Take-home pay in South Africa has shot up significantly, rising almost 12% year-on-year to R17,202.<\/p>\n\n\n\n
According to BankservAfrica\u2019s latest Take-home Pay Index (BTPI), which tracks the average nominal take-home pay of an estimated\u00a04 million salary earners, workers closed December 2024 on a high note, continuing the growth observed throughout the year.<\/p>\n\n\n\n
The average take-home pay increased by 11.9% year-on-year to reach R17\u00a0202 in December 2024, a significant leap from the R15,367 recorded in December 2023.<\/p>\n\n\n\n
Shergeran Naidoo, BankservAfrica\u2019s Head of Stakeholder Engagements, said the upward momentum in average salaries was evident throughout the year, despite some monthly volatility.<\/p>\n\n\n\n
Independent economist Elize Kruger said the salary boosts were driven by a lot of positive events in 2024, including the suspension of load shedding, the ongoing recovery of businesses, inflation moderating and two interest rate cuts.<\/p>\n\n\n\n
Additionally, company profitability improved further in 2024, evidenced by a gross operating surplus increase that exceeded the average inflation rate.<\/p>\n\n\n\n
\u201cThe BTPI consistently highlighted 2024 as the strongest salary year since 2020,” she said.<\/p>\n\n\n\n
The average nominal take-home pay increased by 7.9% in 2024 \u2013 the highest growth in years. However, this increase comes from a low base, as both 2023 and 2022 were dismal years for take-home pay. <\/p>\n\n\n\n
With inflation moderating notably during 2024, salary earners were better off in real terms in 2024.<\/p>\n\n\n\n
\u201cThis recovery in disposable income has been reflected in healthier retail sales growth. Real growth for the eleven months to November 2024 was 2.4% higher than the corresponding period in the previous year, while passenger car sales also recorded positive growth in 2024,\u201d said Kruger.<\/p>\n\n\n\n
In real terms, take-home pay also tracked higher at R14,887 in December 2024, up by 8.7% on year-ago levels. <\/p>\n\n\n\n
The substantial easing of consumer inflation in 2024, averaging 4.4%\u2014the lowest rate since 2020\u2014has positively impacted the purchasing power of salary earners. <\/p>\n\n\n\n
In 2024, real take-home pay averaged R14,292, up by 3.1%, showing the first increase since 2020.<\/p>\n\n\n\n
Rolling off a great end to 2024, the new year is expected to continue the trend.<\/p>\n\n\n\n
On the economic front, real GDP growth is forecast to increase by 1.7% in 2025, somewhat higher than in 2024, driven by a combination of improved household consumption expenditure, higher fixed investment spending, and advances in structural reforms, the group said. <\/p>\n\n\n\n
Looking at reforms, the on ongoing focus on improving South Africa\u2019s electricity generation capacity, addressing supply chain blockages relating to freight rail and port operations, and upgrading water infrastructure will help drive the economy. <\/p>\n\n\n\n
The anticipated improvements could see companies offer more substantial salary increases in 2025<\/strong>.<\/p>\n\n\n\n BankservAfrica said that the improving purchasing power seen in 2024 will likely continue into 2025, providing relief to cash-strapped households and support for consumer spending.<\/p>\n\n\n\n Consumer inflation moderated notably in 2024, from 5.3% in January to end the year at 3%. <\/p>\n\n\n\n With an average headline inflation of 4.4% in 2024 and an expectation of a similar average of 4.2% for 2025, multiple years of real increases in average salaries are expected, leaving more room for spending. \u00a0<\/p>\n\n\n\n South Africans are also in for another 25 basis point cut to interest rates on Thursday (30 January), which will bring even more relief and savings to household budgets.<\/p>\n\n\n\n According to the latest Quarterly Bulletin of the South African Reserve Bank, the average nominal salary increase in H1 2024 was 5.2% compared to a full-year average of 4.5% in 2023. <\/p>\n\n\n\n Assuming a 1.5% real increase and average consumer inflation of 4.2% are realised, average salary increases could be around 5.7% in 2025, according to Kruger. <\/p>\n\n\n\n This will, however, depend on the employer\u2019s financial health, the employee\u2019s performance, and talent retention goals.<\/p>\n\n\n\n \u201cWith all these positive movements, looking ahead to 2025, salaries are expected to continue building on the gains achieved in 2024,\u201d Kruger said.<\/p>\n","protected":false},"excerpt":{"rendered":" Take home pay in South Africa shot up in the past month\u2014with economists expecting a great year for salaries in 2025.<\/p>\n","protected":false},"author":10,"featured_media":808603,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9880],"tags":[1976,1439,21576],"class_list":["post-809242","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-wealth","tag-bankservafrica","tag-salaries","tag-take-home-pay"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/809242","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=809242"}],"version-history":[{"count":2,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/809242\/revisions"}],"predecessor-version":[{"id":809254,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/809242\/revisions\/809254"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/808603"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=809242"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=809242"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=809242"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}