The number of take-home payments into bank accounts decreased in October, according to the latest BankservAfrica Take-home Pay Index.<\/p>\n
This could be a result of the weak economy – where salaries are unable to keep up with the rate of inflation \u2013 and the lower employment figures.<\/p>\n
“Take-home pay for October decreased on both an annual and monthly basis with the annual rate of decline down by 1.3%, which was in part due to the slightly higher inflation and the lower measured take-home pay,” said Shergeran Naidoo, head of stakeholder engagements at BankservAfrica.<\/p>\n
Real take-home pay was R13,918<\/strong> for October – the lowest in four months.<\/p>\n The current payments numbers were lower than previous months due to the backdated payment payouts having taken place in previous months. However, the annual recorded decline is not what one would have expected, BankservAfrica said.<\/p>\n \u201cWhile there is no real reason for the decline, it is evident that the amount people were paid into the bank declined for October,\u201d said Mike Sch\u00fcssler, chief economist at Economistscoza.<\/p>\n Without taking inflation into account, take-home pay increased by 3.7%. But with inflation, formal sector employees were, on average, 1.3% worse off than a year ago, said Naidoo.<\/p>\n There was also a continued decline in the number of estimated people paid via the South African national payment system.<\/p>\n On a three-month moving average basis, the number of estimated employees declined six out of the last seven months.<\/p>\n \u201cAlthough the BankservAfrica Take-home Pay Index is not designed to measure the number of employees, the fact that our sampling methodology continues to record declines correlates to the weakening employment numbers,\u201d” said Sch\u00fcssler. This is confirmed by Stats SA\u2019s Quarterly Employment Survey.<\/p>\n There are two likely reasons for this decline such as that most of the private sector did not get salary adjustments that fully compensated for inflation, resulting in tax brackets not fully adjusting for inflation.\u00a0 This has left employees worse off.<\/p>\n The other likely event is the retrenchment of employees in the middle-income bracket, which could be impacting the decline of take-home pay in real terms.<\/p>\n Sch\u00fcssler pointed out that the number of people at the bottom bracket has been in decline for some time. While employees taking home between R10,000 \u2013 R25,000 per month have increased, this rose slightly in October by just under 0.2%. Even with increases of 3.7% overall, the number should have been around 3-4%.<\/p>\n Those taking home between R25\u00a0000 – R50\u00a0000 increased by 3.6% in number which one would expect when overall salaries increased by 3.7%. \u201cIt appears that some retrenchments have taken place in the middle take-home pay categories,\u201d saids Sch\u00fcssler. \u00a0This category was increasing in double digits until May 2018, he said.<\/p>\n
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