Since SIPP’s 2014 Panel, the business profit variables (TJB(n)_PRFTB) have been topcoded by calculating the mean of positive profits at and above the topcode.

Starting 2019 SIPP, users now have access to more data above the profits topcode. The variables TPRFTB_TMED and TPRFTB_TSTD give the median and standard deviation of EJB(n)_PRFTB above the topcode.

To calculate the topcode, we use internal variables (EJB(n)_PRFTB) that are not output on the public-use file. These internal variables are the total profits earned at a self-employed job in the calendar year. EJB(n)_PRFTB differ from TJB(n)_PRFTB in that take-home pay included in EJB(n)_PRFTB is subtracted from TJB(n)_PRFTB. Thus TJB(n)_PRFTB are a given job’s retained profits. As an equation:

TJB(n)_PRFTB = EJB(n)_PRFTB – the sum of TJB(n)_MSUM across all months in a job spell. 

Users wishing to implement a median topcode procedure will then want to set 

TJB(n)_PRFTB = TPRFTB_TMED - the sum of TJB(n)_MSUM across all months in a job spell. 

In addition to the changes in the profits topcode, 2019 SIPP also saw changes to the profits bottomcode. Users that want to learn about the bottomcode changes can see the “2019 SIPP: Changes to Business Profits Bottomcoding ” user note.