Good news for anyone earning a salary in South Africa
Average earnings in South Africa have increased higher than inflation, despite the nation’s employment figures dropping.
However, salary and reward experts warn that employees should temper their expectations for salary hikes in 2025, as the global economy is wrought with uncertainty, making it tough on employers to navigate pay negotiations.
According to Stats SA’s latest Quarterly Employment Survey (QES), average monthly earnings paid to employees increased by 5.6% between February 2024 and February 2025 to R28,289.
This is well above the inflation figures for February, which stood at 3.2%, meaning that South Africans received real increases of 2.4%.
That said, monthly earnings paid to employees are slightly lower than the peak of R28,316 recorded in November 2024.
Gross earnings paid to employees also decreased by R47.3 billion (4.6%) from R1.03 trillion in December 2024 to R983.1 billion in March 2025.
“This was due to decreases in the community services, manufacturing, trade, construction, transport, electricity and mining industries.
Business services reported an increase, with year-on-year gross earnings increasing by R26.1 billion or 2.7% between March 2024 and March 2025.
Basic salary/wages paid to employees dropped by R9.4 billion or 1.1% from R890 billion in
December 2024 to R881 billion in March 2025.
This was due to decreases in the community services, trade, manufacturing, construction, business services, transport and mining industries.
Electricity reported a year-on-year increase of R33.1 billion to March 2025
Bonuses paid to employees decreased by R36.5 billion from December 2024 to R75.8 billion in March 2025, which should be expected as bonuses are generally paid at the end of the year.
Nevertheless, year-on-year bonus payments decreased by R5.7 billion (6.9%) to March 2025. Year-on-year employee overtime also decreased by R1.3 billion (4.7%) to R26.3 billion in March 2025.
Temper expectations for salary hikes
According to the South African Reward Association (SARA), while salary earners are benefitting from the lower inflation levels, they should still temper their expectations for large salary increases in 2025.
The group said that mid-year is often a crucial time for mid-year salary reviews and potential raises, but with the global economy flooded with uncertainty, employers are likely to tread carefully.
“While the inflation outlook has improved over the last few months with CPI averaging 3.0% as at April 2025, there’s a lot happening both locally and globally that impacts employers’ ability to meet everyone’s salary increase expectations,” said Lindiwe Sebesho, ‘reward specialist’ at SARA.
She said employees should manage their expectations by understanding the economic factors at play.
Employers’ ability to increase salaries is influenced by several factors, including national and global economic growth prospects, company performance and affordability, as well as skills market trends.
“Inflation is expected to remain moderate and within the South African Reserve Bank’s 3-6% target range through 2025/26.”
“However, even with recent cuts, interest rates remain high, making debt expensive for individuals and organisations alike, and leaving both employees and employers under financial strain,” she said.
While South Africa dodged the VAT bullet, the increase to the fuel levy will still hit everyone hard, from individual motorists to company and public service fleets.
Expectations of lower fuel prices might offset this cost, but will still have an adverse impact on expenses.
Additionally, rising food costs due to droughts and other climatic factors will put further pressure on budgets.
“Employers will also be hampered by weaker GDP growth than previously predicted, as well as global economic instability fuelled by US President Trump’s on-again-off-again tariffs,” she said.
“Tariffs on South Africa’s trading partners could create unwelcome local inflation, making organisations wary of committing to higher labour costs.”
Considering the current economic circumstances, employers will likely take a more muted approach to salary adjustments, and employees should consider ways of building their pay packages beyond just a salary increase.
Sebesho said that remuneration “isn’t just about money”, but includes benefits and other rewards as well.
“Review your entire remuneration package and ask about non-monetary or money-saving benefits, including how you can flex your retirement benefits to help offset any immediate financial shortfall without compromising your long-term savings goals,” she said.
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