Great news for anyone earning a salary in South Africa
The latest PayInc Net Salary Index shows that South African salaries are still tracking higher than last year, signalling stronger spending power ahead of the year-end festive period.
The index, which tracks the average nominal net salaries of around 2.1 million South African earners, moved sideways in October 2025, but remained higher year-on-year.
The index held steady at R21,414 in October, maintaining a 1.8% year-on-year increase.
In real terms—taking inflation into account—the index declined by 0.2% month-on-month to R20,685 in October 2025, the fourth consecutive month that real net salaries dipped below year-ago levels.
This reflects the gradual uptick in consumer inflation from 2.7% in March to 3.6% in October.
However, even with the slight decline in October, with consumer inflation averaging 3.2% in the first ten months of 2025, the average real net salary is still up by 1.0% compared to the corresponding period in 2024.
The upward trend in net salaries continued in 2025, with the average nominal net salary up 4% in the first ten months compared to 4.6% in the corresponding period in 2024.
According to an independent economist, Elize Kruger, average consumer inflation is forecast at 3.2% in 2025, compared to 4.4% in 2024.
Meanwhile, industry data suggests an average salary increase of around 5%. This means that 2025 will likely be the second consecutive year of a real increase in earnings.
“This is a welcome tailwind for salary earners, potentially supporting consumption expenditure during the upcoming Black Friday and Festive Season shopping period,” she said.
Supporting data shows that the level of real final consumption expenditure by households in the first half of 2025 was 2.9% higher than in the corresponding period of 2024.
This is significantly higher than the 0.8% GDP growth in the first half of the year.
Job creation is happening, slowly
Adding to the positive news, Kruger noted that analysis of the PayInc data sample shows that additional salaries were paid in 2025, suggesting that more employment opportunities were created in the economy.
This trend is supported by Stats SA’s latest Labour Force Survey, which reported that 248,000 jobs were created in Q3.
However, year-on-year job growth slowed to 109,000, broadly aligning with PayInc data, which shows that a cumulative 125,000 additional salaries were paid in the ten months to October.
“While encouraging, at the current sluggish economic growth rate of around 1%-1.3% per annum, the economy is simply not creating enough opportunities to absorb all new entrants into the job market on an annual basis,” the economist stressed.
Low productivity growth is also driving up cost pressures for businesses, making productivity improvements essential.
“The fact that productivity growth still lags salary growth points to cost pressures at a company level,” Kruger said.
“This will become more pronounced in an environment of low inflation, where the pricing power of companies will probably drift, given the adoption of a new inflation target as the norm for the economy.”
According to the SARB, labour productivity growth in the formal non-agricultural sector decelerated from 1.2% in Q4 2024 to 1.1% in Q1 2025.
Year-on-year growth in non-agricultural output moderated at a slightly slower pace, while employment remained broadly unchanged.
Similarly, growth in nominal unit labour cost in the formal non-agricultural sector moderated from 3.3% in Q4 2024 to 3.0% in Q1 2025.
Year-on-year growth in total remuneration decelerated at a faster pace than non-agricultural output growth.
“An increase in productivity remains an important key to lift company profits and open the door for expansion and job creation down the line,” said Kruger.
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