The reality of disposable income in South Africa – we’re getting poorer

While the salary figures on pay slips may have increased over the past two years – in real terms, the average South African is poorer than they were at the start of 2015.

Financial institution Bankserv recently released its Disposable Salary Index (BDSI), detailing how much disposable income South Africans are left with each month.

The data is based on BankservAfrica transaction data and represents around three million people out of a formal workforce of 8.3 million using the Quarterly Employment Survey (QES) from Statistics South Africa as a guide.

“Real salary adjustments in December reflected the longest – and fastest – decline since the BankservAfrica BDSI data started in 2011,” said Dr Caroline Belrose, head of Information Services at BankservAfrica.

On a year-on-year level, disposable salaries in December 2016 were lower than December 2015 and 2014.

In January 2015, the average nominal disposable income was R12,808 – R11,506 in real terms. Fast forward to December 2016, where Bankserv’s data shows nominal salaries had increased to R14,102 per month, but in real terms actually decreased to R11,309.

Belrose said that the 1.5% decline is likely to impact consumers with income pressures resulting in reduced spend on major purchases such as cars, houses and furniture.

“There is no doubt that most consumers were under pressure for most of 2016 and parts of 2015. The December BDSI suggests that this will continue in Q1 2017 as overall consumer expenditure is expected to remain subdued with lower than inflation salary increases likely to continue in the next few months,” said Mike Schüssler, chief economist at Economists dotcoza.

However, as 2017 increases will be based on higher inflation in 2016, the real declines should stabilise as soon as the annual salary increases are implemented around the March to April period, the economist said.

This is how nominal vs real salaries have changed since January 2015:

Month Nominal Ave Disposable Salaries Real Disposable Salaries
Jan-15 R12 808 R11 560
Feb-15 R12 576 R11 279
Mar-15 R12 271 R10 850
Apr-15 R11 996 R10 514
May-15 R12 322 R10 771
Jun-15 R12 551 R10 924
Jul-15 R12 965 R11 167
Aug-15 R13 052 R11 242
Sep-15 R13 005 R11 201
Oct-15 R12 954 R11 129
Nov-15 R12 969 R11 132
Dec-15 R13 413 R11 484
Jan-16 R13 710 R11 648
Feb-16 R13 432 R11 259
Mar-16 R13 012 R10 825
Apr-16 R12 877 R10 624
May-16 R13 142 R10 825
Jun-16 R13 266 R10 865
Jul-16 R13 488 R10 957
Aug-16 R13 484 R10 963
Sep-16 R13 755 R11 165
Oct-16 R13 413 R10 834
Nov-16 R13 624 R10 970
Dec-16 R14 102 R11 309

According to a Stats SA report released in 2016, the average monthly salary at the end of 2015 was R17,517 per month, including bonuses and overtime.


 Read: How much you should be earning in your 40s in 2017

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The reality of disposable income in South Africa – we’re getting poorer