Take-home pay recovered in March following the declines experienced in 2016, when the rate of growth for wages failed to keep up with inflation, according to BankservAfrica’s latest monthly data.
Nominal average take home pay increased to R14,586 (compared to R14,539 in February), while real take-home pay rose to R13,941 (compared to R13,860 in February).
“While March 2018’s improvement cannot be described as exceptional – due to the increase being rather slow and dependant on lower inflation – the fact is that South Africans employed in the formal sector are better off with real take-home pay increasing by 0.9% year-on-year in March 2018,” BankservAfrica said.
“The average salary is edging up with the typical – or median – salary faring a little better and increasing by 2.2% since March 2017 above the rate of inflation.
“Salary increases for employees in the middle of the income distribution shows the impact of effective tax increases on higher income earners per year as the average take-home pay has shown lower increases than the typical take-home pay. In the past year, typical take-home pay has increased by 0.8% more than the average,” it said.
BankservAfrica added that March is usually ‘performance bonus month’ and follows on from December’s year-end 13th cheque pay-outs.
It noted that the proportion of employees receiving between R50,000 – R100,000 increased to 2.5% of the total in March compared to 2.1% in March 2017.
“In addition, this is the first time since December 2017 that the number of people taking pay home in this range were over 75,000 employees out of over 3 million employees. The number of employees receiving between R50,000 – R100,000 increased by 17.1% since March 2017,” it said.
At the same time those earning less than R4,000 decreased by 6.8% over the same period, BankservAfrica found.
“In March 2018, employees with take-home pay of over R25,000 per month were more than those earning under R4,000. Therefore, take-home pay for those earning between R4 000 – R25 000 was still the dominant category at 44.9% (other than in December, which is the highest bonus pay-out month),” it said.
“Over 55% of employees paid via the South African National Payment System received a take-home pay of over R10 000.
This does, however, represent a bias to larger employers and excludes those who receive actual cash. The growth in those receiving more than R10,000 in their bank account has been close to 9% on average over the last year,” it said.