BankservAfrica has released its latest disposable salaries index (BDSI) for September, showing that the average monthly South African salary has declined – year-on-year – for the first time in seven months.
According to the BDSI, the average real seasonally adjusted banked salary was R13,964 (R14,139) in September 2017, reflecting a 1.2% drop, year on year.
In nominal terms, the take-home salary averaged at R14,255 (2016: R13,925).
Month-on-month, take-home pay for employees earning less than R100,000 per month was up 1.1% from the average R14,106 in nominal terms during August, which was down slightly from the R14,177 recorded in July.
This is due to the higher rate of inflation, resulting in disposable salaries declining by over 1.3% in this period, the group said.
“While the latest changes do not necessarily point to the declining trend of take-home pay levels, they do suggest that the lower rate of growth is becoming the norm on both a nominal and real term basis,” said Mike Schüssler, chief economist at Economists dotcoza.
The difficult economic conditions in the country at present are impacting firms and their ability to pay high salaries. Effective tax rate on gross salaries is also a toll.
“The sluggish economic growth is slowing down government revenue, resulting in public sector wages being below inflation. The private sector is experiencing the same issue with salaries,” Schüssler.
Due to the slowdown of government revenue and the impact of the tax rate on gross salaries, consumer spending is expected to decline for retail sales, vehicle sales, tourism and dining out in the coming months.