Monthly take-home pay reflected a slight decline for February, according to BankservAfrica’s latest monthly data.
The data found that take-home pay averaged at R14,502 in February 2018.
“Take-home pay increased marginally by 0.5% in real terms on a year-on-year basis compared to the monthly 1.1% registered for January,” said Shergeran Naidoo, head of stakeholder engagements at BankservAfrica.
Take-home pay was at R14,675 for January 2018.
“It is evident that the salaries adjusted for inflation resulted in ‘bracket creep’ into higher personal income tax brackets,” added economist Mike Schüssler.
“Therefore, while employees’ earnings seemed to improve with salary increases, in real terms the movement into higher tax brackets resulted in a more muted growth in take-home pay.”
With new taxes and tax laws coming into play from 1 April 2018, South Africans should expect take-home pay numbers to change rather significantly overt the next few months.
The biggest tax change that will affect South Africans across all levels of income is the the VAT hike from 14% to 15%, which will impact everything from shelf prices to everything along the value chain.
Other big tax hikes that are incoming are the fuel levy and Road Accident Fund levy which will also increase by a combine 52 cents, as well as the introduction of the long-awaited sugar tax.
The full effect of these tax changes on take home pay will only become evident in BankservAfrica’s April review, which will be published in May 2018.