How much you need to earn to be middle class in South Africa

 ·10 Jul 2023

Defining who qualifies as ‘middle class’ is an arduous task in South Africa, with many researchers and economists having differing determinations in light of the diverse and significant disparity between those who have and those who do not.

Currently, there is no official determination of the middle class.

What adds to the challenge of determining who falls within the middle class is that its definition must be considered in the context of the whole population.

With an unemployment rate of 32.9% in the first quarter of this year, those who take home even R1 rand a month through a job are considered part of the 16.2 million employed.

If one was to look at the average salary in South Africa across the formal sector as a metric of the middle class, Stats SA data shows that currently, it is R25,304 per month.

The latest figures from the statistics agency’s quarterly employment survey showed a 2.7% decrease from the final quarter of 2022, which was roughly R26,000.

The new average salary is, however, 6.8% up from the first quarter of 2022 R23,697.

Multiple sources regard an income of just above R20,000 as middle class. For example, the University of Cape Town’s Liberty Insitute of Strategic Marketing argues that those earning roughly R22,000 makes a household middle class.

Research and analytics firm Eighty20 in its latest Credit Stress Report defined middle-class workers as those households with an income of nearly R25,000 a month and a personal income of R15,000.

The group added that the category includes the 4.1 million income, credit-active people with families, mortgages and frequent shopping trips.

Similar to the determination of Eighty20 mentioned above, the Bureau for Economic Research (BER), in its latest report on consumer confidence, regarded a household with earnings of between R5,000 and R20,000 per month as a middle-income household.

BER regarded households with monthly earnings above R20,000 as high-income households.

A common thread between the different definitions of the middle class is the fact that the segment is currently under severe financial strain in light of high food inflation, electricity outages and rapid interest rate hikes since November 2021.

Steep interest rate hikes totalling 425 basis points since the start of the rate cycle in late 2021 have made it increasingly difficult for middle-class South Africans to pay off the loans taken out on their biggest assets which, according to DebtBusters, are their bond as well as their vehicle asset financing.

Eighty20 said that financial burdens are making it increasingly crucial for middle to lower-income segments to be frugal and change their consumer behaviour or even limit their credit access.

An alternative method of determining middle class

As previously mentioned, a specific monthly income is not always a determining factor of whether a person is middle class; it can often be the assets they hold or the household they have.

WhyFive Insight’s recent study on mid to top-income consumers’ lifestyles, perceptions and consumer behaviours found that having a pet is an interesting indicator of wealth in South Africa.

Brandon de Kock from WhyFive Insights said: “There’s at least one dog, most probably more, in around 2 million middle-class South African homes”

“There’s a general trend here showing that the wealthier the household, the more likely it is to be a doggie house. However, it’s not as radical as you may think. There’s a solid stack of mid-income earners who, it seems, are willing to make the budget stretch so that they can enjoy being dog owners,” he said.

He added that rising food and healthcare costs impact pet owners too, and having more money does help when you have more mouths to feed and bodies to care for – including animals.

Read: Water meter headache for South African households

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