This is the average take-home pay in South Africa right now
The BankservAfrica Take-home Pay Index (BTPI) has grown year-on-year, indicating a fairly positive year for salaries.
“The nominal average pay fell below the R16,000 mark experienced over the past two months to R15,374 in April. The good news is that this figure is still 5.6% up on a year ago levels,” said Shergeran Naidoo, BankservAfrica’s Head of Stakeholder Engagements.
When adjusted for inflation, the average real take-home pay also ticked up marginally year-on-year to R13,566.
A comparison of the average nominal BTPI for the four months to April to the corresponding period a year prior showed a 6.0% improvement and 0.6% in real terms.
“If sustained throughout the year, 2024 could turn out to be a better year for salaries, unlike 2023 when the average BTPI increased by only 1.2%,” said Elize Kruger, Independent Economist.
The business environment has improved since there has been no load shedding for nearly two months, allowing organisations to increase productivity and lower the cost of production.
A better business environment will help companies pay inflation-related salary increases in 2024.
Year to date, BankservAfrica’s data aligns with the South African Reserve Bank’s projection of an average salary increase of 6.1% for 2024.
With inflation expected to average around 5.1% in 2024, there is a forecast real increase of 1.0% in average wages, which is good news for economic activity this year.
132,000 more salaries were also paid in April 2024 compared to March.
“With South Africa’s unemployment rate at around 33%, any improvement in the job market is welcomed,” said BankservAfrica.
“The elections on 29 May could give rise to a notable increase in casual workers, typically paid on a weekly basis. In three of the past four elections, the estimated number of people receiving weekly salaries during the election month increased by around 48,000 – 65,000.”
The BankservAfrica Private Pensions Index (BPPI), which tracks the pension payments to about 700,000 pensioners, also remained comfortably above year-ago levels in April despite a month-on-month drop.
“The average nominal private pension moderated to R10 639 in April 2024 compared to the previous month’s R10 745, still 6.6% higher than a year earlier,” said Naidoo.
“Similarly, in real terms, the average BankservAfrica BPPI increased by 1.2% in April 2024, compared to a year earlier, sustaining its ongoing track record to beat inflation.”
The data shows that the purchasing power of pensioners, primarily former government officials, has been preserved despite the elevated inflation environment. With R8 billion paid to pensions in April, this category’s financial well-being is important to the economy.
The cumulative value of total take-home pay and private pension payments processed indicates the economy’s overall spending ability, which increased by 5.3% in nominal terms. However, on a non-seasonally adjusted and smoothed basis, it did slip marginally in real terms compared to a year earlier.
“Overall, although mediocre economic growth of 1.1% is forecast for 2024, it will be somewhat better than the 0.6% reflected in the previous year and influenced by notably less load shedding, moderating average inflation, and the anticipated start to the interest rate cutting cycle later this year, albeit an expected measured cutting cycle,” said Kruger.
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