Here’s the average take-home pay in South Africa right now

BankservAfrica has published its latest Take-Home Pay Index (BTPI) for May 2018, showing a drop in the country’s average disposable income over the past month.

The average take-home salary was R14,290 in current terms for May 2018, showing a decline of 1.3% on May 2017. In real terms, the average salary was R13,621, R290 less than for April 2018.

“Salary payments through our system indicate that the typical take-home pay was actually closer to R10,730 in May, which showed an increase of 2.8% before inflation from the typical take-home salary of R10,010 in constant 2016 terms. However, with inflation, typical salaries declined with 1.5%,” the group said.

The reason for the dramatic drop, BankservAfrica said, is due to government wage negotiations dragging out longer than they should have.

The public service is the largest employer and the largest single wage bill in South Africa accounting for a total wage bill of just over 25% of the total Non-Farm formal sector wage bill and between 33% and 35% of the total take-home salaries paid by BankservAfrica.

Mike Schüssler, chief economist at Economists.co.za explained that, while the delay in public service wage increases impacted the BTPI downwards, other sectors increased salaries and together with small amounts of tax relief, the nominal value increased with 2.9%.

However, for other large employers, the shrinking economy and low profit margins made large salary increases unlikely with employees feeling the impact of the burden of the current difficult times.

Schüssler noted that the decline in take-home pay puts the BTPI at the same level as in December 2013 with the small gains that the index had made being lost due to the delayed public service wage settlement.

As such May is likely to reflect badly not only for retailers but also for other sectors that rely on consumer spending. He cautioned further that take-home pay levels are likely to remain under pressure until July when the public service wage increases as well as back-pay come into effect.

Read: This is how much the average employee gets paid in South Africa