This is the average take-home pay in South Africa right now
Although the monthly BankservAfrica Take-home Pay Index (BTPI) saw another month of growth in February, it was down in real terms from a year ago.
Amidst the improved operating environment, companies increased their employees’ average salaries over the last three months.
“The average nominal take-home pay reached R16,085, which was 4.6% growth on a year-ago and also 2.5% up on January’s R15,692,” said Shergeran Naidoo, BankservAfrica’s Head of Stakeholder Engagements.
“In real-terms, the monthly take-home pay tracked higher at R14,354 in February 2024, slightly below year-on-year levels.”
This year’s business environment is expected to improve following two years characterised by persistent economic challenges, which significantly impacted companies and their ability to pay inflation-related increases.
“While it is still early days, the BankservAfrica data signals 2024 could be a better year for salaries,” said Elize Kruger, Independent Economist.
Although mediocre economic growth is forecast for 2024, it should still be better than 0.6% in 2023.
However, this growth depends on reduced inflation, moderate inflation, and interest rate cuts.
The average nominal BTPI for the three months to February 2024 showed a 6.4% y-o-y increase, broadly in line with the South African Reserve Bank’s forecast of an average salary increase of 6.1% for 2024.
Although CPI ticked up from 5.3% in January to 5.6% in February, the full-year average for 2024 is expected to be around 5.3% – far lower than the 6.9% in 2022 and the 6.0% in 2022.
“With a forecast average salary increase of about 6%, 2024 could be a year of positive real increases in average salaries again, which will see the purchasing power of salary earners improve somewhat compared to the previous two years,” said Kruger.
A lower inflation rate and, in turn, interest rate cuts could also provide much-needed support to households in terms of their spending ability and confidence levels, but this is only expected in the second half of the year.
The BankservAfrica Private Pensions Index (BPPI) increased in both nominal and real terms in February 2024.
“The average nominal private pension increased to R10,774 in February 2024 compared to the previous month’s R10,653, which was 7.1% higher than a year earlier,” said Naidoo.
In real terms, the average BPPI increased by 1.3% in February 2024 compared to a year earlier.
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