Controlling public spending is a priority for OECD countries. Salary policy in the public sector is therefore of particular concern. This new annual report analyses recent trends in public sector pay in OECD countries. It examines the links between public expenditure and public sector compensation costs, and presents recent developments in pay determination systems in the public sector. It provides information on the level and the components of individual remuneration for a typical employee in ten selected occupations, and identifies various mechanisms implemented in countries to make individual pay more flexible. Every year, a chapter focusing on a specific experience in the public sector pay area will be added. This report should be of particular interest to public officials responsible for defining, implementing and monitoring pay policy in the public sector and to experts in pay determination systems, employment systems and industrial relations in the public and private sectors.