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The Citizen
25-06-2025
- Business
- The Citizen
Take-home pay slides for third month with grim job opportunities and earnings
Are you earning the average take-home pay of R17 296 and is it enough to cover all your expenses or are you affected when it decreases? The average take-home pay slowed for the third consecutive month in May, reflecting the impact of a subdued economic environment with stalled growth in the first quarter and a weakening global outlook, currently fuelled by the heightened volatility in the Middle East. According to the latest BankservAfrica Take-home Pay Index (BTPI), which tracks approximately 3.8 million salary earners in South Africa, the nominal average take-home pay decreased to R17 296 in May, 1.3% lower than the R17 532 registered in April, Shergeran Naidoo, BankservAfrica's head of stakeholder engagements, says. However, this figure remained significantly higher than the R15 903 recorded in May 2024. 'The upward trend in take-home pay from mid-2024 to early 2025 has been a positive development. However, recent months reflect a U-turn, with 2025 proving to be a volatile year so far, marked by multiple global shocks accompanied by a good dose of local challenges,' Elize Kruger, an independent economist, says. 'Downward revisions to global as well as local economic growth prospects have lowered confidence levels and put a pause on investment decisions, as investors and households hold back on their spending decisions. Together, these could hurt employment and earnings prospects of salary earners in the coming months.' ALSO READ: Capitec CEO tops banking pay charts — but how do staff salaries compare? A look at how SA's top five banks pay Quarterly Employment Statistics show average take-home pay of R28 289 According to the Quarterly Employment Statistics for the first quarter of 2025, the average monthly earnings paid to employees decreased by 0.1% from R28 316 in November 2024 to R28 289 in February 2025. According to the BTPI, take-home pay, adjusted for inflation, increased by 1.1% in May to R14 832 compared to R15 003 in April, but remained 5.8% higher than year-ago levels. 'The significant moderation in consumer inflation continues to have a positive impact on salary earners and their purchasing power, with the latest headline inflation figure for May 2025 at only 2.8%. 'However, the recent spike in international oil prices, due to the escalating conflict in the Middle East, could result in higher-than-expected headline inflation in the coming months and into 2026, Kruger says. She points out that the international Brent Crude Oil price increased to around $78/barrel after the US's attack on Iran's nuclear facilities, but talks about a ceasefire quickly triggering a reversal with oil prices dipping below $70/barrel again. 'Against expectations and despite the global volatility, the rand exchange rate remained notably resilient, providing a marginal offset of the higher oil prices on fuel price expectations. With the daily under-recovery at pumps running between R1.50/l for petrol grades and R2.70/l for diesel in recent days, it is clear that economic pain is on the radar for salary earners and the economy at large.' ALSO READ: Take-home pay increases significantly in 2024 Petrol increases coming that will affect take-home pay Kruger points out that petrol prices are forecast to increase by about R1/l and the prices for diesel by R1.30/l on 2 July, and further increases could be expected in August. 'These will push headline inflation upwards towards 5% by year-end, ahead of the 3.6% forecast for 2025. 'Concerningly, with the higher base calculation of 2025, the forecast average headline inflation for 2026 could be well above 4.5%, eroding the positive effects of lower inflation and likely triggering more conservatism from the South African Reserve Bank (Sarb). 'Any further monetary loosening looks unlikely at this stage, considering that the Middle East conflict is intensifying and the resultant negative impact on local fuel prices. Still, despite the negative developments outlined, 2025 is expected to be the second consecutive year of positive real take-home pay growth, supporting demand in the economy.' ALSO READ: Salary survey shows gap between increases and inflation narrowing Remchannel survey shows average salary increased by 5.82% in 2025 Meanwhile, the Remchannel Salary and Wage Movement Survey, a biannual report by Old Mutual published in April 2025, indicated that the average salary increased by 5.82% in 2025, compared to 6.09% in the previous year. Kruger says this trend suggests a more cautious approach by employers, who must also prioritise cost control amid a constrained economic environment. Interestingly, she says, the report revealed a reduced overall staff turnover rate of 13.5%, reflecting a market with fewer new job opportunities due to widespread downsizing by companies. She emphasises that this data confirms the financial pressures employees live with, as 39% of those who resigned were seeking better pay and career growth, while 31% left due to dissatisfaction with their current roles. 'With the local economy stalling in the first quarter and the weakening global backdrop adding to the downside scenario, the prospects of favourable earnings and employment opportunities have dimmed. ALSO READ: Salaries decreased by 2% in April, but higher than a year ago Policies must foster rather than deter employment in SA 'The latest Quarterly Employment Statistics survey released by Statistics SA indicated that total employment in the formal non-agricultural sector decreased by 74 000 in the first quarter of 2025, with employment falling from 10.65 million people in December 2024 to 10.58 million people by March 2025. 'According to the survey, 95 000 jobs were lost between March 2024 and March 2025. The Labour Force Survey, which also included the informal sector, agricultural sector and employment in households, echoed the pressure, showing that the unemployment rate ticked higher to 32.9% in the first quarter, with 291 000 job opportunities lost. 'The unemployment situation in South Africa remains a crisis and deserves to be one of the top priorities of government. It is imperative that government pushes forward on structural reforms across sectors such as energy and logistics. 'This could contribute towards solving our local predicaments, lifting the local economy's medium-term growth potential, but government must also ensure that policies and laws will foster rather than deter employment in South Africa.'
IOL News
25-06-2025
- Business
- IOL News
Take-home pay slides for the third month as job opportunities and earnings outlook remain grim
The nominal average take-home pay declined to R17 296 in May, 1.3% lower than the previous month as job opportunities and earnings outlook remain grim. Image: File The nominal average take-home pay declined to R17 296 in May, 1.3% lower than the previous month as job opportunities and earnings outlook remain grim, according to the latest BankservAfrica Take-home Pay Index (BTPI). The index tracks approximately 3.8 million salary earners in South Africa. However, this figure remained significantly higher than the R15 903 recorded in May 2024. This was third consecutive month that take-home pay slowed reflecting the impact of a subdued economic environment with stalled growth in quarter and a weakening global outlook, currently fuelled by the heightened volatility in the Middle East. Elize Kruger, an independent economist, said, 'The upward trend in take-home pay from mid-2024 to early 2025 has been a positive development. However, recent months reflect a U-turn, with 2025 proving to be a volatile year so far – marked by multiple global shocks accompanied by a good dose of local challenges." BankservAfrica said downward revisions to both global and local economic growth prospects have lowered confidence levels and put a pause on investment decisions, as both investors and households hold back on their spending decisions. Together, these could hurt employment and earnings prospects of salary earners in the coming months. In real terms, take-home pay, adjusted for inflation, moderated by 1.1% month-on-month to R14 832 in May 2025, compared to R15 003 in April, but remained 5.8% higher on year-ago levels. The significant moderation in consumer inflation continues to have a positive impact on salary earners and their purchasing power with the latest headline CPI figure for May 2025 at only 2.8%. However, the recent spike in international oil prices - due to the escalating conflict in the Middle East - could result in higher-than-expected headline CPI in the coming months and into 2026. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad loading Petrol and diesel prices are forecast to increase by about R1/l and R1.30/l, respectively on July 2, and further increases could be expected in August. These will push headline CPI upwards towards 5% by year-end, ahead of the 3.6% forecast for 2025. Concerningly, with the higher base calculation of 2025, the forecast average headline CPI for 2026 could be well above 4.5%, eroding the positive effects of lower inflation and likely triggering more conservatism from the South African Reserve Bank. 'Any further monetary loosening looks unlikely at this stage, in light of the intensifying Middle East conflict and the resultant negative impact on local fuel prices. Still, despite the negative developments outlined, 2025 is expected to be the second consecutive year of positive real take-home pay growth, supporting demand in the economy,' says Kruger. Meanwhile, The Remchannel Salary and Wage Movement Survey, a biannual report by Old Mutual published in April 2025, indicated the average salary increased by 5.82% in 2025, compared to 6.09% in the previous year. This trend suggests a more cautious approach by employers, who must also prioritise cost control amidst a constrained economic environment. BankservAfrica said interestingly, the report revealed a reduced overall staff turnover rate of 13.5%, reflecting a market with fewer new job opportunities due to widespread downsizing by companies. This data confirms the financial pressures employees are under, as 39% of those who resigned were seeking better pay and career growth, while 31% left due to dissatisfaction with their current roles. BUSINESS REPORT Visit:
IOL News
28-05-2025
- Business
- IOL News
South Africa's take-home pay growth slows as interest rate decision sooms
Average take-home pay in South Africa decelerated for the second consecutive month in April, intensifying focus on the interest rate decision by the SA Reserve Bank scheduled for Thursday. Average take-home pay in South Africa decelerated for the second consecutive month in April, intensifying focus on the interest rate decision by the SA Reserve Bank (SARB) scheduled for Thursday. The BankservAfrica Take-home Pay Index (BTPI), tracking salaries of approximately 3.8 million workers, reported a nominal average take-home pay of R17 495 in April, down 2.0% from R17 846 in March. Despite this slowdown, pay remains 13.8% higher than the R15 370 recorded a year ago. Shergeran Naidoo, BankservAfrica's head of Stakeholder Engagements, noted that while take-home pay has seen gains since mid-2024, recent global and domestic economic pressures are dampening momentum. 'The upward trend in salaries marked a positive shift after years of stagnation, but escalating global trade tensions are weighing on confidence, slowing economic activity,' Naidoo said. Real take-home pay, adjusted for inflation, also declined by 2.2% to R15 005 in April from R15 344 in March, though it remains above year-ago levels. Independent economist Elize Kruger noted that South Africa's consumer inflation, which dropped to 2.8% in April 2025, has bolstered purchasing power. 'With headline CPI projected to average 3.4% in 2025, down from 4.4% in 2024, we're seeing the lowest inflation since 2020's 3.3%,' Kruger said. She attributed this to a stronger Rand and falling international oil prices, which are expected to drive further fuel price cuts in June despite a recent fuel levy hike. However, economic challenges persist. Early data suggest South Africa's quarterly 2025 real gross domestic product growth may be flat or negative, reflecting global trade war impacts and subdued domestic demand. The repo rate, currently at 7.5%, translates to a real repo rate of 4.1% - well above the neutral rate of 2.8%. This restrictive monetary stance, combined with unchanged tax brackets and new levies from the 2025 National Budget, continues to squeeze households. Kruger said a modest 25 basis-point rate cut at the upcoming SARB Monetary Policy Committee meeting could provide relief. 'Lowering borrowing costs would ease pressure on households and businesses, potentially boosting confidence and investment,' she said. However, she cautioned that a more aggressive cut is unlikely given the SARB's cautious approach. Global trade disruptions and sluggish local growth have trimmed economic forecasts, raising concerns about job and income prospects. Kruger stressed the need for structural reforms to address energy, logistics, and governance bottlenecks. 'These reforms are critical to unlocking growth and shielding the economy from external shocks,' she said. The low inflation environment, supported by a recovering Rand and cheaper oil, offers the SARB room to ease monetary policy, following the lead of other developed and developing economies. Yet, debates over lowering the inflation target band could delay relief. 'Prolonged high interest rates are punishing the economy unnecessarily,' Kruger warned. As South Africans await the SARB's decision, the slowdown in take-home pay underscores the delicate balance between fostering growth and managing inflation. With global uncertainties looming, the central bank's next steps will be pivotal for salary earners hoping for financial respite. BUSINESS REPORT Visit:
IOL News
24-04-2025
- Business
- IOL News
BankservAfrica's indices reveal mixed signals for South Africa's economy in March
BankservAfrica Take-home Pay Index (BTPI) expected to be released on Thursday showed a slight dip in March 2025; however, BankservAfrica believes the broader trend has maintained its upward momentum BankservAfrica's much-anticipated Take-home Pay Index (BTPI) is set to reveal a small dip for March 2025, marking a slight retreat in the wage landscape of South Africa. Nonetheless, analysts at BankservAfrica asserted on Wednesday that the overall trend remained upward, buoyed by improving economic conditions in recent months, challenging the prevailing headwinds of escalating global trade tensions and increasing political uncertainty at home. Earlier this month, BankservAfrica showcased its Economic Transaction Index (BETI), which displays the standardised value of all economic transactions in the South African economy at seasonally adjusted real prices (2005=100). Notably, the BETI indicated a modest recovery in March 2025, with some crucial adjustments accounting for recent fluctuations. Shergeran Naidoo, BankservAfrica's Head of Stakeholder Engagements, reported that the BETI rose to an index level of 137.1 for March, reflecting a growth of 0.3% from February's figure of 136.6. Despite this marginal increase, it remains slightly below the January level of 137.2. Importantly, this annual data still suggested a healthier purchasing environment, driven by a headline inflation rate of 3.2%, which facilitates an increase in real wages and thus supports consumer buying power, in tandem with decreasing fuel prices and lower interest rates. "However, concerningly, this level fell slightly below the 137.2 recorded in January," Naidoo said. "Despite the mostly sideways movement, the BETI remains 2.8% above a year earlier, reflecting the favourable retail environment driven by headline inflation at 3.2% - supporting an increase in real wages and purchasing power - in addition to the fuel price drop and the interest rate at 75bps lower than a year earlier." However, independent economist Elize Kruger warned that the BETI's performance still suggested the economy was "stuck in muddling-along mode". This stagnant growth, marking a continuous pattern since mid-2024, raises alarms about South Africa's overall economic resilience, especially as population growth continues to outstrip economic progress. "The lack of momentum in economic growth is concerning, as the economy remains on the back foot, with population growth outpacing economic growth, minimal progress on employment, a precarious fiscal position, and limited capacity to absorb unexpected shocks – especially given current global developments," Kruger said. Meanwhile, BankservAfrica said that while it was still early days to measure the full impact of recent developments, Carpe Diem Research Services had revised the real GDP growth forecast for 2025 to 1.0% from the previous 1.5%. In 2024, South Africa's growth rate was 0.6%. "Other economic indicators were mixed in March, sending conflicting signals about the strength of the unfolding cyclical economic recovery. The S&P Global South Africa Purchasing Managers' Index (PMI) remained below the 50.0 'no-change threshold' for the fourth consecutive month," it said. BUSINESS REPORT
Zawya
27-02-2025
- Business
- Zawya
Salaries in South Africa surpass expectations with strong January growth
South Africa's salary earners started 2025 on a strong financial footing, with take-home pay reflecting steady growth. According to BankservAfrica's Take-home Pay Index (BTPI)—which tracks the average nominal take-home pay of approximately 4 million salary earners—the average take-home salary surged to R18,098 in January 2025, marking a significant rise from R17,246 in December 2024 and R15,564 a year earlier. 'The upward trend in take-home pay signals positive developments in the earnings landscape,' says Shergeran Naidoo, BankservAfrica's head of Stakeholder Engagements. This growth suggests improved economic conditions, wage adjustments, or sectoral shifts benefiting employees across industries." The upward trend in average salaries started early in 2024, and despite some monthly volatility, nominal take-home pay continues to tick higher. 'This positive remuneration trend evident in the BankservAfrica sample reflects a generally improved business environment, notable moderation in inflation, higher confidence levels in the economy, and three interest rate cuts that have provided much-needed relief,' says Elize Kruger, independent economist. Company profitability also improved during 2024, as reflected in the above inflation increase in the gross operating surplus of companies. The improving environment was also echoed in the sizeable total return on the FTSE/JSE All Share Index in 2024 (+13.4%), reflecting the promising earnings potential of listed companies. In real terms, take-home pay also increased to R15,659 in January 2025, a notable 12.8% up on year-ago levels, and reached its highest level since February 2022, according to Naidoo. This was driven by the significant moderation in consumer inflation during 2025, from 5.3% in January to 3.0% in December, which has had a positive impact on the purchasing power of salary earners. Additionally, the headline CPI averaged 4.4% in 2024, the lowest annual rate since 2020. 'As such, the real take-home pay averaging at R14,292, up by 3.1% in 2024, represented the first real increase in take-home pay since 2020,' says Kruger. On the assumption that inflation will remain well-contained in 2025, with the average headline CPI forecasted to be at 4.2%, 2025 could be the second consecutive year of positive real take-home pay growth. The observed recovery in disposable income has been reflected in healthier retail sales, with real retail sales growth for 2024 at 2.5% higher than the previous year, compared to -1.2% in 2023. Passenger car sales have also started to recover towards the end of 2024, with full-year growth of 1.1% compared to the 4.3% contraction in 2023. The cumulative 75bps reduction in interest rates and Two-Pot Retirement System withdrawals would have supported consumer spending. Salaries expected to improve – provided current conditions hold Looking ahead to 2025, the economic outlook indicates that the salary gains seen in 2024 could continue to strengthen. On the economic front, real GDP growth is forecast to increase by 1.7% in 2025, somewhat higher than in 2024. The acceleration in growth will be driven by a combination of improved household consumption expenditures, higher fixed investment spending, and further advances in structural reforms. An ongoing focus on improving South Africa's electricity generation capacity, addressing supply-chain blockages relating to freight rail and port operations, and upgrading water infrastructure, among others, are much-needed actions to propel the economy forward. 'The anticipated improvement in the business environment is expected to enable companies to offer more substantial salary increases in 2025, which in combination with a moderate inflation environment, could mean a second consecutive year of a real increase in take-home pay,' says Kruger. However, if the 2025 National Budget had been tabled with the 2% VAT increase, it would have derailed the positive inflation outlook somewhat, eroding the fragile recovery in the purchasing power of salary earners. 'While we await the revised budget on 12 March 2025, the postponement has introduced uncertainty, raising concerns about its potential impact on the economy's recovery prospects,' ends Kruger.
