Real wages failed to keep up with inflation last year, but Hong Kong companies slightly increased payments such as bonuses and overtime. The Labour Earning Survey revealed yesterday that from June last year to June this year, 46 per cent of companies recorded some increase in average wages, 40 per cent recorded decreases and 14 per cent said wages had remained unchanged. The survey, compiled quarterly by the Census and Statistics Department, also found that after removing the effect of inflation, the average wage rate for all sectors slipped by 0.9 per cent. However, payrolls for the average employee rose by 2.7 per cent, or 1.8 per cent when discounting inflation, meaning Hong Kong's employers continue to reward employees with discretionary bonuses for performance rather than through their basic wages. Payroll figures show a greater quarter-to-quarter variation than the wage rates because they are based on the overtime worked by a particular company and the timing of bonuses and back pay. This means payroll figures are often higher in the first quarter of the calendar year when bonuses are paid. Wage rates do not include managerial-level employees while payroll bonuses take in all levels of staff. Figures showed rises of between 0.4 and 1.5 per cent in nominal wage rates in manufacturing, wholesale, retail, and import and export trades, and restaurant and hotel sectors. But these were offset by declines in the finance, insurance, real estate and business services sectors. There were falls in real wages in every sector besides transport, which showed slight increases. Overall, real wages in all sectors fell slightly by 0.4 per cent between June 2004 and June 2005. The biggest falls were in the personal services sector.