What you need to be worth and earn to be in South Africa’s richest 10%

 ·5 Feb 2018

UK think tank Oxfam late last month published a report highlighting the disparate levels of inequality in the world.

Among many of the claims within the report, one pointed directly to South Africa, where the group said that the top 10% of South Africans receive half of all wage income, while the bottom 50% of the workforce receives just 12% of all wages.

The Oxfam report roots its findings in the data contained in the latest Global Wage Report from the International Labour Organisation, as well as some data from the Credit Suisse Wealth Report.

According to the ILO, South Africa has the highest levels of inequality in its wage distribution when compared to its peers, as outlined in the table below.

But what levels of wealth and earnings will put you in that 10%?

By Credit Suisse’s own admission, no country in the world has a single comprehensive source of information on personal wealth, making finding the answer a bit tricky. However, the finance group’s report is as complete as one will find with the data available.

South African wealth

For its findings on wealth distribution, Credit Suisse considers net wealth – that is, a person’s total asset value, minus debt.

For this reason, the lowest income decile of the population can have a negative net worth, significantly changing where one would expect wealth distribution to lie.

As an example: an individual with R500 to their name and with zero debt is considered to be wealthier than a person who has assets worth R500,000, but is R500,001 in debt.

Looking at South Africa, according to Credit Suisse’s data, there are 34.8 million adults in South Africa, with the average level of net wealth sitting at $21,850 (R261,250) per adult.

The average South African adult carries financial and non-financial assets totalling $26,387 (R315,500), while carrying $4,537 (just over R54,250) in debt.

The vast majority of adults in the country have a net worth below $10,000 (R120,000), however, pointing to the massive levels of inequality in the country – especially considering the median net worth is just over R62,000.

The data shows that the country’s total net worth among all adults was recorded at $761 billion (R9.1 trillion) at the end of 2017.

The top 10% – the richest decile – controls 75% of this wealth, with the top 5% controlling 65.2%, and the top 1% controlling 41.2%.

Put another way, some 3.4 million people control R6.83 trillion of the country’s net wealth.

This means that if you have net wealth levels of around R2 million, you’re probably well rooted within the richest 10% of adults in South Africa.

Wealth group No. of adults % of total wealth Net wealth per group Net wealth per adult
Top 10% 3 483 400 75.0% R6.825 trillion R1.96 million
Top 5% 1 741 700 65.2% R5.933 trillion R3.41 million
Top 1% 348 340 41.2% R3.749 trillion R9.75 million

On a global scale, Credit Suisse estimates that 84,000 South Africans are members of the top 1% of global wealth holders, and that 58,000 are US dollar millionaires.

Top 10% Earnings

But wealth levels and income levels are not the same thing. So to try and determine what the upper echelons mentioned by Oxfam are earning, we looked at the country’s tax stats.

However, here things become more cloudy, as the ‘entry’ to the top 10% differs depending on which portion of the population you’re looking at – starting at anywhere from R29,000 a month to R41,000 a month.

Tax data shows there are just under 14 million registered tax payers, but government projections are that only half of those will actually pay tax.

So to be part of the top 10% of registered taxpayers (the top earning 1.4 million people) you must fall within the taxable income group of around R350,000 annually, or R29,000 per month.

To be in the top 10% of actual taxpayers (top 700,000 earners), this entry point is a bit higher at R500,000 – or earning over R41,000 a month.

However, when looking at the top 10% among all South African adults (ie, 10% of the 35 million adults as reported by Credit Suisse), the starting bracket for the top 10% of earners is at a mere R130,000 per year, or around R10,800 a month.


Read: South Africa’s richest take home half of all income: report

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