from employers that are economically active in the Faroe Islands.
• All wages are included regardless of the employee’s country of residence.
• Wages count for each employer. Thus if a person has three different employers they receive three wages. Multiple wages from the same employer are grouped together into one. 

Other definitions:

• Seasonally adjusted: Numbers are adjusted for seasonal patterns such as recurring seasonal activity patterns. Seasonal adjustment may not be a reliable method in periods with exceptional seasonal fluctuations where monthly figures deviate too much from the regular calendar.
• Trend:  A depiction of the overall trend in wages by adjusting for seasonal effects and error components in the figures.
• Average: The average of wages paid. The average is calculated by dividing the sum of total wages paid by the number of wage recipients. The number of hours worked is not accounted for. 
• Median: The wage that divides the employees' wages into two equal groups, with half of the wages paid being higher and the other half lower than the median wage. The number of hours worked is not accounted for. 
• Institutional sector: Institutional sector: The sorting of institutional entities by economic activity. The economic activity is determined by whether the goods and services produced are for the market, whether the ownership is public or private, as well as the type of production. The definitions and terms used are based on the guidelines provided in the 'System of National Accounts' (SNA) by the United Nations and the 'European System of Accounts' (ESA) by Eurostat. In the wage and employment statistics the institutional sectors are grouped differently than normal. Non-financial corporations, financial corporations, households and organizations are grouped together and divided by whether the ownership is public, private or foreign. Public administration and services is unchanged and is divided in to central government, state government, local government and social security funds. When wages are depicted and described, the institutional sector is often divided by whether the employers are under public or private control.  
  • "Under public control" includes "General government" + "Public corporations" 
  • "Under private control" includes "National Private corporations" + "Foreign controlled corporations"
• Main activity: Main activity is attached to the employer that pays the wage. An employer is grouped in to the main activity in which he has the largest activity. A person may have several employers, and the employer from which the most wage is paid is set to be the person's main activity of work. Main activity is not necessarily the actual economic activity of the work done for the wages paid as an employer may cover several economic activities. Main activity is based on the international statistical classification of economic activities NACE rev. 2. The first and second level are directly comparable. The third level opens up a few subgroups in order to best portray the national economy. On the third level there are 93 economic activities. 
• Employee's activity: A person can receive wages from several employers across several main activities. The main activity of an employee is set to be the main economic activity of the employer from which the largest wage is received. Oher economic activities, from which wages are received are registered as minor activities.
• Citizenship: Citizenship is grouped in to continents and some smaller geographical areas. Citizenship is based on the country with most inhabitants with said citizenship. For example, Greenland is grouped in to Northern Europe, as they have Danish citizenship, even though the country geographically falls under North America. 
• Long-term residency: Whether a person is deemed as having long-term residency to the Faroes or not. In order to have long-term residency one has to either have lived in the Faroe Islands for half of their life or for 7 out of 10 consecutive years at some point in their life.