South Africa’s nominal take-home pay increased by 8.1% year-on-year in August 2021, according to the BankservAfrica Take-home Pay Index (BTPI). In real terms, the increase was a more muted 3.2% – the fastest real increase since July 2020.
The average nominal take-home pay as calculated via the BankservAfrica system was R15,125 in August. In real 2016 terms, the average take-home pay was R12,317.
“In effect, this means inflation has taken away R2,808 (19%) of the R15,125 nominal pay,” BankservAfrica said. “Although August is probably not the best month to compare the inflationary impact on salaries – due to the overall pandemic and lockdown period – it is interesting to observe that take-home pay levels, in real terms, in August 2021 is lower than any August between 2016 to 2019.
“Salaries have stagnated as the take-home component has only kept up with inflation over the last year – mainly due to a drop in the number of lower-paid employees. Further to this, the number of people in the BTPI seems to have increased every August between 2016 and 2020.”
The group noted that July 2021 and August 2021 were not great months for formal employment.
“We hope that the fall in the number of paychecks is temporary. The BTPI will continue following the numbers closely to assess how fast the bounce back will be. We hope that the previous, small but significant increasing trend will make a comeback. For a while, this seemed to be the case as employment jumped back to 2% of previous levels.
“But the unrest in July has put a stop to that trend,” it said.
The cumulative total take-home pay paid in August 2021 was 1.4% lower in real terms. This is likely to reflect in consumer spending numbers, such as retail sales, the automated clearing house said.
The nominal increase in take-home pay was the highest since January 2020. However, in most months of significant increases in average salaries, there has been a sizeable decline in the number of lower-paid employees, BankservAfrica said.
Similar to the BTPI’s July 2020 figures, there was a substantial fall in the number of payments for casual employees. In August 2020, there were about 140,000 casual payments compared to August 2021, where there were 115,000.
This 18% drop could have transpired from the unrest in July 2021, BankservAfrica said.
“Weekly payments decreased by 2%, which translates into 8,000 employees losing their wages. While payments for lower salary employees decreased, the opposite was tracked for those taking home more than R7,000. Monthly payments decreased but within the monthly variance at 1.3%.
“The lockdown period has shown us that the salary movements are usually reflected in our data sooner than retrenchments, which feature about a month later. On this basis, we conclude that the number of salaries paid in August 2021 is a clear reflection of the July payroll numbers,” it said.