How much money you need to earn to be in the top 1% in South Africa

Bloomberg has published a series of graphs showing what it takes to be in the top 1% around the world in 2020.

The graphs are based on a variety of data sources including the World Inequality Database, KPMG’s worldwide tax data and the Knight Frank Wealth report.

The data shows that the top 1% covers a wide span, from prosperous professionals to billionaires with more wealth than many nations. And the difficulty of making the cut varies greatly depending on where you live.

To join the group in the oil-rich United Arab Emirates requires more than $900,000 (R13.5 million), or 12 times more income than in India, a developing market so populous that the top 1% includes more than 13 million souls.

In much of the developed world, an income of $200,000 to $300,000 (R3 million – R4.5 million) gets you in the top 1%.

In South Africa, the number is currently set at $188,000 (R2.8 million) for annual pre-tax income. This is up from $162,000 (R2.21 million:2019) annual pre-tax income in 2019.

“In the US, the wealthy have been pulling away from the middle and working classes, whose incomes have barely grown for the past couple of decades,” Bloomberg said.

“Inequality is widening even within the ranks of the top 1%. While it takes about $500,000 per year to enter the top 1% of Americans, reaching the 0.1% now requires an annual income of more than $2 million. The threshold for the 0.01% is more than $10 million.”

How much they pay in taxes

Part of this disparity may be explained by the respective income tax rates in these countries.

France, Austalia, China, the UK and South Africa all have a top marginal tax rate of more than 40%, while citizens in Bahrain and the UAE pay no marginal tax rate at all.

Singapore and Monaco have turned also themselves into tax shelters where the well-off can live and invest under a lighter tax and regulatory burden.

“In most of the world, though, politicians use taxes to try to level the playing field between the wealthy and everyone else. In many nations with a progressive income tax, the highest rates apply only to the richest portion of the 1%,” Bloomberg said.

Read: 30 top jobs in South Africa that pay more than R2 million a year

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How much money you need to earn to be in the top 1% in South Africa