Government millionaires laughing all the way to the bank in South Africa

 ·17 Apr 2024

The number of government employees earning over R1 million per year has increased by 280% from a decade ago, with almost 38,000 public workers earning six figures in 2024 – and even more when adding all the perks and benefits.

This was revealed in a recent parliamentary Q&A, in which the Minister of Public Service and Administration, Noxolo Kiviet, detailed the government’s employment and compensation data.

Kiviet was asked what the current average salary for each of the 16 salary bands in the Public Service is and the total amount that will be spent annually on salaries in terms of the latest wage agreement in each of the 16 salary bands.

According to the data presented by the minister, these salary levels or bands range from R124,000 (level 1) to R2.2 million (level 16) per year – working out to approximately R10,300 and R180,000 per month, respectively.

Of these salary levels, government employees on levels 12 to 16 earn over R1 million annually, and the data shows there are roughly 37,839 public servants across these levels.

Notably, this is lower that the headcount provided in the 2023 Medium-Term Budget Policy Statement (MTBPS), which counted 55,000 public servants earning over R1 million.

The discrepancy can be explained by the National Treasury’s number counting ‘unit costs’, which includes salaries, pay progression, pension contributions and all other benefits, while the answer from the public service department focuses only on salaries.

This means that when factoring in all the extras, thousands more government workers may earn more than R1 million.

The data further shows that the annual wage bill for these 37,839 government millionaires—footed by taxpayers—is expected to be around R46.9 billion in 2024/25, which includes the 4.7% public sector wage hike for salary level 12 (levels 13-16 have not had adjustments approved).

Interestingly, the data also shows that more than half (57.6%) of all public service employees earn more than the average formally employed South African.

According to the latest Quarterly Employment Survey by Stats SA, the average formally employed South African earns R26,894 per month, which is R322,728 a year.

This means all public employees earning a salary at level 7 and above earn more than the average employee in the formal sector, as their salaries range between R27,300 and R180,000 per month.

South Africa’s government employee wage bill is one of the highest among emerging markets, accounting for a significant share of the country’s gross domestic product (GDP).

Specifically, the wage bill is 3.5% greater than the average of Organisation for Economic Co-operation and Development (OECD) countries.

Over the past decade, the average remuneration per government employee has grown substantially, driven primarily by above-inflation increases for national and provincial employees.

These significant increments occurred during a period of weak economic growth and tightening fiscal constraints, which have further complicated the country’s fiscal challenges.

Godongwana added that consolidated government spending, on average, consistently grew faster than GDP and consolidated revenue, mainly driven by the public-service wage bill, rising debt-service costs and transfers to households.

Treasury noted in its 2023 budget review that the public wage bill is one of the main risks to the fiscal outlook.

By 2026, the public wage bill is expected to increase to R769 billion.

Read: NHI tax hikes are coming

Show comments
Subscribe to our daily newsletter