Automated clearing house BankservAfrica has published its latest Take-home Pay Index, showing how much the average working South African is taking home after tax right now.
According to the index, February reflected a third consecutive month of real take-home pay increases for formal employees – however, the data also points to the decline in the volume of salaries paid into the National Payments System.
BankservAfrica’s Take-home Pay Index is designed to measure average salary changes. “The average real take-home pay increased by 1.5% year-on-year in February to reach a real average increase of R14,066,” said Shergeran Naidoo, head: stakeholder engagements at BankservAfrica.
This comes as a result of slightly lower inflation and the government’s salary increases that are relatively higher than in February 2018.
However, Naidoo said that the nominal take-home pay declined from January 2019. The value for February was R15,347 and represents a 5.7% year-on-year increase.
According to Mike Schüssler, chief economist at Economists.co.za, “the average salary increases should provide some support for consumer spending in the retail sector”.
Declining number of salaries on SA’s payments system
BankservAfrica’s data pointed to a significant downturn in the total number of salaries paid into BankservAfrica’s payments system.
“Although this could be due to employees being remunerated in cash, cheques or an alternative payments system, the decline suggests something greater at play especially as the salary data reveals personal income taxes (PIT) collected by SARS on a percentage change measure,” the group said.
The total take-home salaries paid into BankservAfrica’s payments system declined by 9.1% in total nominal terms and on a year-on-year basis.
The overall number of employees earning under R100,000 per month declined by 8.4% in February – “this is the eighth consecutive month of declining employees on the system,” Naidoo said.
Schüssler said that fewer higher earners on the system could be due to retrenchment, retirement or payments no longer being made through the banking system.
Impact of load shedding
Load shedding could be another reason for the declining trend, he said.
“In February, the number of days for load shedding may have resulted in some weekly and daily paid employees not being able to work and therefore get paid. It may also have also led to some system changes where, for example, a weekly paid person may have only been paid in the next week along with that week’s wage,” Schüssler said.
“Although employment figures in Q4 2018 improved, BankservAfrica’s salary data points to the decline of salaries paid into the National Payments System since July 2018. While this could be due to the reasons already explained, one must remember that the recent employment figures remain lower than previous years.”
The economist said that part of this improvement is owed to a revision of older employment figures.