New research indicates that the increase in disposable income for South Africans will once again be slower than inflation for the rest of the year.
The latest BankservAfrica Disposable Salary Index (BDSI), revealed that South Africans took home an average of R11,641 in February 2014, which was 6.4% higher than a year ago.
In real terms, take-home pay increased with 0.5% on a year ago.
On the smoothed and adjusted January data, disposable income in the BDSI actually declined with R282 between January and February, BankservAfrica said.
The actual year-on-year increases remained flat at 0.5% after inflation and at 6.3% and 6.4% in January and February, respectively, in nominal terms.
“The January 2014 change is the lowest increase in both real and nominal terms in seven months and basically remained flat for February, making both months lower than the six previous months,” BankservAfrica said.
In December 2013, the average payment into people’s bank accounts was an unadjusted R12,834, which was only 2.3% up compared to December 2012.
“This indicates that at least part of the slowdown in increases is probably due to lower bonus payments as the economy struggled to gain traction and sales or production targets were not made. It is very likely that bonus payments could have been lower or, in some cases, delayed into January.”
Real disposable salaries equaled R10,859, which was nearly R500 lower than the smoothed December figure. However, December is always a bonus month and no amount of smoothing can completely adjust for that, BankServ said.
|Month||Disposable salary (ZAR)
||Smoothed disposable (ZAR)
||Nominal BDSI % change year ago
||Real disposable salary % change YoY
The median salary range
The median monthly BankservAfrica Disposable Salary remains between R8,000 and R9,000 in February.
An estimated 30% of all employees get to take home the average pay of R11,641, while about 70% of the workforce takes home even less.
Nearly 40% of formal sector take-home pay is now over R10,000, but BankservAfrica noted that these figures are slightly biased towards bigger firms, which generally pay a slightly higher salary than smaller firms.
The top 1% of take-home payments would start somewhere between R50,000 and R60,000 – probably close to R55,000, the group said.
The top 10% of formal sector workers have a take-home salary between R20,000 and R25,000, while less than 23% of employees take home more than R14,000, it added.
“With taxes, pensions and medical insurance taken off at the company level, along with garnishee orders and often company loans for items (from homes to microloans), it is very likely that the average salary is now well over R16,000 and that the median gross salary would probably be over R11,000,” BankservAfrica said.