The pace of wage growth has picked up slightly, though it remains subdued as the economy recovers only gradually from recession and the global economic downturn.
The Labour Cost Index shows wages rose 1.7% in the year to December.
In the three months to December, wages rose 0.5% compared with the previous quarter.
Private sector workers enjoyed higher increases than their public sector counterparts.
While the pace of growth has picked up from its low in March, it is a far cry from the peak of 4% annual growth in late 2008.
There are further signs the economy stalled late last year, with filled jobs remaining flat while paid hours worked fell in the last three months of the year.
Economists say that indicates unemployment will rise when the official figures come out on Thursday.
Unions to push for increase
Unions say they will push for wage increases of at least 4% this year to keep workers ahead of rising living costs.
Wages in the public sector rose less than the average by only 1.4%, while wages in the private sector increased 1.9%.
The Council of Trade Unions says there have been large rises in GST, food prices and petrol costs but the Government's tax cuts did not fully compensate for these.
The CTU says workers are effectively going backwards and will be looking to wage increases at least matching the inflation rate.