Cape Town - Growth in South African take-home pay picked up marginally, reflecting steady yet slower growth in March, according to BankservAfrica’s latest Take-home Pay Index released on Thursday.
This represents a recovery from 2016 when salaries were on a decline and unable to keep pace with the rate of inflation.
“Real take-home pay in SA increased by 0.9% on a year-on-year (y/y) basis in March 2018,” commented Shergeran Naidoo, head: stakeholder engagements at BankservAfrica.
“Although this increase cannot be described as exceptional – due to its slow progress and because of lower inflation - South Africans in the formal sector are still better off than a year ago.”
In the past year, typical take-home pay increased by 0.8% more than the average.
March’s take-home pay also reflects companies’ "performance bonus pay-outs" that follow from December’s 13th cheque disbursements to employees. The number of these pay-outs to employees rose significantly last month, the latest index shows.
“The proportion of employees receiving between R50 000 and R100 000 per month increased by 17.1% y/y and reached 2.5% of the total pay-outs in March 2018. Furthermore, this was the first time since December that the number of employees in this category was over 75 000 employees,” said Mike Schüssler, chief economist at Economists.co.za.
Meanwhile, those earning less than R4 000 per month decreased by 6.8% over the same period.
Schüssler explained that, in the context of March 2018, the number of employees taking home over R25 000 per month were more than those earning under R4 000. Therefore, take-home pay for those earning between R4 000 and R25 000 per month was still the dominant category at 44.9%.
Over 55% of employees paid via SA’s National Payment System received take-home pay of over R10 000. This factors in mainly larger employers and excludes workers receiving actual cash.
Meanwhile, the growth in those receiving more than R10 000 per month in their bank account has been close to 9% on average over the last year.
The number of employees receiving less than R10 000 declined by more than 5% y/y.
“However, it should be noted that most of these salary movements were due to inflationary increases – not actual increases,” Schüssler pointed out.
The non-adjustment of tax brackets for those earning over R300 000 annually also affected March’s salary increase. If adjustments had taken place, formal take-home pay would have been at least 5% more.
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